This is a rush transcript from "Your World With Neil Cavuto," December 1, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: FOX on top of the Big Three "begathon" — take two.

Last month, they had a big do-over stamped on a plan Congress said was not really a plan at all. So, they are back at it and the pursuit of the 25 million bucks they hope will make all their extra work worth it.

But now some on GM's board wondering if it is worth it, that maybe the auto giant should consider bankruptcy before bailout. GM's chairman hearing none of it. And neither is this guy, Wayne County, Michigan, Executive Robert Ficano. He just took out radio ads calling for Americans to support the industry.

So, Executive, those on the GM, who are not ruling out bankruptcy — why should you?

ROBERT FICANO, WAYNE COUNTY, MICHIGAN, EXECUTIVE: The automobile industry is so critical. It reaches millions of jobs...

CAVUTO: With all due respect, I have heard many argue the same point. The housing industry, the petrochemical industry, the retail industry. They have all been making the same pitch, we are two crucial to fail or go bankrupt... too crucial to fail or go bankrupt.

FICANO: No. 1, many jobs...

CAVUTO: Careful, other than the things I just mentioned.

FICANO: Well, first of all, because the auto industry is so critical, really. People think of it just as Michigan, but it really reaches millions of jobs across the United States.

CAVUTO: Well, you know, with all due respect, Executive, I have heard many industries argue much the same point, the housing industry, the petrochemical industry. I have had the retail industry. They have all been here, one man, one woman at a time, making the same pitch: We are too crucial to fail, too crucial go bankrupt.

What make autos sacrosanct?

FICANO: No. 1, there's a number of jobs across the country. But, No. 2, from a homeland security standpoint...

CAVUTO: No, careful. Careful. There are a number of jobs for all of those other businesses I just mentioned.

FICANO: Sure, there are.

But another unique aspect is the homeland security. You're talking about, during World War II, what was the arsenal of democracy. You're talking about companies that really, if we go into a ground war, there are the ones that are going to be making the tanks, the technology and everything else.

And, so, it is critically important that we continue to keep this industry alive, not only for the jobs and the further collapse, if they go down, but also from a homeland security standpoint.

CAVUTO: That sounds like a threat: You need us for the country's very survival. So, if you ignore us, you are ignoring your own survival.

That sounds kind of goofy, doesn't it?

FICANO: No. It is not a threat at all. It's just the reality of what it is.

(CROSSTALK)

CAVUTO: If all three auto giants would go down, if GM went down, Chrysler or Ford wouldn't survive? I mean, you're — you're working into that view that all the auto guys go belly up.

FICANO: Well, they are all interdependent. You talk about not only the automakers themselves, but you're talking about suppliers. There is a lot of cross-distribution of the suppliers that go back and forth in a number of states.

So, we are talking about not just the main ones, like Ford, General Motors, and Chrysler. There are — talking about also a number of suppliers as well that would go down.

CAVUTO: Well, you know, with all due respect — and you speak for your folks very well, and I commend you for that — but there are a lot of suppliers, there are a lot of plumbers, there are a lot of contractors who bespeak of the housing industry remaining vibrant.

It is not vibrant. So, they could make a similar pitch and say, as we go, so will our plumbers go, so all our electricians go, so all of our ancillary mortgage lenders and respected financial players go.

And you see what I am saying? It goes on and on and on. Now, when GM board members themselves, some of whom are saying bankruptcy should be an option, obviously, they are seeing past the bankruptcy — why can't you?

FICANO: Well, because, No. 1, if you think about it, who would buy a car from a bankrupt company? You're afraid about the warranty and everything else that is going to be carried in the future.

(CROSSTALK)

CAVUTO: No, no. Wait a minute. A Cadillac, I can get repaired anywhere. And people have flown bankrupt airlines with a lot more at stake, namely, their lives, when they do so.

So, I figure that, if you could fly a bankrupt airline, certainly, you can drive a car from a bankrupt company, right?

FICANO: Yes, but the problem is, is that, once you go into bankruptcy, all the suppliers and the others that would be creditors, they would go under as well. So, you're not just talking about Ford and General Motors.

CAVUTO: How do you know that? How do you know they will all go under as well?

