Michael Moore (yes, I know) makes the case. I think its a pretty good one. Judge for yourself.
Here's how it would work, at least, if they did it my way.
We buy the three companies up. If we're going to give you BILLIONS of dollars, we want ownership. We appoint new management, competent management, turn them around, and sell them off at a later date( 8-10 yrs? how long it will take i don't know) and make (potentially) a substantial profit.
And if we're running things, we can FINALLY get those fuel standards up and make the changes we all know Detroit has been so very reluctant to make. But they need to be made. They've needed to be made for decades.
So why not cut out the middle man and just buy them up and make the changes that need to be made?
On the con side, this is basically speculation. Buy low, sell high. And that's part of why we got into this mess (spending 10 billion a month in Iraq for the last 6 years probably had a lot to do with it too).And I'm sure there are other downsides i haven't thought of yet.
But if the big three go under, that's a million jobs lost. And I don't know if a million American families can take that kinda hit.
UPDATE: From the comments, Michael Moore himself wrote on this issue here.