GM board reviews bankruptcy, says it’s not a ‘solution’

WASHINGTON: The board of directors of embattled US automaker General Motors is considering ���all options��� including bankruptcy, according to a report on the Wall Street Journal���s website late on Friday. The paper, citing sources , said the stance puts it in conflict with chief executive Rick Wagoner, who told lawmakers this week bankruptcy is not a viable alternative for the company.

GM, in a statement to the newspaper, said the board has discussed bankruptcy, but said the board did not view it as a ���viable solution to the company���s liquidity problems.��� A GM spokesman said the management is doing everything it can to avoid a bankruptcy filing. The company���s board has been convening by phone each Friday to discuss GM���s liquidity situation, according to the paper. On Thursday, Democratic lawmakers demanded that executives provide them with a plan of action in exchange for supporting any bailout. But analysts say the board has to prepare for bankruptcy if the government doesn���t come through with loans in time, and even with a loan if the US auto market doesn���t recover in the next year or so.

The board probably believes in the company's plan to get government help and survive, but members with financial knowledge also know that they need to explore the bankruptcy option because of GM's huge cash burn, said Kevin Tynan of New York-based Argus Research.