Cash-strapped US auto major General Motors Corp is considering "all options", including bankruptcy, according to a report published on the Wall Street Journal's website.

The report comes after Motors announced an extension of production cuts in the US and Canada for a second week and moves to keep its Oshawa truck plant shut till July next year.

GM sells 95 per cent of its Canadian vehicle production in the US, where vehicle sales have collapsed in the economic and financial downturn.

The report, however, is in contrast with GM's on stated views. Rick Wagoner, its chief executive, had told lawmakers that bankruptcy was not a viable alternative for the company.

The report said GM had, in a statement issued to the newspaper, said its board had in fact discussed bankruptcy, although it may not be a "viable solution to the company's liquidity problems."

Wagoner, along with chief executives from Ford Motor Co, and Chrysler LLC, had discussed the auto industry's problems with lawmakers and sought $25 billion in aid from the government.

While the Democrat senators were in favour of a federal bilout plan, Republicans objected to a proposal to provide $25 billion from the $700 billion financial bailout programme.

Democratic lawmakers, however, demanded that executives provide them with a plan of action in exchange for supporting any bailout.

While GM sources said the company's management would do anything to a bankruptcy filing, there is little option left for the Detriot major other than that.

The company's board has been monitoring GM's liquidity situation, according to the paper.

Wagner said recent news coverage only showed that the perception of most people about GM had not kept pace with the company's progress.

He said GM, in fact, has made tremendous progress transforming its business in recent years.

''Since 2005, we've reduced our annual structural costs in North America by 23 per cent, or $9 billion… and expect to reduce them by about 35 per cent, or $14-$15 billion, by 2011. Between 2003 and 2010, we'll reduce our US hourly labor costs from $18 billion to $6 billion,'' Wagner said.
 
GM also hammered out a labor agreement with the UAW last year that would enable it to virtually erase our competitive gap, he said, adding, that GM is now matching – or even beating – foreign automakers in terms of productivity, quality, and fuel economy.  By 2010, we'll match them on labor costs, as well, he added.

''What exposes us to failure now is not our product lineup, or our business plan, or our employees' ability to work hard, or our long-term strategy. What exposes us to failure now is the global financial crisis, which has severely restricted credit availability, and reduced industry sales to the lowest per-capita level since World War II,'' Wagner pointed out.

And, he said, if the domestic industry were allowed to fail, the societal costs would be catastrophic:  three million jobs lost within the first year, US personal income reduced by $150 billion, and a government tax loss of more than $156 billion over three years.

The lawmakers, however, are against any congressional bailout of the distressed US auto industry which is intended to be "life support." But they do not have the option of letting the auto industry die either.

But, if federal help is not forthcoming, GM, Ford and Chrysler may have to seek bankruptcy or exit US. GM still is looking at the Congress for action.