PHILADELPHIA (Reuters) - Billionaire investor Wilbur Ross said an "uncontrolled" bankruptcy of General Motors Corp would be a "disaster" and a prepackaged reorganization would be a better solution.
Speaking at the Wharton Crisis and Opportunity conference in Philadelphia, Ross said: "It doesn't work to do an uncontrolled bankruptcy. It would have to be prepackaged, with the government writing a really big check."
"It would be difficult to have a bankruptcy work and it would be impossible on a free-fall basis," Ross said.
He also said the auto suppliers needed immediate support. Since car makers scaled back vehicle production in January, the parts suppliers sold fewer goods and would have minimal accounts receivable or money flowing into their coffers.
"There were no receivables created in January because no one was making cars," Ross said.
Separately, Ross said he expects about 1,000 banks to fail before the economic crisis ends. He expects 2009 to be a big year for FDIC-assisted bank purchases.
Ross said he sees no chance for economic recovery in 2009 and any recovery in 2010 would not be robust.
(Reporting by Jessica Hall; Editing by Lisa Von Ahn, Phil Berlowitz)
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