Automakers must adjust their staffing levels and costs to take into account an unusually anemic auto market, while the government must adopt measures to underpin fragile consumer demand. 'If we get some healing in the economy,' the automakers might not need additional money, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. 'If we keep in the same kind of a funk we're in right now, that's a different story altogether.' Dealers say their showrooms are filled with attractive and attractively priced vehicles. 'They have wonderful products and it's as competitive a market as I've ever seen,' said Joe Serra, president of Grand Blanc-based Serra Automotive Inc., a chain of dealerships. But, he said, people are in no mood to buy. 'Ultimately, it comes down to consumer confidence.' The government has enacted measures to encourage banks to lend more, but financial experts say more action, such as the massive stimulus program proposed by President-elect Barack Obama, will be needed to reassure consumers panicked by one of the worst downturns in decades. 'We need to distinguish the long-term structural problems that the U.S. auto industry has from the immediate crisis,' Laura Tyson, former economic adviser to the Clinton White House, said Sunday on CNN's 'Late Edition.' 'Car demand is way, way down. It's down to 11 million from maybe a long-term trend in the U.S. of more like 14 or 15,' she said. 'Their consumers have been strangled, their suppliers have been strangled, and they have been strangled.' In addition to the credit freeze, which is slow to thaw despite the government's injection of huge sums into the banking system, the economic outlook is worsening. Obama and his advisers are drafting an even more ambitious recovery program than they envisaged, with the aim of creating or saving 3 million jobs in the next two years, up from their earlier target of 2.5 million. 'There's going to be real significant investment, whether it's $600 billion, or more, or $700 billion,' Vice President-elect Joseph Biden said Sunday on the ABC news show 'This Week.' Defending the program against critics who say it would further inflate the deficit, Biden said the economy was 'in much worse shape than we thought.' He said there was a growing consensus among economists that 'the scope of this package has to be bold.' But it is likely to face opposition from some of the same lawmakers who defeated efforts in Congress to help the auto industry. They said the loans wouldn't rescue the automakers, which would soon need more money. Mark Zandi, chief economist of Moody's Economy.com, told a congressional hearing he estimated that Detroit's automakers would need $75 billion to $125 billion. The head of the National Automobile Dealers Association, Annette Sykora, welcomed President George W. Bush's decision Friday to extend $17.4 billion in loans to GM and Chrysler, the most cash-strapped automakers. (Ford Motor Co. had asked for a line of credit but said it did not expect it tap it in the near future.) 'This is the first step toward restoring consumer confidence,' Sykora said. 'When you have the government declaring its confidence and commitment to U.S. auto manufacturers, it helps reassure the American public that domestic automakers will be around for the long term.' The White House attached strict conditions to the loans but rejected calls to force the automakers into bankruptcy in exchange for the aid. Bush's plan gives the automakers three months to restructure or then face bankruptcy. Looking tired but relieved, GM CEO Rick Wagoner said Friday that GM's sales this month were slightly ahead of its conservative expectations. 'But I think we have to expect that it will be tough for a while,' Wagoner said. 'The overall economic condition is so difficult.' Chrysler LLC CEO Robert Nardelli recently predicted January would be dismal. Both chief executives went to Washington earlier this month for a second round of congressional hearings bearing new restructuring plans, on top of their ongoing cost-cutting programs. GM proposed to sell, shrink or eliminate half of its eight brands in a far-reaching plan based on modest economic assumptions. It estimated that total auto sales next year could come in as low as 10.5 million vehicles and as high as 12 million. That compares with sales this year estimated at just over 13 million vehicles and last year's total of 16.1 million. GM also assumed a slow recovery, with sales unlikely to rebound to last year's levels before 2012. Sales were tracking above an annualized selling rate of 13 million vehicles until October. But then the selling rate plunged to below 11 million as the bankruptcy of Lehman Brothers in September sent the financial sector into a tailspin. 'We went down 2 million units in a month,' said Ellen Hughes-Cromwick, chief economist at Ford. But Hughes-Cromwick said she believed the market might start to recover next year. 'We think we should be seeing a bottom in the first half of next year.' In addition to the bridge loans, the government has taken less politically charged measures that will help the auto industry by stimulating demand for cars and trucks. The U.S. Federal Reserve has moved to make it easier for banks to offer more loans to consumers and dealers by moving to buy asset-backed securities to help banks clean up their balance sheets, and by reducing one of its key interest rates to virtually zero. 'We've got a lot of policy in the pipeline to help get the economy going next year,' Hughes-Cromwick said. Bush's auto bailout provides up to $13.4 billion in short-term loans for GM -- $4 billion on Dec. 29, and another $5.4 billion on Jan. 16. The last $4 billion is contingent on Congress approving the second half of the $700 billion Wall Street rescue package and would be awarded on Feb. 17. Chrysler will get $4 billion on Dec. 29 under the plan, which will be overseen by Treasury Secretary Henry Paulson for the remainder of the Bush term. Financial analysts said they were pleased the Treasury would be overseeing the loans and with the progress of the automakers. They said Treasury officials seemed to have a better grasp of the challenges than congressional aides. 'While Obama could name a 'car czar,' Bush's move to empower the Treasury in the auto bailout may set a precedent that is respected in the next administration -- even if Obama names a car czar, such a person could end up residing within Treasury,' J.P. Morgan analyst Himanshu Patel said in a research note. 'For the long-term health of the sector, it is much better, in our view, that Treasury govern the auto bailout rather than Congress.' News Staff Writers Robert Snell and Alisa Priddle contributed to this report. You can reach Christine Tierney at ctierneydteom.