Why Auto Bailout More Resisted Than Bank Rescue

Why is there more hesitancy to bail out the Big Three automakers as opposed to the banks?

It isn't about the cars. The Big Three -- Ford(F Quote), General Motors(GM Quote) and Chrysler -- make fuel-efficient autos, even if they mostly push gas-guzzling trucks and SUVs. They have hybrid cars, too.

It isn't just about foreign competitors. Toyota(TM Quote) and Honda(HMC Quote) are both seeing dramatic decreases in car sales.

GM sales were down 15% in September, but Toyota's were down 35%. Their stocks have also plummeted in value. GM's shares have dropped a staggering 87%, but the big three Japanese automakers have on average slid 51%.

Ultimately, it's that the U.S. automakers don't have more cash coming in than going out. Business rule No. 1 is make money.

According to Argus analyst Kevin Tynan, GM had a net cash shortfall of $13.8 billion at the end of 2005, then another shortfall of $12.3 billion for 2006 and then again $12.1 billion for 2007. Tynan expects it to burn through $1 billion of cash per month.

The automakers keep screaming, Why did the banks get bailouts and not why not us? Simply put: You don't make money. The chance of getting the loans paid back is slim.

Plus, the financial institutions haven't really gotten a bailout. So far, little money has gone to buying back toxic credit-default swaps. Most of the TARP money spent has been to buy up commercial paper and preferred stock, which the Federal Reserve can do for the automakers as well.