FICANO: Because those of us that have been familiar with the auto industry have seen the restructuring that has been going on, especially for the past six or seven years.

There have been a number of jobs that have been cut. There have been a number of plants that have been reduced down. And, in fact, their structuring plans would have worked, except for the economic tsunami that we now face.

(CROSSTALK)

CAVUTO: But I have known a lot of businesses that have or could have gone under, in service and carriers, you know, big plane carriers, that have gone out of business, not once, not twice, but three times. Continental comes to mind.

And, again and again, the same argument was made, that, if that went belly up, or even went into bankruptcy, there would be hell to pay. There were restructurings. There were giant reshufflings in the way that business was conducted, but it came out leaner and meaner and with arguably a better or more cost-constructed product.

So, I am just saying, if these guys can do it, under Herculean odds, why not the auto industry?

FICANO: But don't forget, the airline industry did get a bailout, especially after 9/11. Congress allocated funds to get them through that crisis.

The automotive industry is going through the same thing. Plus, you are seeing a lot more scrutiny over the automotive industry than you did the financial institutions. You saw a bailout. And this is a loan.

The last time the automotive industry went through this was Chrysler in the 1980s. They not only paid the loan back thoroughly. The taxpayers made money on it.

CAVUTO: You're right. You're right. They did pay it back. Night and day. It was a relatively small number by today's standards. But you are quite right. It was paid right. And you're quite right to raise the financial example.

But a bad bailout does not necessarily mean you do other bad bailouts. And I think the fear...

(CROSSTALK)

FICANO: But this isn't a bailout. This is a loan that is going to be paid back.

CAVUTO: Well, you say it's a loan, but you know what? Someone tells me, Neil, try the salad and hopefully you will stick with the salad. There is no guarantee I'm going to try and stick with the salad.

And there is no guarantee or provisos to any of the packages I have heard from the auto industry that they must change their ways, that they must redress their union contracts, that they must change their legacy and pension and health contracts that are so expensive and so onerous, they are making their comparable American products 20 percent pricier than foreign ones.

If you don't address that, this bailout is a waste of money, right?

(CROSSTALK)

FICANO: This is part of the frustration.

Number one, there have been those issues address. There is a VEBA that the union and the automakers have negotiated to. They are taking the legacies cost off of the automotives, and they're setting something separates, completely going to be paid for once they get through the initial phase by the unions that are going to take care of the health care costs.

CAVUTO: So, why are their costs per vehicle 20 percent higher than their Japanese competitors, who aren't exactly doing swimmingly? But why are they — they — they doing better?

FICANO: No. 1, that is a myth. By the time the new contracts are all done in 2009, 2010....

CAVUTO: No, it's not a myth. That's what it is.

FICANO: ... they will be closer to their foreign competition than what it has ever been. It will not be 20 percent.

CAVUTO: All right. So, let them continue doing what they are doing in the private markets and without a bailout. They seem to making — if you're right — great headway on their own. Why should the taxpayers underwrite their efforts?

(CROSSTALK)

FICANO: Because just like what the airlines faced after 9/11, when — the sudden drop-off of passengers, because people wouldn't fly, with the economic tsunami that we face, all the models were set on probably them selling anywhere to 15 million to 16 million cars in this country. It's dropping to 12 million.

(CROSSTALK)

CAVUTO: But, Robert, there are plenty of others behind them who can make a similar argument, a similar pitch, a similar justification for money from the taxpayer. And they are not all going to get it. You're quite right to bemoan what has been a fiasco with these financial bailouts. But just following up on a fiasco with another fiasco does not justify the billions you spend for these fiascoes. It has got to stop somewhere, right?

FICANO: At this point, but the automotive industry, I believe, is critical for, like I said, the homeland security, and so many jobs that are tied up nationally all across...

CAVUTO: All right.

FICANO: Plus, we could do some other things, too, like the federal government, with some of their restrictions. Now they are looking at 50 different emissions standards from 50 different states.

CAVUTO: All right.

FICANO: Those are the type of things that add additional costs that other countries don't do to their auto industry.

CAVUTO: Well, maybe you have got something there. There are steps before you throw a lot of money at something.

But, Robert, thank you very much. We will see where this goes.

FICANO: Thank you.

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