The Detroit-based Big Three automakers – a foundation of American industrial might for a century – are going to be altered under any US government bailout. The question now may be only how profound those changes will be.

It’s possible that the Bush administration still may offer a simple bridge loan to the desperate industry, postponing tough decisions until President-elect Obama takes office. But Bush officials ultimately could also decide on a rescue plan that puts the most troubled firms, General Motors and Chrysler, through something resembling a managed bankruptcy, according to administration officials.

“There’s an orderly way to do bankruptcies that provides for more of a soft landing. I think that’s what we would be talking about,” said White House press secretary Dana Perino on Thursday.

Any federal offer of aid would come attached to more Washington oversight, via an “auto czar” or some other mechanism. That means Woodward Avenue, metro Detroit’s main drag, in essence would then run through D.C.

Under the more involved plans under discussion, unions would have to make concessions, as would other stakeholders in the industry, such as bondholders. Plans would call for the number of dealerships to be trimmed.

Some suppliers are likely to go bankrupt, whether or not the United States provides the industry with aid.

As recent announcements of lengthy holiday plant shutdowns demonstrate, the industry has reached a turning point in its history. Ford has said it can shoulder along without US help. But GM and Chrysler can see a river from where they’re standing, metaphorically speaking – the Rubicon.

“The auto industry is on very delicate financial footing. The situation is quite dire,” says Dennis Virag, president of the Automotive Consulting Group, based in Ann Arbor, Mich.

The Big Three have long closed their US factories around the holidays. Typically, the seasonal shutdown lasts about two weeks.

But on Wednesday, Chrysler announced it was closing all its North American manufacturing plants for at least a month. The plants employ some 46,000 union workers. Ford announced that it would extend the holiday shutdown at 10 of its plants to three weeks, instead of the previously planned two.

The closures come at a time when sales of vehicles in the US are as low as at any time in the past quarter-century. Over the past three months, car and truck sales have declined at a “stunning” 43.7 annual rate, according to a Wachovia Economics Group analysis.

“The one bit of good news in these data is that the rate of decline in motor vehicle sales has clearly slowed, with the sales for motor vehicles now coming below replacement demand,” concluded the Dec. 15 analysis.

Meanwhile, in Washington, an aid plan for the industry has been longer in coming than many expected. After the Senate voted down a rescue plan last week, the White House announced that it would offer some kind of aid on its own authority.

At press time, the administration had yet to release a detailed bailout strategy.

President Bush said at an appearance Thursday at the American Enterprise Institute that he had not yet decided what to do. Under normal circumstances, bankruptcy court would be the best way for auto firms to work through credit and debt restructuring. “These aren’t normal circumstances. That’s the problem,” he said.

Mr. Bush said he was worried about the effect of an auto-industry collapse on financial markets. At the same time, he said, he was worried about throwing good government money into a bad situation.

On one matter, Bush was definite: He did not want to punt the problem to Mr. Obama. “I believe that good policy is not to dump him a major catastrophe on his first day in office,” Bush said.

The policy of not wanting to use taxpayer dollars to prop up enterprises that are going to collapse anyway is a good one, according to one economic expert. And that’s a likely reason that an aid decision has been delayed. Government officials are poring over GM and Chrysler financial records and talking to firm stakeholders in an attempt to understand the firms’ way forward.

“There is no reason to give credit if the firms have business plans you think are likely to fail. It’s better to say ‘no’ at the outset,” says Gary Burtless, a senior fellow in economic studies at the Brookings Institution.

But simply allowing GM and Chrysler to go bankrupt on their own risks their liquidation, according to Mr. Burtless. Foreign auto firms might buy some of GM and Chrysler’s assets, but not all.

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US and European shares rallied Tuesday a day after punishing losses as investors looked past the gloom that provoked Monday’s rout, but analysts say the rally remains fragile.

Wall Street was lifted by hopes for an auto sector rescue by the US government and General Electric’s better-than-expected business update while European bourses rose on a pledge by European Union ministers to implement economic stimulus measures.

The Dow Jones Industrial Average rallied 270.00 points (3.31 percent) to close at 8,419.09, coming off a horrific 679-point loss on Monday.

The Nasdaq composite climbed 3.70 percent to 1,449.80 and the Standard & Poor’s 500 added 3.99 percent to 848.81, after both fell more than eight percent on Monday.

