US said to lean toward use of bankruptcy for autos

NEW YORK, March 30 (Reuters) - U.S. officials are leaning toward some use of bankruptcy in their plan to fix the U.S. auto industry, a person familiar with the matter said on Monday.

While most would prefer a restructuring of General Motors Corp (GM.N) and Chrysler [CBS.UL] outside bankruptcy, bankruptcy may be necessary to reach agreements with key stakeholders, said the source, who declined to be named because the talks are not public.

Under a potential bankruptcy filing, "good" parts of GM and Chrysler could be split off from "bad parts," Jared Bernstein, a member of the White House's auto task force said earlier on Monday.[ID:nWEN6660]

In a bankruptcy scenario being contemplated by U.S. officials, the "good" parts of Chrysler could be sold off to Italy's Fiat SPA (FIA.MI), this person said.

U.S. President Barack Obama rejected turnaround plans from GM and Chrysler earlier on Monday. Chrysler, controlled by Cerberus Capital Management, was told to complete a planned alliance with Fiat within 30 days or risk liquidation. (Reporting by Emily Chasan)