Noting the steep fall of Ford and GM stock prices last week, Engler said, 'It is not the time for meetings in Washington. It's the time for action.'

U.S. Energy Secretary Samuel Bodman said in a letter last month to Congress that it could take 'six to 12 to 18 months or more' to approve the loan rules for automakers -- a timetable that has been denounced by members of both parties of Michigan's congressional delegation, as well as both presidential candidates.

GM spokesman Greg Martin said the automaker is eager to see quick action on the loan program.

'We welcome the strong support and recognition that the auto industry is vital to the nation's economic health,' he said.

Martin added: 'We hope DOE rulemaking can keep pace with the needs of the industry and consumer demand.'

Congress approved the $25 billion program as part of the 2007 energy bill to help automakers retool older plants to build advanced fuel efficiency vehicles, but didn't fund it. The energy bill requires the auto industry to hike the fleetwide efficiency of passenger cars and light trucks by at least 40 percent by 2020. Congress approved funding late last month.

But officials in the White House were divided over whether to support the $25 billion, raising questions about whether the Bush administration would follow Engler's advice. President Bush held a White House meeting on the issue in mid-September with key advisers, but decided not to take a public position.

Engler, who is president of the Washington-based National Association of Manufacturers, said if the Energy Department couldn't 'work through the weekend to get this done then it is time for that department to stand aside and let the Treasury Department take the lead.'

He said the Energy Department 'had failed miserably' in its handling of loan guarantees for nuclear energy projects.

'This is the same department that took more than two years to implement loan guarantees for the nuclear power industry and then they failed to get them right,' Engler said.

Energy Department spokeswoman Healy Baumgardner said the agency is moving quickly.

'We are following the law and addressing realistic expectations,' she said. 'Successful and timely execution of this program will be achieved through serious and responsible implementation of the law -- requiring more than 'the weekend to get this done' -- not through uninformed and inaccurate sound bites that are not supported by the record.'

She noted there are many legal hurdles and regulations to follow to issue loans. 'Congress had the opportunity to waive one or more of these requirements enabling for a faster process, but failed to do so,' she said.

Some Michigan delegation members and U.S. Sen. Barack Obama, the Democratic presidential nominee, want to double the amount of loans to $50 billion over three years.

Rep. John Dingell, D-Dearborn, chairman of the House Energy and Commerce Committee, said he would work to get the additional $25 billion approved next year. Republican nominee Sen. John McCain hasn't taken a position on the extra $25 billion.

In an interview, Engler noted the steep falloff in GM and Ford stock prices last week.

'There is legitimate concern ... about how the companies get back on track,' Engler said. He expressed some doubts about Big Three prospects. 'I am cheering for them, but they have to deliver. ... Can they move fast enough?'

He predicted 2009 would be even worse for the auto industry.

'I do think everyone is going to have to survive '09, because that looks to be a very ugly year, much worse than '08,' Engler said.

Manufacturing accounts for 13 million jobs and about $1.6 trillion in U.S. economic output, even though the United States has lost 107,000 manufacturing jobs in the past three months.

Engler also said Michigan's economic woes 'are as serious as I have ever seen.'