The auto industry's formal plea for federal assistance commenced Tuesday, as executives from the Big Three auto makers and the president of the United Auto Workers Union made their case before the Senate Banking Committee for $25 billion in rescue funds.

Committee members opened the hearings by voicing their reservations about an industry bailout. Senate Banking Committee Chairman Sen. Christopher Dodd (D-Conn.) criticized the industry for its failed business model.

“In short, the auto makers have failed to adapt to change, in my view, and the shareholders are rendering judgment for that fact. They have approached 21st-century challenges with a decidedly 20th-century mindset, and we’re all paying the price for it,” Dodd said.

Nevertheless, Dodd reluctantly admitted that he supports a relief plan for the industry, provided that legislation would include tough conditions and strict accountability.

“…I support action as a way to minimize the possibility of destabilizing such a destabilizing such a destabilizing event in our overall economy,” Dodd said. “At a time like this when our economic future is so tenuous, we must do all we can to ensure stability.”

Sen. Sherrod Brown (D-Ohio), echoed Dodd’s endorsement. “If it makes since to give one bank $25 billion, we can certainly invest the same amount to save the entire domestic auto industry.”

Sen. Richard Shelby (R-Ala.) testified that he hoped the committee would be cautious before passing anymore legislation to assist the auto industry.

“I’m concerned that once again we’re about to employ the 'ready-fire-aim approach' to problem solving,” Shelby said. “Before we take that step, I believe we need to determine a number of things.”

Shelby went on to say that he hoped the committee considered the possibility that diluting TARP with another assistance package would fatally weaken the program, and urged the committee to determine the current financial condition, and both the short- and long-term outlook for the auto firms before providing aid.

Executives from General Motors (GM), Chrysler and Ford (F) made their case and emphasized that they would not sustain the current slowdown without assistance. They warned of the impact their failure might have a bad effect on the broader economy.

“We are asking for assistance for one reason: to address the devastating automotive industry recession caused by our nations’ financial meltdown, and the current lack of consumer credit, which has resulted in the critical lack of liquidity within our industry,” Robert Nardelli, Chrysler Chairman and CEO testified in a pre-released speech to the committee.

UAW President Ron Gettelfinger emphasized the need for swift action, and called the situation “dire,” “critical,” and “a crisis.” He emphasized the fallout that a failure of the industry would inflict.

“In regards to the retirees from the Detroit-based companies, their spouses and their dependents, and we’re talking about a million people here, they could suffer sharp reductions in their pension benefits and the loss of their health insurance coverage,” Gettelfinger said.

GM Chairman and CEO Rick Wagoner argued that it is the credit crisis alone which has damaged the auto industry, and disagreed with criticisms that the companies are not doing enough to position themselves for success.

“Our industry, which represents America’s real economy -- Main Street -- needs a bridge to span the financial chasm that is open before us,” Wagoner said.

Not everyone is "reluctantly" in favor of a bailout. Peter Morici, an economist with the University of Maryland argued the Big Three should be allowed to go into bankruptcy, stating, “In my mind chapter 11 is viable."

“If things are so dire that they have to come here and submit to a government oversight board…is $25 billion really enough in the grand scheme of things?” Morici continued, “I would suggest that if you give them $25 billion this month, they will be back.”

Leaders from the industry will be heard before a House panel Wednesday.