Even though President-elect Barack Obama, during his campaign, pledged to help the heavily distressed American auto industry, many US auto makers may find themselves in deeper distress before he finally takes office.

Former Michigan government and president and CEO of the National Association of Manufacturers John Engler was quoted by the media as saying that Obama would take office by 20 January, ''and that's a long time in the life of these companies at the moment."

General Motors Corp has said that it is planning to come up with new cost cuts when it reports its quarterly earnings before the weekend on Friday. Quarterly results of both GM and Ford are expected to be gloomy. Both automakers extended their congratulations to Obama on his election, while linking the overall US economic weakness to Detroit's deteriorating financial prospects. Most US automakers are hoping against all odds that the Bush administration, which is reluctant to sign off a bailout package for the car companies, would in fact act before handing over power to Obama.

With General Motors seeking to merge with Chrysler, that is the biggest sign that for the American auto industry, survival is the only issue. And the key to survival seems to be staying solvent in the face of declining sales, and asking the US government for a bailout package. The question that is resonating in the US is whether the now-fabled Big Three of the US auto industry are actually worth saving.

In September 2008, Congress had approved $25 billion in loan guarantees for American automakers (See: US House of Representatives approves $25-billion loan package for American auto industry), with rules for their disbursal still in the making.

Auto companies and their lobbyists are now planning to scale up the urgency of this funding needed by the industry, planning to bank on underscoring the belief that its immediate problems are not of its own making, but are instead on account of the global credit crunch and that the industry's survival hinges on federal aid.

Chrysler seems to be the worst off amongst the Big Three, with observers reported as saying that the company would have limited options such as a merger, a spin off, or bankruptcy if aid is slow to arrive.

Engler said a Chrysler failure could cost up to 1 million jobs throughout the economy. NAM's Engler says that the not just the Big Three, but also suppliers and indeed the entire chain of the industry would be affected.

Media reports said that some in the industry believe that even though he is yet to occupy his new office, President elect Obama could exert his influence over the the Bush administration and use his leverage on the Democratic-led Congress.

For now, the automakers are hoping that their lobbyists and officials in Congress would be able to push through the $25-billion direct loan package, with few, if any, strings attached to help them tide over the immediate future. Obama, during his campaign, had called upon the Bush administration to speed up dispensing those loans.

Meanwhile, analysts were quoted in the media as saying that GM could close more plants, though Ford would most likely undertake temporary factory shutdowns and overtime cuts at some of its plants. GM is already reported to be in talks with Chrysler's majority owner Cerberus Capital Management for a proposed acquisition, spurred on by Chrysler's approximately $11 billion cash reserves, and eyeing federal aid to make the deal happen soon.

However, since the deal hinges on federal aid, which is still not forthcoming, sources in the media reported that a deal would most likely not be announced anytime too soon.