GM uncontrolled bankruptcy would be disaster: Ross

General Motors vehicles are seen at a car dealership in Toronto December 12, 2008.

PHILADELPHIA (Reuters) - Billionaire investor Wilbur Ross said an "uncontrolled" bankruptcy of General Motors Corp (GM.N) would be a "disaster" and a prepackaged reorganization would be a better solution.

"It doesn't work to do an uncontrolled bankruptcy. It would have to be prepackaged, with the government writing a really big check," Ross said at the Wharton Crisis and Opportunity conference in Philadelphia.

"It would be difficult to have a bankruptcy work and it would be impossible on a free-fall basis."

He also said 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. "Much of the industry is in very bad shape."

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.

"We see financial institutions as an attractive industry," Ross said, noting that he has invested in several mortgage servicing businesses since 2007.

"From our present base, we have great scalability," Ross said, noting that his operations service about 575,000 mortgages. "We could probably double our size in the next 12 months."

Ross said he sees no chance for an economic recovery in 2009 and any recovery in 2010 would not be robust.

"We'll be slow getting out of it," Ross said. "The great danger is that much of the stimulus money will be saved rather than spent, so that won't help the economy. The slowdown in the American consumer has helped touch off the global crisis."

(Reporting by Jessica Hall; Editing by Lisa Von Ahn, Phil Berlowitz, Richard Chang)