Meanwhile, the news is just in that General Motors has officially lost its position as the world's largest car company, in terms of sales, after 77 years. GM sold 8.4 million cars worldwide last year, compared with just under 9 million for Toyota.

Believe it or not, this might actually be good news. Free of the burden of history to retain the "world's largest" title (which GM actually lost years ago in terms of market cap and everything except vehicles sold), General Motors executives might find it psychologically easier to shrink the company by shedding four or five ailing brands. The keepers are Cadillac, Chevrolet, and GMC. Saab, Hummer, Pontiac, Saturn, and Buick should go, so GM can focus its resources instead of spreading them too thinly.

As things stand now, General Motors and Chrysler are the only two companies that have accepted federal aid. (Ford is leaving the door open, but says it hopes to avoid going on the dole.) The two companies must present preliminary survival plans to the government by February 17, and deliver their full-fledged plans to the feds by March 31. There is very little doubt that both companies will ask for yet more taxpayer dollars. Which brings us back to the matter of an exit strategy.

The only way for the government to get out of Detroit cleanly will be with a restructuring process for the companies that accept government aid. The restructuring will be modeled after Chapter 11 bankruptcy proceedings, though perhaps called something else. The purpose isn't to punish the Detroit companies, but to help them. Unless General Motors and Chrysler can reduce their debt loads, eliminate unneeded brands, and rid themselves of the cumbersome work rules in their union contracts, they'll never get off the dole.

General Motors seems to be recognizing this. Late last year the company steadfastly maintained that bankruptcy "isn't an option." But recently, CEO Rick Wagoner said the company has to be prepared for "any option." GM needs to make that implied bankruptcy threat explicit.

Why, after all, will the bondholders, dealers, and United Auto Workers union give ground in negotiations when they believe the government will keep shoveling money into the companies indefinitely? We saw the futility of voluntary negotiations late last year when GMAC bondholders refused to give enough ground for GMAC to meet the Federal Reserve Board's requirements for becoming a bank holding company (and thus getting more federal aid). So the Fed simply waived its requirements for GMAC to qualify, and started shoveling in dollars. That isn't an exit strategy.

During the first Chrysler bailout 28 years ago, strict and binding conditions were required for the company to get government aid. Chrysler was given six months after the passage of the Loan Guarantee Act to get specified concessions from the UAW, lenders, dealers, and others before it actually could start drawing down the money. The painstaking negotiations that followed almost failed. But in the end, all the "constituencies" knew that if they didn't give ground, Chrysler would collapse and they would wind up with nothing.

Unfortunately, there's no time for six months of negotiations now because GM and Chrysler already are out of money, and will soon be asking for more. So any federal "car czar" must get exactly the same powers as a Chapter 11 bankruptcy trustee to impose settlement terms.

That will make an exit strategy possible.