General Motors posted a massive $15.5 billion second-quarter loss, a widening deficit that underscored the mounting problems facing the giant automaker, Detroit, and the auto industry in general.

The huge loss, one of the worst in industry history, and nearly double the record deficit posted by Ford, last month, was the result of a variety of problems: labor unrest, the collapse of the light truck market, the slump in housing, record fuel prices and the overall slide in new vehicle sales.

The big loss included $9.1 billion in one-time charges, which included $3.3 billion to buy out 19,000 U.S. workers. Another $1.3 billion was written off because of the declining value of the trucks held in the portfolio of General Motors Acceptance Corp., GM’s captive finance subsidiary – which it owns in partnership with the private equity fund, Cerberus Capital Management.

The huge problems facing GM – which slipped to number two in the global sales sweepstakes, behind Toyota, during the second quarter – forced the automaker to announce a new restructuring plan, last month, that will lead to billions of dollars in cost-cutting. Among the targets: a reduction of 5,000 salaried jobs in the months to come.

TheCarConnection.com will have more to come later today.

The cuts keep coming, and anyone collecting a check from Detroit's Big Three has to be wondering for how much longer.

General Motors has confirmed that the 15 percent cut in salaried "costs" it announced earlier this month will result in the loss of 5,000 white-collar jobs. Look for the bulk of those cuts to occur in the U.S., though some could be trimmed at overseas operations, as well.

It's hard to keep track of all the players without a scorecard, it seems. So, we've added it all up, and Detroit makers plan to cut 10,000 salaried staff, as part of their latest round of desperation cost-cutting measures.

But that's not the end of the bad news. Chrysler has announced it is indefinitely suspending tuition reimbursement for virtually all of its salaried employees, in the U.S., Canada, and Mexico. Ford took similar steps in June. GM will continue its tuition assistance program, but no one is saying for how much longer.

Look for still more bad news from the domestic giant on Friday, when it releases what, by all expectations, will be a devastatingly bad second-quarter earnings report.

If something seems too good to be true…maybe it is. Yet for the last two decades, automakers have swallowed a bit of pixie dust (or was that electric Kool-Aid?) and convinced themselves the lease is the industry’s best friend.

There seemed to be plenty of reasons why automakers and auto buyers alike loved leasing. You, as a car-buying consumer, might have used a lease to buy a fully loaded luxury SUV on a monthly budget more suited to a mainstream sedan. Perhaps you got your teenage child a brand-new car, instead of a rusty heap from the corner used car lot.

Automakers not only got buyers who might not have been able to afford a new car, but millions more motorists moved up-market. And, contended the early lease proponents, brand loyalty would surge, as well. Why? Because a manufacturer would know precisely when a customer would be required to turn in their vehicle, explained former Ford marketing czar Bob Rewey. And if you knew that, you could ramp up your marketing efforts, targeting a specific customer more effectively than ever before.

So it worked – in theory. But there was a catch.

Leasing has actually been around for decades. But in the past, it was “open ended.” That meant that a consumer never really knew what the final costs of the deal might be. Let’s say you leased a Ford Explorer and it’s come time to turn it in. With an open-ended lease, if the value of that vehicle has dropped since the deal was written, you might have cover the gap – much as you’d lose out if you bought a car that dropped more than anticipated when you traded in.

With today’s closed-end leases, however, the manufacturer assumes that risk. And knowingly so. In recent years, automakers have taken a “let’s pretend” approach to residual value, the technical term for what a vehicle is worth at the end of the lease. Sometimes they consciously inflate that number, and count it as an incentive – sort of the lease alternative to a rebate. Other times they simply ignore facts and come up with a number that they should know better than writing into a contract.

Either way, the lease bubble has burst. The residuals forecast for SUVs and light trucks, in particular, are coming in nowhere near what was predicted just a couple years ago. Add a rising number of defaults, and you have a full-fledged mess, one that will cost the industry billions, considering that leases currently account for 20 percent of new-vehicle business among Detroit Big Three. (And for some import luxury marques, it’s substantially higher.)

If you thought the industry was worried about the general downturn in the U.S. auto market, add in the leasing situation and you’re starting to see signs of panic.

This past week, Chrysler announced that its captive financial subsidiary will halt automotive leasing. Now, Ford and General Motors plan to sharply trim back their leasing programs. And a number of banks, including J.P. Morgan Chase’s Chase Auto Finance unit, are scaling back or are cutting leasing out, as well.

Who loses? That’s a good question. Certainly, there’ll be a lot of consumers forced to downsize their aspirations. And plenty of others might be driven out of the new vehicle market entirely. For manufacturers, that’s lost business and lowered expectations, as it’s another reason why the ongoing market slump might continue.

Listening to the latest news from Ford Motor Co., as it rolls up a record, $8.7 billion loss and its plummeting market share, it's hard to imagine a time when the very name "Ford" was as synonymous with cars as the word "automobile."

