Top Republicans demand bankruptcy for GM

WASHINGTON: Two top Republican senators called of Sunday for struggling General Motors to seek bankruptcy rather than fresh government aid as the best path to a long-term recovery by America's biggest carmaker.

"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11," John McCain, President Barack Obama's vanquished foe in last year's election, told "Fox News Sunday."

"They reorganise, they renegotiate their union-management contracts and come out of it a stronger, better, leaner and more competitive automotive industry," he said.

GM on Friday denied reports that it is considering a prepackaged reorganisation financed by the government under the "Chapter 11" provisions of the US bankruptcy code as a solution to its financial woes.

The reports came a day after GM's auditors voiced "substantial doubt" about the struggling automaker's ability to survive a collapse of global auto sales amid a deepening recession.

GM chief executive Rick Wagoner has repeatedly warned that the largest US automaker would likely be unable to survive a bankruptcy filing because consumers would be unwilling to buy GM's vehicles.