Detroit Three's survival report card

    GM, Ford, and Chrysler, the former Big 3 now dwindled to the Detroit 3, have gone in such different directions they don't seem to be on the same planet - let alone the same city. Will they make it? Fortune grades each on its performance and prospects.

    By Alex Taylor III and Allan Sloan

    Current Condition

    Chrysler: Chrysler stopped building new cars on May 4 so it could unload 337,000 unsold 2008 and 2009 models, a huge 114-day supply. Meanwhile, only government loans keep it afloat while it tries to work its way out of bankruptcy.

    Grade: D-/F

    Ford: The No. 2 automaker has refused government loans so far. Thanks to its cash reserves, bolstered by timely borrowing, it's in no immediate danger of running out of money. Nor are its dealers choking on inventory; Ford's stock of unsold cars amounts to only a 78-day supply. But it needs the auto market to improve in order to stem its losses.

    Grade: C.

    General Motors: "Size counts" used to be GM's mantra, but now it has to learn how to think small. Dumping Saturn, Saab, and Hummer, closing down Pontiac and continuing to slash white-collar jobs are causing internal turmoil. As customers worry about a seemingly imminent bankruptcy, GM is having trouble selling cars. It had 736,000 unsold vehicles on the ground at the end of April and more in transit, enough for 111 days.

    Grade: D

    Management

    Chrysler: CEO Bob Nardelli is going soon, and former Ford consultant Robert Kidder is stepping in as chairman. If Chrysler emerges from bankruptcy, Fiat will own at least 35% of the new company and Fiat CEO Sergio Marchionne will run it. He will have to do a lot with a little; Chrysler's white-collar ranks have been decimated by layoffs.

    Grade: D

    Ford: CEO Alan Mulally has pulled together a stable, close-knit team that has experienced little turnover. He could use a deeper bench should anybody depart.

    Grade: B

    General Motors: CEO Fritz Henderson took over from Rick Wagoner without skipping a beat and has accelerated GM's restructuring. Still to come: A thinning of GM's executive ranks and an overhaul of its board of directors.

    Grade: C

    Labor relations

    Chrysler: As part of a new contract, the UAW has agreed to accept $4.6 billion in cash plus a 55% stake in the proposed Chrysler-Fiat partnership to fund its health-care trust. The union has also agreed not to strike until 2015.

    Grade: B

    Ford: Ford has negotiated four new agreements with the UAW, promising to make its costs competitive with

    Toyota by 2010. Grade: A

    General Motors: After months of haggling, the company and the UAW may have finally agreed on how to fund the UAW's retirees' health care trust, which would remove a persistent source of friction.

    Grade: Incomplete

    Consumer lending

    Chrysler: Chrysler Financial is gradually being absorbed by GMAC. It is still providing loans to retail customers, but isn't doing any leasing or dealer financing.

    Grade: D

    Ford: Ford Motor still owns 100% of Ford Credit, which makes loans to customers and dealers. It is doing less leasing than it used to, but still more than Chrysler or GMAC.

    Grade: B

    General Motors: GMAC, once GM's crown jewel, has gotten a second government bailout, but still needs additional capital, which won't come cheap. The government will own at least 35% of GMAC, becoming its dominant shareholder. Meanwhile, GMAC isn't financing any leases.

    Grade: D

    Dealers

    Chrysler: The automaker told 789 of its 3,189 dealers it is terminating their franchises. Good for efficiency, bad for market share.

    Grade: D

    Ford: Ford is making "targeted" cuts in its dealer body, focusing on its top 130 markets. Ford hopes to match Toyota's per-dealer sales volume by 2013.

    Grade: B

    General Motors: GM is planning to cut 2,600 dealerships, or about 40% by 2010. Good for efficiency, bad for market share.

    Grade: D

    Debt

    Chrysler: The U.S. Treasury is talking to Chrysler's secured lenders about eliminating more than $5 billion of Chrysler's $6.8 billion in first-lien debt so that it can get out of bankruptcy.

    Grade: Incomplete

    Ford: Ford raised $1.6 billion to help fund its health-care trust by issuing 345 million shares of new stock in May. It retired another $10.1 billion in April, leaving $25.8 billion - still too much.

    Grade: C

    General Motors: Getting credit holders to agree on how much of a haircut to take has been a nightmare. Pretty soon, the bonds will be worth so little there won't be anything to fight over.

    Grade: Incomplete

    Government stake

    Chrysler: If Chrysler exits bankruptcy, the U.S. Treasury will maintain a 10% stake in the new company, presumably too little to seriously influence its operations.

    Grade: B

    Ford: Assuming it can keep from tapping the federal till, it won't have any government ownership at all.

    Grade: A

    General Motors: With all the money the government has invested, it will own 55% of the company, and GM is already worried that Uncle Sam's interests "may differ from those of our other shareholders." The UAW is already complaining about a GM plan to increase imports from Korea, China, and Mexico and close more U.S. plants; whose side will the government take?

    Grade: D

    Future products

    Chrysler: A new Jeep Grand Cherokee arrives next year along with a restyled Chrysler 300C and Dodge Charger. But Fiat products aren't expected to start hitting the market for another two years, and even then, their market acceptance is questionable.

    Grade: D

    Ford: Long-awaited small cars from Europe arrive next year; first the subcompact Fiesta, then the compact Focus. Question mark: Will American customers pay more to buy small?

    Grade: B

    General Motors: Still to come in 2009 are a Chevy Equinox and Cadillac SRX crossovers and Buick LaCrosse. The summer of 2010 brings a new small car, the Chevy Cruze, and late in the year, the plug-in Chevy Volt. It is an impressive lineup, but will customers be scared off by GM's financial woes?

    Grade: B

    Prospects

    Chrysler: Stalled for now, it is difficult to see Chrysler picking up speed again, given the weakness of its product line and the overall car market. If a Fiat deal is consummated, the Italian automaker may just be picking up pieces of the fractured company.

    Grade: D-

    Ford: Should its new European small cars become a hit and industry sales recover, it could escape danger. True competitiveness with global powerhouses like Toyota and Volkswagen is a ways off, however.

    Grade: C

    General Motors: Buried inside GM are the bones of a strong auto company. Getting at them, however, may be so time consuming and costly that there is no longer any muscle to hold them together.

    Grade: D