But analysts agree that significant capacity cuts by the Big 3 aren't likely. Chrysler group CEO Dieter Zetsche, for example, outlined a goal last year of increasing his sales by 1 million units a year by 2010.
"We will grow not by buying share, but by creating demand," he said at the time. "The only way to win is to beat the imports at their own game."
Zetsche said he expects a total U.S. market of about 18 million units by then. That would suggest a Chrysler market share of nearly 18 percent if the 1 million new sales are realized, up from sales of 2.2 million and a share of 13.1 percent in 2002.
GM CFO John Devine also doesn't talk like a man thinking about retrenchment.
"There's nothing magic about it," he said in a recent interview. "Sell cars, make money, generate cash flow. It's sort of a simple equation."
Lapidus says the Big 3 will never bite the bullet on capacity.
"They intend to try to cost-cut their way to prosperity," he says. "They cannot bear the thought of giving up volume and revenue for the idea of downsizing."
But the point may be moot: A significantly smaller GM or Ford probably could not pay its present level of legacy costs, analysts contend.
Rubin estimates that the Big 3's combined pension plan obligation totaled $172.102 billion in 2002, and that the spread between pension fund assets and obligations will grow to $48.4 billion this year from $45.3 billion in 2002.
That deficit is on top of forecast health care obligations of $95.9 billion, up from $92.6 billion last year.
The legacy burden puts the Big 3 at an enormous disadvantage vs. the Japanese. For example, Deutsche Bank Securities estimates GM's pension and medical costs at $25.39 per labor hour last year. Toyota's cost: $9.76 an hour.
The bank estimates GM's cost will rise to $34.46 an hour this year, while Toyota's will rise to $10.51.
Another way of looking at the imbalance -- GM has 339,000 retirees, nearly three for every one of its 125,000 active employees. In contrast, Toyota North America has just 65 retirees, compared with 20,500 total employees. And the picture for GM promises to get worse in a hurry: The average age of its workers is an industry-high 48.7, compared with 38 for Toyota.
Rubin, of UBS Warburg, says the Big 3 are losing the ability to pay their legacy obligations.
"Their earnings are deteriorating," he says. "And set against the pension and health care obligations that these companies have to meet, they do not generate enough cash today - or even several years out - to meet these obligations."
Heifler of Deutsche Bank points out that the Big 3's problems don't end with legacy costs.
"Aside from increasing pension, health care and other structural costs, the Big 3 face significant headwinds from price deflation and market share declines," he says.
"Each 1 percent decline in net price reduces GM's profitability by $1.125 billion, Ford's by $775 million and Chrysler's by $650 million."