My gut reaction is that the government will screw this up. They're going to cow-tow far too much to the UAW and the environmentalists and leave the automakers in an even worse position than before. Looking at some of the proposals I see don't make me budge much from that opinion.
I do however see one plan coming from the Head of the Fake Office of the President-Elect of the United States that I don't agree with but at least has the virtue of actually being tried. Obama backs the "structured bankruptcy" approach. The Big 3 would get nudged around by centralized government planning similar to what the Japanese went through in the 80's (article says it went back as far as the 70's). I don't like any of the plans I've seen but at least this one can point to some sort of results and some sort of "exit strategy" that has actually been reached in the past.
If you're going to back a plan, I'd advise backing the Obama plan. Yes it's fascism but it has a track record or working and it would keep the government from directly owning parts of the Big 3 if I understand it correctly. The market will always correct itself but not necessarily in the amount of time you have to remain solvent. Let's keep "the government" from being that "you" if possible.
Personally, I'm seeing a lot of auto manufacturers who are struggling but making ends meet. I see no reason to single out 3 who have poorer business plans for special treatment. It would mean a lot of lost jobs but what's the point of keeping those jobs around to build automobiles nobody needs or wants?
One last point, be aware if this bailout happens the airline industry will be next in line hat-in-hand asking for some cash to get them through tough times.
EDIT: I almost missed the barbershop comment by Pelosi:
"We call this the barbershop," said House Speaker Nancy Pelosi, a California Democrat. "Everybody's getting a haircut here, in terms of the conditions of the bill," she said, noting the likely impact on labor, bondholders, shareholders, car dealers, suppliers and executives. "The management itself has to take a big haircut on all of this."
Nancy Pelosi: The Demon Barber of Capitol Hill is the first thing that comes to mind. Wealthy execs coming in for a haircut only to get dropped down a trapdoor to their deaths, stripped of any money they may have on them and then getting baked into meat pies. Pelosi's comparison is indeed a good one.