Ford, General Motors and Chrysler all are bracing for shocks

Is this Ford's last chance? Some observers think so. In fact, a number of auto industry watchers believe that each of the Big Three American automakers has only one restructuring left. After that, one or more of them will be gone.

Ford Motor Co. shocked workers and Wall Street alike with news last week that its losses for 2006 will exceed $12.7 billion. A large part of that is due to buyouts and other one-time expenses.

Another shock last week came from General Motors, which announced it would delay its 2006 results because of accounting irregularities. This isn't good for GM's reputation. It has had this problem before.

Wall Street analysts expect Chrysler to report 2006 losses as well. That company's massive -- and some expect drastic -- restructuring will happen next month.

The American auto industry is running out of options. Dealers, once their captives, are no longer beholden to a single Detroit company and are now selling Asian-produced cars too.

Parts suppliers can't be squeezed any more. Detroit's recent cost cutting has come largely at their expense. Now that some of the suppliers have been forced into bankruptcy, Detroit has to look elsewhere to save money.

Finally, American auto makers must produce cars that customers want to buy. If they can't do that, the game is over.

Optimistic industry insiders and outside observers say Ford, GM and Chrysler can do it -- with two years' grace. The pessimists say -- well, let's hope they're wrong.

Restructuring will be hard and painful. But signs are that industry leaders, despite their record, get it this time. Ford's CEO Alan Mulally was asked what his priorities for saving the company are. He said, "At the top of the list, I would put dealing with reality."