The Big Three automakers could be headed for Chapter 11, a UBS Warburg analyst argued in a research note Thursday.

According to Saul Rubin, the analyst, Chapter 11 is not around the corner, but not out of the question for Ford ( F), General Motors ( GM) and DaimlerChrysler ( DCX), because of their highly leveraged positions and weakening trends.

"Likely, industry trends will result in a major casualty at some point in the longer distance," said Rubin. "The lack of a short-term catalyst will provide ample time for the Big Three to destroy further shareholder value." Near term, the analyst expects that "profligate spending and aggressive pricing" will lead to "further financial destruction."

The three automakers weren't immediately available for comment.

Ultimately, Rubin said, either Ford or GM will go into Chapter 11, or Chrysler will be ejected from DaimlerChrysler. The analyst thinks Ford and Chrysler are the companies most likely to lose share in the coming years, because they suffer from competitive disadvantages in the U.S. and from manufacturing and material costs.

"A mere continuation of current trends and strategies combined with moderate performance in the equity markets would, we believe, push Ford to the brink," Rubin said. He added that weakness in Mercedes and a change in management at DaimlerChrysler could be sufficient to expel Chrysler from the company.

The analyst credited GM with boosting its competitive position in recent years, but said it has the "wobbliest" financial structure and carries obligations, which, given certain conditions, could "blow the company apart."

On the macro level, Rubin noted three negative trends: worsening demand, falling share and fragmentation.

Not since 1913 has the industry been so fragmented, Rubin argued, with more and more players in categories once dominated by the Big Three. Meanwhile, Rubin forecasts that 1.6 million units of new capacity will come on stream in the next five years, and he doesn't see this matched by incremental demand or the removal of capacity.

Rubin gives Ford and DaimlerChrysler a reduce rating, and GM a neutral. UBS Warburg has done investment banking for all three companies in the past 12 months. Ford, at midday Thursday, was up 3 cents, or 0.3%, at $10.28; DaimlerChrysler was up 42 cents, or 1.4%, at $31.39; and GM was ahead 28 cents, or 0.8%, at $34.98.

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