GM says liquidity sufficient for 2008, has options

DETROIT (Reuters) - General Motors Corp believes it has sufficient liquidity to ride out the industry downturn in 2008 and could take more steps to cut costs if conditions worsened, a spokeswoman said on Wednesday.

"We continue to believe the company has sufficient liquidity for 2008 despite lower volumes," GM spokeswoman Renee Rashid-Merem told Reuters. "If conditions continue to deteriorate, we would consider other operating measures."

GM was responding to a report from Merrill Lynch issued Wednesday that said bankruptcy would be "not impossible" for GM if the U.S. auto market continued to slump. Merrill Lynch analyst John Murphy cut his rating on GM to "underperform" from "buy" and lowered his price target for the largest U.S. automaker to $7.

Rashid-Merem declined to comment directly on the Merrill Lynch report.

(Reporting by Soyoung Kim, editing by Gerald E. McCormick)