The factory where Henry Ford first introduced the moving assembly line 95 years ago for the mass production of cars lies abandoned in the heart of Detroit – a rotting hulk of peeling paint, broken windows, rust and ice.

Yet in its midst one business is flourishing: lined up in uneven rows like bad teeth are dozens of vehicles dragged there from traffic accidents or repossessed from owners unable to meet their payments.

“We rent the space to sell them off here,” says Jamie Walls, of ANM Auto Auctions. “Some are pretty beaten up but we’re booming. In these times, you know, everybody wants a bargain.”

She is aware of the historic significance of the Highland Park site, even if there is confusion with a latterday phone firm. “I think this is where Ford made T-Mobiles,” says Ms Walls. You mean Model Ts? “Oh yeah,” she replies, frowning. “I don’t know why I said that. It’s pretty sad, I guess.”

Not as sad as seeing an industry born in this city, which for so long symbolised and helped to build the American Dream, being reduced to a state comparable to the smashed-up cars she sells at auction.

Detroit’s loss-making Big Three – General Motors, Ford and Chrysler – have once more been begging for government handouts and credit lines to help them to limp through one more freezing Midwestern winter.

Their once-swaggering chief executives have been humiliated in Congress where they were forced into promising to slash costs, mend their mismanagement, get rid of corporate jets, even accept directives from despised politicians.

Even so, there is real doubt that the Senate will approve a $14 billion (£9.3 billion) rescue package. America has become weary with the travails of car-makers producing unpopular vehicles at unsustainable cost.

Detroit, the once thriving Motor City that boasted the highest median income and home ownership rate in the country, has long since become a dismal place riven by crime and squalor. Its population has halved from its postwar heyday to less than one million, with whites fleeing race riots of the 1960s to live in the suburbs.

A few blocks from the disused Ford plant is Pasadena Street where two thirds of the stout family homes built to house car workers are abandoned or burnt-out. One has had its front windows smashed in and the front door is missing. Inside, snow covers the stairs and the remnants of a shattered family life including teddy bears can be seen strewn around by looters.

A child’s colouring book lies open showing a picture of “our home”. The mother had written notes to herself. One heading of “solutions on how to survive”, says: “Eat every day. Wash clothes. Buy soap. Lay my head.” Another to-do list suggests she must “buy gear” and “save money for a car”.

Next door Roberta Jones, 48, shakes her head. “It used to be beautiful around here,” she says. “But I think things will pick up with the new president. I’m not gonna be living here for ever. I will try to get me my own house.”

For decades city leaders and car-making executives have been making similar predictions of an imminent revival of desolate downtown Detroit.

Kwame Kilpatrick, the mayor whose vision for rebuilding the city was once a cause for hope, has had to resign after successive scandals involving marital infidelity and perjury. He is currently serving 120 days in jail for lying under oath and assaulting a sheriff's officer who was trying to deliver a subpoena on him.

The city’s American football team, the Detroit Lions, have lost their last 13 games and are on course to become the first member of the NFL in history to go without a win through an entire season.

The gleaming chrome-and-glass towers of the Renaissance Centre, currently the global headquarters of General Motors, presents a boldly optimistic face to the world after an expensive refurbishment during the false dawn of an SUV sales boom in the 1990s.

Above walkways curling overhead like a motorway interchange, the company showcases its latest models alongside its heritage collection of vehicles from its more glorious past. The few people passing through gather around the vintage Cadillacs and ignore the new Chevrolets on display.

Such nostalgia for a sepia-tinted, tail-finned age is ingrained in Detroit. This was the city whose factories became the “Armoury of America” in the Second World War and built most of the world’s cars in the decades afterwards.

There was a corporatist culture of big unions, big cars, big firms, sprinkling benevolence down through the economy. The American automobile was more than just a symbol of aspiration and freedom; for millions of workers connected to the industry it was the route to personal prosperity and a suburban culture of abundance.

These days, faced with competition from abroad and more efficient union-free plants in the South, the Big Three are saddled with multibillion-dollar legacy costs to retired workers in healthcare and pensions.

At Miller’s Bar near Ford’s giant Rouge River plant in Dearborn, Doug Kirkpatrick, a retired worker, says: “The Ford family always used to make sure we were taken care of but now they are chipping away at my benefits. Everything is changing.”

Tom Fedewa has just taken redundancy from a car component firm, Tenneco. “I’m 58 and I’m retiring. I wanted to work on. I have a whole lot of emotions, but anger is one. I resent the high-and-mighty attitude of politicians in Washington. They say it’s all the auto-workers’ fault, but what about the trade deals they have done that allow Japanese and Koreans to sell their cars here when we can’t do the same in those countries?”

At another bar overlooking the car plant, Tracy Burgess, 35, an inspector on Ford’s production lines, says: “If Washington can bail out Wall Street they should do us the same courtesy without drilling us like they have been.”

Paul Kintner, 44, finishes his beer and declares: “I know we still have a future. I drive a Ford with 300,000 miles on the clock – that’s the quality of our product.”

His defiance, however, is matched with a certain amount of desperation in Detroit. Last weekend the city’s Greater Grace Temple Church placed three SUVs on the altar – one for each of the stricken motor manufacturers – and asked the congregation to pray for divine intervention.

“We have never seen as midnight an hour as we face this week,” the Rev Charles Ellis told churchgoers. “This week, lives are hanging above an abyss of uncertainty as both Houses of Congress decide whether to extend a helping hand.”

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