Nov. 14 (Bloomberg) -- Here we go again. If the U.S. Treasury doesn't throw open its shrinking bounty this very minute to yet another company, millions of Americans will lose jobs, small and large businesses will crash, entire communities will vanish and the nation's ailing economy will go on life support.

So says General Motors Corp., which has joined the growing soup line queuing up at Treasury's door. Its chief executive officer, Rick Wagoner, pleads with Washington to allow GM to sidestep the legal process specifically created to handle situations like this, Chapter 11 of the bankruptcy code.

If Congress will only agree, Wagoner says he would accept strings on whatever tax dollars head GM's way. He would embrace limits on executive compensation and gladly plunge into cutting gas consumption for GM products.

But there is one corrective notion he told Automotive News this week that he would consider ``counterproductive.'' That would be a change of leadership at the top.

Wagoner understands members of Congress ``want to make sure it's a good investment'' for the taxpayer and that the ``business will actually be better in the future,'' he told Automotive News.

Amen to that.

``One of the key aspects of that is making sure you have the strongest possible leadership team in the company,'' he said.

Precisely.

But he sees that as a reason to stay. In reality, it's a reason for those who led GM to the brink to head for the door.

Credit Crunch

Wagoner blames GM's crisis on the credit crunch and economic downtown, neither of which GM executives created. He says he and his cohorts had been rescuing GM from poor prior decisions just as gas prices starting spiking and profits began dropping, sending GM sales spiraling.

More bad luck.

That version ignores the current leadership's contribution to GM's losing streak. Unless these executives acknowledge their own misjudgments, why would anyone think it a good investment to give them more money -- our money?

More than any other carmaker, GM thought it could drive comfortably into the future with sport-utility vehicles, the bigger the better. So what if city miles driven per gallon by Hummers and Cadillac Escalades barely crack double digits?

If you think of green only as the color of money, it's hard to fault GM for pouring resources into profit-making SUVs and trucks while giving short shrift to money-losing passenger cars.

Ceding the Field

But why did GM cede its lead in passenger cars to Japanese makers in the first place? This is the same company that 25 years ago invented the first production-ready catalytic converter to reduce emissions.

Why didn't U.S. automakers realize they would better serve themselves and their customers by building less thirsty autos that last past the car payments? Instead, they lobbied to keep mileage standards as high as possible and found enablers among Democrats and Republicans alike.

Not even after Hurricane Katrina in 2005 made painfully clear the inverse relationship between gasoline prices and SUV demand did GM turn its back on its guzzlers.

That didn't happen until a mere six months ago when GM executives shut down its SUV-development program.

``Reality had set in,'' Robert Lutz, GM's head of product development, told the New York Times.

With gasoline at $4 a gallon and SUV, van and pickup sales down 37 percent, Wagoner announced in June the closing of four plants and a shift toward more cars.

Toyota in Front

The reality is that the Toyota Prius, which Lutz called little more than a public relations stunt, has been zipping around American highways since 2001, with Toyota barely able to keep up with demand.

So now, GM is turning more of its fleet into hybrids. And, with its Chevrolet Volt, the company is racing with Toyota to get the world's first plug-in, extended range electric vehicle on the road.

Does GM deserve to use tax money to last that long? Deserving or not, Wagoner says declaring bankruptcy would be devastating.

But it would force reorganization and a change of leadership. It would give the company a chance to emerge as a stronger, more viable business.

``It may be the right way to resolve a very bad situation,'' says Jay Westbrook, bankruptcy expert who teaches law at the University of Texas.

`Very Entrenched'

``Management and unions are very entrenched,'' he says, and without intervention from the outside, GM probably won't succeed in the long run.

True, Congress could force reorganization. But who is more likely to push the United Auto Workers into concessions: a bankruptcy trustee or a Democratic-led Congress? Who would better fashion long-term but painful solutions in the politically potent upper Midwest?

Fear of catastrophic economic collapse rushed Congress into granting $700 billion to Treasury to buy troubled assets from banks a mere six weeks ago. Treasury Secretary Henry Paulson got what he wanted but now says that isn't what was needed, after all.

Companies the government has already agreed to bail out need more, more, more to stay afloat. American International Group Inc. is running through the Treasury like Palins set loose with a Republican Party credit card.

There is a seat-of-the-pants feel to the whole rescue operation. Sure, desperate times call for quick action, which is why I thought the bailout package necessary.

And yet, credit is still largely locked, unemployment and foreclosures are surging and the stock markets look like the results of Bill Clinton's polygraph test.

And the line at the Treasury keeps growing, as does the one at the soup kitchen down the street.

(Ann Woolner is a Bloomberg news columnist. The opinions expressed are her own.)

To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net.

Last Updated: November 14, 2008 00:03 EST