AFP reported that even if General Motors and Chrysler obtain billions more in government loans, the threat of bankruptcy remain high for the troubled automakers.

Moody’s estimated the likelihood of an orderly bankruptcy protection filing backed by the government at 70%. Mr Bruce Clark of Moody’s Investors Service said that "Despite the extension of considerable emergency funding to GM and Chrysler and their finance arms, we continue to see a high risk of a Chapter 11 bankruptcy filing by one or more of the US auto makers."

It may be noted that GM and Chrysler insist they can return to profitability if the US Treasury extends up to USD 21.6 billion in additional loans on top of the USD 17.4 billion approved in December 2008. That would bring GM’s total to USD 30 billion and Chrysler’s to USD 9 billion.

GM placed the tab of restructuring through bankruptcy at USD 100 billion while Chrysler said it would need USD 24 billion. Both said the government would likely be the only source of that financing and warned that liquidation and the loss of up to three million US jobs would be the likely outcome.

A poll released by Rasmussen found that 64% of Americans opposed providing any additional taxpayer backed loans for the embattled automakers and 57% say the government is not likely to get the money back.

(Sourced from www.thepeninsulaqatar.com)