General Motors

(GM) - Get Report

made its case for federal help during a dismal third-quarter earnings report Friday. But while the government's recent handouts to the financial sector have been substantial, such help for the nation's largest automaker involves a number of different considerations.

Though the automakers have appeared at risk of a bankruptcy for several months, the issue became more urgent Friday as

General Motors

reported that it burned through $6.9 billion. The company also drew down the remaining $3.5 billion from its secured revolving credit facility and made $1.2 billion in bankruptcy-related payments to parts supplier

Delphi

.

But the market does not appear nearly as worried about GM as it was about

Lehman Brothers

in the days before it filed for bankruptcy in September or

American International Group

(AIG) - Get Report

, which threatened to do the same just days later, before receiving an $85 billion bailout by the federal government. The

Dow Jones Industrial Average

close up 248 points on Friday, despite the poor financial reports from GM and rival

Ford

(F) - Get Report

.

That could be because investors sense a bailout for GM is in the works. More likely, though, it is because investors are used to the situation. The U.S. auto industry has been failing for much of the last forty years, as the world has passed it by.

If GM goes bankrupt, all cars around the world will not suddenly break down. But if

AIG

had failed, lending could have stopped altogether. The insurer was a counterparty to billions in credit default swaps, unregulated securities that insure against credit risk, and if AIG went under the unwinding of its tangled web of trades would have had dire consequence for financial markets, regulators feared.

Similar chaos ensued after Lehman Brothers -- less of a player in the CDS market than AIG -- filed for bankruptcy, which is one reason why many people, including our own

Jim Cramer

argue federal authorities should never have allowed that to happen.

Indeed, that was the argument put forward Friday by Rick Wagoner in an interview with

CNBC

Friday. Addressing pundits who say GM should be allowed to go into bankruptcy, Wagoner said. "I suspect these are the guys who said let Lehman Brothers go too and we see the impact that had."

A GM bankruptcy would of course cause massive job losses. "Manufacturing is the highest impact of all sectors of our economy, and auto is the highest of all manufacturing," said David Cole, Chairman of the Center for Automotive Research, on

National Public Radio

. He estimates that an auto assembly job has about four times as great an impact throughout the economy as does a Wall Street job.

Steve Ricchiuto chief economist at Mizuho Securities, says there should be aid given to the automakers, but that the industry should also get a break on regulations that he says restrict its ability to operate profitably in the U.S.

It is hard to believe, as this long era of deregulation appears to be coming to an end, that restrictive regulations have been a problem for any industry.

That said, the automakers' deals with their unions are straight out of a time capsule, so perhaps he has a point.

GM and Ford have already received government help in the form of access to a

Federal Reserve

facility that buys commercial paper. And House Speaker

Nancy Pelosi

(D., Calif.) on Thursday said that she was inclined to assist the struggling U.S auto industry, as long as the aid goes towards fostering competitiveness.

Either way, it is hard to envision a neat solution to the problem presenting itself anytime soon.