One reason for optimism is history, which is filled with spectacular automotive comebacks. Italy’s Fiat posted record profits in 2007 and wiped out its debt after nearly going under a few years ago. Nissan did the same thing in 2001. The mother of all turnarounds was led by Lee Iacocca at Chrysler in the early 1980s. “Crisis is opportunity,” Ford C.E.O. Alan Mulally says, adding that tough times allow for measures that would otherwise be unthinkable.

For example, the new contracts all three U.S. manufacturers signed last fall with the United Auto Workers union allow new hourly employees to be hired for about half the wages and far fewer benefits than those paid to assembly-line veterans, a deal that would have been soundly rejected by the mighty U.A.W. of the past. (When the boat is taking on water, you stop bickering and start bailing.) Detroit also cut billions in retiree medical bills by funding a new, union-run health-care trust for retirees at some 60 cents on the dollar. So instead of selling cars at fire-sale prices just to pay retiree health costs, the Detroit companies can start making rational decisions about production and sales. And they can start making profits on small and midsize cars as well.

Another positive: Both G.M. and Ford have thriving international operations. Last year, Ford doubled its income in both South America and Europe and turned profitable in Asia. G.M.’s sales are surging in Russia and China. Those two companies also have substantial cash reserves. At the end of 2007, G.M. had more than $27 billion, and Ford had nearly $35 billion. Those stockpiles will shrink this year, but they’re still big enough to buy the companies time to execute their recovery plans and pray for the U.S. economy to turn around. (Chrysler has a smaller international operation and just $9 billion in cash.)

All three companies have, to varying degrees, some of the same basic problems: outdated designs, too many dealers, too much debt, and a late start on hybrids and other alternative-fuel models. But the road to survival, and the odds, are different for each firm. For the past five months, I’ve interviewed dozens of analysts, industry watchers, and executives at the Detroit Three, as well as some of their foreign competitors. Fixing any of the three automakers will be difficult and painful, but it is possible. Here’s how.

FORD: Needs Brand Rehab

The good news is that Ford has lots of cash, and its international operations are profitable and growing (60 percent of its car and truck sales now occur overseas). The bad news is that it hasn’t designed many exciting new cars for the U.S. market lately. That’s a significant issue for, you know, a car company. Because of its lackluster lineup, Ford has lost more market share in this decade—eight percentage points, or one-third of its total—than the other members of the Detroit Three, leaving it with just 16 percent of U.S. car sales.

The decline is partly due to extremely high management turnover in the past 10 years. Ford has had three C.E.O.’s since 2000. Of the 50 top executives listed in its 2002 annual report, just 11 remain today. The result has been zigzag decisions, like dropping certain model names in 2006 and replacing them with alphabetic codes like MKZ and MKX. Ford compounded the confusion by declaring that MKZ should be pronounced Mark Z, only to revert, Prince-like, to M-K-Z in what the New York Times termed “the first recall of car pronunciation.” “I wasn’t here then,” says C.E.O. Mulally. “It’s beyond me.”

Mulally, a former senior Boeing executive who arrived 22 months ago with no industry experience, did manage to save the Taurus name, which Ford management also wanted to scrap. And he nixed Ford’s plan to focus almost exclusively on trucks for the U.S. market, an approach that brought the company to the brink of disaster after gas prices soared three years ago. One thing he hasn’t changed is Ford’s penchant for management jargon. Company chiefs now hold weekly B.P.R.’s (or business-planning reviews), in which problems can be referred to an S.A.R. (special-attention review), where attendees discuss things like a car’s H.M.I. (human-machine interface, basically the vehicle’s knobs and buttons). All of this will be forgivable and not just silly if it results in cars that customers actually want to buy.