The reason was simple: the Model T. Otherwise known as the Tin Lizzie, it is the car that put America on wheels. It wasn't pretty, nor was it fast or particularly comfortable. But it was inexpensive and relatively easy to operate. And it sold by the millions, especially after the company's eponymous founder, Henry Ford I, came up with the concept of the moving assembly line.

Born on a farm in the Detroit suburb of Dearborn, Ford was an inveterate tinkerer, racer, and entrepreneur. It took him three tries to launch a successful company, and even that third attempt might not have made it had he not come up with the Model T, which went on sale exactly 100 years ago.

Production began at a small factory, on Piquette Road in Detroit, and contrary to conventional wisdom, those early flivvers were built pretty much like every other car of the day, one at a time, bits of pieces of body, chassis, and engine sprawled across the brick Piquette Plant's wooden floor. Even then, demand grew so rapidly, Ford moved production to an all-new building, designed by the legendary architect Albert Kahn in 1910.

It was one of the biggest factories of its day and featured a variety of breakthroughs, including a roof designed to flood the plant with natural light. But the real breakthrough came soon afterward, when one of his employees, William "Pa" Klann, came back from visiting Chicago's stockyards. There, animal carcasses were rolled from one station to another, each worker assigned to slice off a particular cut of meat.

Initially skeptical, Ford gave his nod and the factory bosses tied ropes connecting a line of partially assembled bodies, pulling them through the plant, where workers would bolt on one piece at a time, until they had a fully assembled Model T.

By 1914, they had the process down so precisely that a new flivver rolled out of the Highland Park plant about every 60 seconds, the assembly process taking just 93 minutes per Model T. In fact, Ford was assembling the Tin Lizzies so fast that by the end of the decade, it produced 9 of every 10 cars sold worldwide. And it didn't even need to advertise between 1917 and 1923.

The Model T set a whole chain of events in motion. Even as the car made it possible for much of America to afford wheels, it helped create a new middle class. In the early days of the auto industry, employees were worked so hard and paid so poorly, that turnover in the plants often ran to 300 percent or more annually.

Historians still argue over why Ford approved the $5-a-day wage. Was it to create a market for his new cars, or to reduce turnover? Probably both, as it helped stabilize the workforce while also boosting sales. Ford was also a proponent of good roads - which would help workers move out of the tenements of the cities, often beyond the reach of the day's streetcars.

While even the cheapest cars cost north of $2,000 when the first Model T appeared, Ford brought the first flivver into the showroom at $850, and as he perfected his mass production techniques, he continually cut the price, to $500, $450, and in its final years, to just $300 - about what a typical Highland Park Plant worker could earn in four months.

While Ford may today have a reputation as an innovator, he could be incredibly cantankerous and stubborn. Early on, he offered an array of color choices, but in 1913, he went to black alone. Why is another point of debate. It dried faster than the other primitive paints of the day - which could sit in warehouses for days, creating the potential for scratches, scuffs, and contamination. But the tight-fisted Ford may have simply been trying to save a few bucks. "Actually, he just wanted an economical and durable color that could be applied easily," his great-grandson, Edsel B. Ford II, told the Detroit Free Press.

Ford's obdurate nature began to hurt the company, in the 1920s, as competitors began to figure out how to challenge the Model T's stranglehold on the market. Among the most effective competitors was General Motors and its new CEO, Alfred P. Sloan. He famously boasted that GM would build "a car for every purse and pocketbook," and in just about any color that the public wanted, one could add.

Sloan also introduced the concept of styling at GM, a sharp contrast to the function-is-form philosophy of the Model T. And by the mid-1920s, that broke Ford's stranglehold. With his son, Edsel I, pleading for change, Henry finally approved the new Model A, shutting down Highland Park on May 26, 1927, for a lengthy changeover.

The new car helped regain some of Ford's faltering momentum, but the company's dominance was broken. GM became the new king of the hill, a position it held until this year, when the Japanese giant, Toyota, was able to grab global sales leadership for the first half of the year.

Chrysler is about to begin the third round of white-collar job cuts it has made in 18 months, announcing plans to eliminate about 1,000 salaried jobs worldwide.

As the maker is primarily based in North America, most of the cutting will come at its global headquarters and technical center in the Detroit suburbs.

The latest reduction follows a dismal 22 percent decline in the automaker’s sales during the first half of 2008. But it leaves observers wondering just how much further the company can continue to cut, especially as it struggles to develop the smaller cars and crossovers it desperately needs to replace the big pickups and SUVs American motorists have largely walked away from.

“The signs of economic challenge continue for the U.S. market and as a result, further actions must be taken to improve our business and return to profitability,” Chrysler’s director of human resources, told employees in an e-mail.

The cutbacks began even before the break-up of DaimlerChrysler AG, but have accelerated since the U.S. maker was sold off by its former German partner, Daimler AG. New parent Cerberus Capital Management does not release financial figures, but it is considered likely that Chrysler is rolling up serious losses.

Chrysler is by no means alone. General Motors announced last week plans to trim salaried job costs by 20 percent, while Ford has targeted a 15 percent reduction. It remains unclear how much of those cuts will be focused on U.S. operations and Detroit, in particular.