Market action came as the Big Three Detroit automakers were pressing Congress for emergency loans of some 25 billion US dollars to avert a potentially catastrophic collapse. General Motors, Ford and Chrysler presented their business plans outlining how they would restore profitability.

Colleen King at Schaeffer’s Investment Research said driving the market gains was “auto bailout speculation,” or anticipation that the Detroit firms will prevail in their request for government aid.

Gregory Drahuschak at Janney Montgomery Scott said GE was another big factor in the rally, noting that the US conglomerate reassured markets with its quarterly update.

Drahuschak said the nearly nine percent loss in the S&P 500 was due to “fear that GE’s webcast today would include some significantly negative news.”

But the markets snapped back, he said after the updated was “not as bad as feared.”

GE said its fourth-quarter profit would be at the lower end of its forecast as it embarks on restructuring and other actions to cope with financial turmoil.

But despite the difficult economic environment, the company expects to earn more than 18 billion US dollars in 2008, before restructuring and other charges, GE vice chairman Keith Sherin said.

John Wilson, equity strategist at Morgan Keegan, said the stock market may be able to sustain a rally even with the economy mired in recession.

“The market will begin to look through the trough well before we or the economists see it, so the fact that we are in a recession doesn’t preclude the stock market forming a major low in here,” he said in a note to clients.

He said one model “shows the S&P 500 over 70 percent undervalued (compared) to the 10-Year Treasury note.”

European investors drew encouragement from news that finance ministers from all 27 European Union endorsed plans for a stimulus plan totaling 200 billion euros, equivalent to 1.5 percent of EU gross domestic product.

“Despite a lack of consensus amongst national governments, the European Commission’s bailout package is giving hope to equity investors,” said Kim Forkes at Economy.com.

In London, the FTSE 100 index of leading shares closed 1.41 percent higher at 4,122.86. In Paris, the CAC 40 was up 2.35 percent at 3,152.90 and in Frankfurt the DAX jumped 3.12 percent to 4,531.79.

Forkes said European markets “were also buoyed by hopes of deep monetary policy rate cuts by the European Central Bank and the Bank of England.” Both were due to meet on Thursday.

In other markets, Asian bourses fell in the wake of Wall Street’s plunge Monday. But Brazil’s Bovespa rose 0.75 percent and the Mexican Bolsa index added 1.38 percent. Canada’s S&P/TSX fell 0.93 percent.

Volatile trading conditions showed no signs of abating.

“As we are in the midst of the largest market fall since the Great Depression, it’s an understatement that the outlook is extremely uncertain,” said European equity strategists at JP Morgan.

Investors are looking to central banks this week for the latest round of action to combat the worst financial crisis since the 1930s which is threatening to plunge the global economy into recession.

Official data showed Tuesday that eurozone producer prices fell at their sharpest rate on record in October following another big drop in energy costs, raising the odds of a large interest rate cut for the eurozone on Thursday.

Analysts say the cut in the benchmark rate by the European Central Bank could be between 0.50 and 0.75 percentage points from its current 3.25 percent.

Traders were anticipating a big cut to British borrowing costs when the Bank of England policymakers meet on Thursday.

A steep interest rate cut by Australia’s central bank on Tuesday and fresh steps by Japan to tackle the credit crunch failed to soothe investor fears across Asia.

Tokyo closed down 6.35 percent on Tuesday, Hong Kong slid 5.0 percent, Seoul shed 3.3 percent and Sydney dropped 4.2.

Australia’s central bank slashed interest rates by 100 basis points — a larger cut than expected that dropped the official cash rate to 4.25 percent, its lowest level in more than six years.

But the rate cut “didn’t do anything to boost the market,” said CommSec market analyst Juliette Saly.

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Costuming became popular for Halloween parties in America in the early 1900s, as often for adults as for children. The first mass-produced Halloween costumes appeared in stores in the 1930s when trick-or-treating was becoming popular in the United States.

What sets halloween costumes apart from costumes for other celebrations or days of dressing up is that they are often designed to imitate supernatural and scary beings. Costumes are traditionally those of monsters such as vampires, ghosts, skeletons, witches, and devils. There are also costumes of pop culture figures like presidents, or film, television, and cartoon characters.

Another popular trend is for women (and in some cases, men) to use Halloween as an excuse to wear particularly revealing costumes, showing off more skin than would be socially acceptable otherwise. Halloween costume parties generally fall on, or around, 31 October, often falling on the Friday or Saturday prior to Halloween.

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