It's just like a rerun of the argy-bargy over Treasury secretary Hank Paulson's bank bail-out as US Senate Republicans rejected the big three Detroit carmakers' plea for a $14bn bridging loan. The deal foundered over the unwillingness of the United Auto Workers to take an instant pay cut, bringing them into line with what US workers for Japanese car companies are paid, which is no surprise at all. General Motors, still the world's biggest car producer by volume, and Chrysler had said that they might not be able to survive into January without the loan (Ford says it's still got some money left). Some politicians saw this as a bluff, an attempt to bounce the legislators. Well now we'll find out. The stark alternative is administration or a kind of fast-track bankruptcy, which would put the auto workers in their place as their current deals with the companies would no longer apply. Or the outgoing Bush administration could use some of the remaining $700bn 'Troubled Asset Relief Program' fund (intended for banks and mortgage companies) to keep the carmakers going. The trouble is that we all need banks, however hopeless they are. We don't actually need Dodges and Jeeps because someone else would fill the gap in the market if they weren't available. So it's not necessarily the case that millions of jobs in the wider US car industry would be lost permanently even if General Motors and Chrysler went down. This is exactly what happened to the UK car industry when British Leyland finally expired in the 1980s. Rover limped on for a bit but essentially the British-owned car industry, once the biggest in Europe, disappeared. But other companies like Nissan and Honda moved in. Incoming president Barack Obama may well have other ideas of course but administration, the tough option, might actually be the best one.