"It would seem to be that they should Chapter it and the country should put up the financing," he said Wednesday morning. (Hear his full comments in the video)
The auto makers have reached a deal in principle with congressional leadersthat calls for the government to provide $15 billion in financing that could be revoked by a "car czar" who would oversee the bailout.
Trump rejected arguments that consumers would not buy vehicles from companies in bankruptcy, saying other industries have survived similar moves while continuing to sell their products.
"If you look at the airlines, I mean I'd rather buy a car than fly in an airline that's in Chapter (11)," he said. "People fly on the airlines. When Delta went, when United went, and so many others, people didn't stop flying. In fact I think their business went up."
"As long as they know the company's going to exist, as long as the government's behind it," people will continue to fly, Trump added. "You sit there as long as it takes to get wonderful union contracts and wonderful contracts with your suppliers and everybody else."
At the same time, he stressed the importance of making sure General Motors , Ford and Chrysler do, indeed, survive. He suggested that former General Electric CEO Jack Welch should be appointed the new car czar, though Welch is unlikely to get the position.
"You have to save the car industry in this country," Trump said. "General Motors can be great again, Ford can be great again, and Chrysler could be great."
On other issues, Trump said Sam Zell had good intentions when he bought the now-bankrupt Tribune. but faced an extremely difficult business climate. And he urged President-elect Barack Obama to get tough with the Organization of Petroleum Exporting Countries, particularly once the economy recovers and pressure renews to push energy prices higher.
"The problem is when the economy gets better OPEC is going to raise the oil price and the economy is going to get killed again," Trump said. "So somebody, our new president, has to deal very strongly with this illegal cartel."