The slimmed-down choice of pens in office supply cabinets: one each of black, red and blue. "It seems trivial, but when you have 100,000 employees or however many using supplies, they don't need to be that prolific. It adds up," spokeswoman Renee Rashid-Merem said. All the while, the once-mighty icon of American industry and its smaller competitor Chrysler edge closer to bankruptcy. Experts say their best shot is for President-elect Barack Obama to persuade the outgoing White House to free emergency loans from the $US700 billion ($1.04 trillion) federal bail-out, or to have the Federal Reserve make a loan. The $US14 billion car-industry bail-out bill died in the Senate late on Thursday after the United Auto Workers refused to accept Republican demands for swift wage cuts to bring UAW workers' pay in line with Japanese carmakers.

Senate Majority Leader Harry Reid said he hoped President George Bush would tap the Wall Street bail-out fund for emergency aid to the carmakers. Barring that, GM and Chrysler must continue to cut even the smallest expenditures and hold off payments to parts suppliers as they hoard cash and try to stay alive until Mr Obama takes office on January 20 and could take his own action. GM has hinted it might not make it through the end of the year before running out of cash. But GM board member Kent Kresa said this week that the company might make it into the first quarter, depending on car sales. "Certainly it has been stated that we need the money quite soon," Kresa said. "I can't specifically state before the end of the year, but certainly in the first quarter and early in the first quarter." GM wants a total of $US18 billion in government loans, including $US4 billion before this year runs out. And Chrysler, which is looking for $US7 billion in loans, may be even closer to the edge.

Its CEO, Robert Nardelli, said its cash would drop to $US2.5 billion, its minimum to survive, at the end of the year. It has cut 32,000 workers since private equity firm Cerberus Capital Management LP took over control in August of last year, including 25 per cent of its salaried workforce last month. The other of the Detroit Three, Ford, is not yet seeking government loans but wants a $US9 billion line of credit that it might need to tap if the depressed US car market doesn't recover. It says it can last through next year because it borrowed billions two years ago, when credit was freely available. The possibility remains that a deal can still be worked out in the Senate. Republican opponents, mainly from Southern states, probably don't want to bring the industry down, said David M Hart, associate professor of public policy at George Mason University in Virginia. "It's certainly not beyond the scope of possibility that they'll get this thing through," Hart said. "I think it's hard for Republicans to have this on them. There's a lot of pressure. They might work out a deal." Hundreds of thousands of jobs hang in the balance. The Detroit Three employ 239,000 workers in the US.

Counting other businesses that depend on the carmakers, economists estimate that 2.5 million jobs would be lost if all three companies went out of business. Susan Helper, a professor of economics at Case Western Reserve University in Cleveland who has studied the car industry, said GM and Chrysler's suppliers are the key to keeping the carmakers out of bankruptcy protection if they are forced to stretch and try to make it past Obama's inauguration. Suppliers, also cash-strapped, may start demanding payment in advance before shipping parts. If enough suppliers get nervous and start demanding cash, the companies could run short. "Then you have this game of musical chairs where everyone wants to make sure they're not the one left without a chair," she said. "That very process can bring the whole structure down. Right now the suppliers have been incredibly disciplined and not saying, 'Hey, pay us first'," she said. Already, a small number of GM suppliers have sought cash on delivery, but the company is working through the situation, CEO Rick Wagoner said last week.

"I would say there are a couple situations that we are managing, but on balance I'd say it's really held in there quite well," he told the AP. When Chrysler tried to stretch its money until it could get a government-guaranteed loan in 1980, it ran short of cash two weeks before the loan came through, said Steve Miller, an assistant treasurer at the time who now is executive chairman of Troy-based Delphi Corp, GM's former parts wing. "Any one supplier could have pulled the rug out from under us and prevented us from building cars," Miller said in an interview. But suppliers, he said, knew their futures were dependent on Chrysler's financial health. "We hung in there and the suppliers stayed with us," Miller recalled.

If, for whatever reason, the companies go into Chapter 11 protection, credit is so tight that they might not be able to get bankruptcy financing, Helper said. A bankruptcy judge, she said, could hold off creditors and possible liquidation until the companies arranged financing, most likely from the government. Loading "It seems pretty clear that the only potential provider of the [bankruptcy] financing is the Government," she said. "You'd have some period of figuring out the terms under which that ... financing is going to be offered."