WASHINGTON (Reuters) - The White House was studying on Saturday how best to rescue collapsing U.S. automakers, a day after picking up the pieces of a failed congressional bailout plan.

The Bush administration stepped into the auto fray on Friday, saying it would consider tapping a $700 billion fund set up to rescue Wall Street banks, after Congress failed to pass a bailout.

Auto company executives and analysts have said that General Motors Corp and Chrysler LLC need immediate help to avoid bankruptcy. Ford Motor Co is in slightly better financial shape but says it needs a major line of credit.

Bankruptcy of one of Detroit’s Big Three would be a body blow to the U.S. economy, which is already in recession, immediately hitting car parts makers and car dealers, as well as manufacturers.

Administration officials were gathering financial information from the automakers and assessing data such as their cash position, said Tony Fratto, a spokesman for President George W. Bush.

“We’ll be focused on trying to get the policy right while considering the best interests of the taxpayer and our economy, and we’ll take the time we have available to do that right,” Fratto said. “No decisions have been made.”

“We’ll take a look at that information, make some judgments and review our options,” he said.

Also on Saturday, top European car makers warned of a bleak 2009, in growing signs that the industry’s troubles went far beyond the life-or-death struggle in the United States.

A senior administration official, speaking on condition of anonymity, said no announcement was expected this weekend.

“We’re considering the full range of options with respect to the automakers, and we haven’t indicated what we will do, except to note that disorderly bankruptcy is something we should try to avoid,” the official said.

UNIONS, DEMOCRATS URGE AID

Democratic leaders and the main U.S. auto workers union appealed to Bush’s Republican administration -- now in its final weeks before turning over to Democratic President-elect Barack Obama -- to provide emergency funds after a Senate deal to save Detroit’s Big Three collapsed in acrimony late on Thursday.

The failure of the $14 billion bailout plan in Congress set markets reeling around the world. But signs that the White House and U.S. Treasury Department might mount a last-ditch effort to help the carmakers buoyed Wall Street on Friday.

Slideshow ( 22 images )

Before financial markets opened on Friday, the administration said it was considering tapping the Troubled Asset Relief Program (TARP) fund that was set up for the financial industry, reversing an earlier vow to oppose its use for an auto bailout.

Polls show Americans split on bailing out the U.S. automakers, a highly visible troubled sector in a country grappling with recession. The auto companies say one in 10 jobs in the United States are linked to their industry.

But the companies are widely criticized for fighting tougher fuel efficiency standards and poor model designs that have left them with big, inefficient vehicles that have lost popularity with consumers.

Slideshow ( 22 images )

In response to the company’s many struggles, GM said it would cut its first-quarter North American production by 60 percent.

Bush can ill afford the failure of one or more of the automakers as he prepares to leave office on January 20 with a presidential legacy already battered by the grim economy and the unpopular war in Iraq. Obama has said he was disappointed Congress did not approve the bailout.

Even if GM and Chrysler secure a last-ditch loan from the Bush administration, analysts see continued uncertainty ahead. Both will be under intense pressure to cut new cost-saving deals with creditors and the main labor union at a time when U.S. auto sales are at their lowest level adjusted for population since World War Two.

The United Auto Workers blamed the failure of the congressional bailout plan on Senate Republicans who want more wage concessions from the union. The UAW said it was now up to Treasury Secretary Henry Paulson to find a way to bail out U.S. automakers.

Thursday’s deal fell apart in Congress over proposed wage concessions by the UAW, including the date at which the autoworkers’ would accept pay parity with workers at foreign-owned U.S. auto plants. The Democrats hold a majority in the Senate but needed Republican support for the proposal to succeed.