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General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with internal discussions.

Auto executives have warned that bankruptcy would lead to liquidation as customers abandoned the companies. In response, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy — negotiated with workers, creditors and lenders — could be used to reorganize the industry without liquidation, a person familiar with that matter said.

Desperate times call for desperate measures - read more about the troubled US Auto Industry here.

How it all works, Investment News Chrysler, Ford, General Motors, US Auto Industry

On the day that U.S. auto executives appealed to Congress for a $25 billion bailout, General Motors Corp. reported that its U.S. sales plummeted 41 percent in November compared with a year ago. Ford Motor Co. announced its sales dropped 31 percent, and Chrysler said its sales plunged 47 percent.

As credit remained tight, retirement accounts continued to be decimated, unemployment jumped and the recession deepened last month, the plunging price of gasoline was not enough to generate a rebound in auto sales.

The U.S. sales of Toyota Motor Corp., which may surpass General Motors as the world’s largest auto company this year, declined by 34 percent.

Dire times for the US Auto industry - check out the full story and insights here

Investment News Auto industry, General Motors, US Economy