Automakers view bankruptcy as last resort

DETROIT, July 14 (UPI) -- Bankruptcy would be a move of last resort, and a risky one, for U.S. automakers, industry analysts said Monday.

The possibility of Ford Motor Co., General Motors Corp. or Chrysler LLC running out of cash before completing a turnaround to more fuel-efficient cars seems closer each day, although it that reality may not hit until the end of 2009, The Detroit News reported.

Still, "it's clear that the risks and challenges are much greater than the benefits of filing," Gregg Lemos Stein of Standard & Poor's told the News.

The biggest hurdles would be the public's perception that an auto company filing Chapter 11 would not be able to guarantee parts or service on cars meant to last three to 10 or more years, analysts said.

"If a supplier files for bankruptcy, the general public wouldn't even know that. So it doesn't have the same implication," said Tony Clary, industry manager at Euler Hermes, a credit insurer.

U.S. vehicle sales could fall to their lowest level in more than 10 years and fall further in 2009, analysts said.

Merrill Lynch estimated sales of U.S. vehicles could fall to 14 million next year, the News reported.