Chrysler LLC, Ford Motor Co. and General Motors Corp., which are likely to get the bulk of the loans, are losing billions and facing huge debts already as they try to remake their lineups from trucks and sport utility vehicles to smaller, more fuel-efficient vehicles.

The loan legislation, approved by Congress on Saturday, was passed to help the battered industry retool factories and develop technology to meet new government fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40 percent increase.

With the bulk of the money apparently going to the Detroit Three, it could come in the nick of time for cash-strapped automakers who might otherwise have trouble borrowing more to cover their bills.

Government regulations written by the Energy Department could delay the loans by up to 18 months. Congress specified that the agency produce preliminary rules within 60 days, and lawmakers who support the industry hope the funding arrives by spring.

Auto executives have said the government loans will speed up bringing new technology to market, but they have pledged to make more fuel-efficient models regardless of whether the loans arrive. The loans, however, could help them avoid making the choice between pursuing multiple fuel-efficiency technologies or further cuts, including more job losses, Chrysler CEO Bob Nardelli said last week.

Ford already has $25 billion in long-term debt, while GM has about $32 billion. Both are losing billions with no short-term prospect for profits. Chrysler, now a private company that does not have to report its debts, has seen the steepest U.S. sales drop of any automaker, down 24 percent through August.

This article appeared on page D - 6 of the San Francisco Chronicle