WASHINGTON (AP) – Desperate for a $25 billion government rescue package, U.S. automakers and their allies in Washington are warning that U.S. national security would be harmed if Detroit goes under and takes its vast chain of parts suppliers along with it.

Truth is, that argument is a tough sell.

General Motors, Ford and Chrysler long ago exited the defense business. Many of their suppliers make the axles, transmissions and engines used on military vehicles, but defense experts see little risk to the armed forces beyond paying higher prices.

“It’s a stretch, quite frankly,” said retired Army Lt. Gen. John Caldwell, chairman of the National Defense Industrial Association’s combat vehicles division. “I think they’re grasping at straws.”

The chief executive for Chrysler LLC, Robert Nardelli, told the Senate on Tuesday that crippling the auto industry “would undermine our nation’s ability to respond to military challenges and would threaten our national security.” Auto executives were expected also to testify in the House on Wednesday.

Sen. Bob Casey, D-Pa., also warned about threats to the U.S. from a collapse by automakers: “Our national security could be at risk in some way or another because of the parts suppliers that supply both automobiles and weapons in defense material,” he said.

In a video posted earlier this week on the Web site www.gmfactsandfiction.com, General Motors said a devastated domestic auto industry would not just be an economic catastrophe “but a serious threat to national security.” In the event of a major international conflict, the U.S. would have to rely on foreign companies for manufacturing the military equipment it needs, the company said.

On Sunday, retired Army Gen. Wesley Clark pointed to the rapid production of mine-resistant, ambush protected vehicles as evidence of what a healthy domestic automotive sector can do on short notice. Thousands of the so-called “MRAPs” that protect U.S. troops from roadside bombs have been built in the last few years and sent to Iraq, Clark wrote in The New York Times.

Sen. Carl Levin, D-Mich., the influential chairman of the Senate Armed Services Committee, said the defense market alone isn’t large enough to sustain most auto parts suppliers, making a strong commercial industry key to their survival.

TRW Automotive Holdings Corp., which also supplies parts for heavy-duty trucks used by the U.S. military, warned investors Oct. 30 in U.S. securities filings that the economic meltdown could further damage the auto industry, which could hurt its own sales or profit margins.

Cummins Engine, which makes diesel engines for the military, said it sells roughly 8 percent of its engines to Chrysler for use in Dodge Ram trucks. Cummins told investors in February that a decline in Chrysler truck production could hurt its sales.

And Detroit’s research and development of batteries, alternative energy vehicles and lightweight materials all hold promise for the military. “These technologies are being developed primarily for the commercial industry, but can also help our troops in battle,” Levin said Tuesday.

But the Big Three automakers had no role in making the hulking MRAPs, and the most innovative automotive technologies are coming from Toyota and Honda, not Detroit, said Dakota Wood, a retired Marine Corps officer and a military analyst at the Center for Strategic and Budgetary Assessments in Washington.

“Is it in our best interest to have a robust commercial automotive industry? Absolutely,” Wood said. “Would we prefer to have domestic innovation and production advantages? Of course. But I think the argument of propping up the Big Three as a national security imperative is marginal at best.”

When the Pentagon needed MRAPs in a hurry, it turned to traditional defense companies like Force Protection in South Carolina, BAE Systems of Sealy, Texas, and General Dynamics Land Systems in Canada. Similarly, the Army and Marine Corps are buying a vehicle to replace the venerable Humvee and awarded contracts to manufacturers with heavy experience building military trucks.

“The defense sector has become so specialized that much of it is completely separate from the commercial sector,” Wood said.

Detroit’s Big Three were uninterested in a partnership to build the mine-resistant vehicles, which can weigh 20 tons or more and have a unique V-shaped hull to deflect blasts, said Damon Walsh, Force Protection’s executive vice president.

“It just wasn’t sufficient volume for them,” Walsh said.

Walsh said it’s too early to assess the impact on the suppliers it relies on for engines and other parts.

Wood, the military analyst, said not all of these companies are totally dependent on the U.S. market. Allison Transmission and Caterpillar, for example, are global enterprises.

Democratic congressional leaders want to tap the $700 billion Wall Street rescue package for new loans to U.S. automakers and suppliers. But the White House and Republican lawmakers object. Instead, Republicans propose diverting $25 billion approved by Congress in September – intended to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles – to cover the firms’ immediate financial problems.

Auto executives and their supporters in Congress said another $25 billion in emergency loans is needed to prevent one or more of their companies from going under before year’s end. That would mean $50 billion in total federal aid.

Treasury Secretary Henry Paulson told Congress on Tuesday the administration remains opposed to using the financial bailout fund for the auto industry. At the same time, Paulson testified, “It would be not a good thing” if one of the auto companies failed.


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