General Motors and Chrysler face an immediate cash crisis in the aftermath of the Senate’s rejection last night of a US$14bn emergency loan package, analysts have said.

Standard & Poor’s Ratings Services credit analyst Gregg Lemos Stein told Dow Jones the automakers would struggle to make massive payments to suppliers due at the beginning of January without government assistance.

Other reports said some Chrysler suppliers had begun to demand cash on delivery, which the company said was impossible. The automaker has scheduled a meeting with suppliers for Friday (12 December) to hammer out a compromise arrangement.

“If anything, the automotive market has worsened since GM and Chrysler first said they may not have enough liquidity to make it into next year,” Lemos Stein said.

Buckingham Research analyst Joseph Amaturo told Dow Jones said failure of the loan package could force GM into bankruptcy. In a note published earlier on Thursday he had said that if the bill failed in the Senate, “GM is in a very precarious financial situation and likely files for bankruptcy by year-end.”

Industry pundits on US financial TV channels Friday morning [GMT] said GM’s position was precarious but ruled out any chance it would file for Chapter 11 this weekend.

A leading US senator has said that the only plan B remaining is the president – Bush administration intervention to order that funds be found from one of the already-authorised federal sources, the $700bn financial services (TARP) bailout fund or a $25bn fund originally allocated to help automakers develop more fuel-efficient technology.

GM, which maintains that a bankruptcy filing would see it liquidated because consumers would not buy cars from a bust company, said last night it would assess its options to ensure it remains viable.

Several sources familiar with loan negotiations told Dow Jones the company was likely to renew its request to the Bush administration to tap that $700bn TARP fund or appeal to the federal reserve bank for an emergency loan.

Lemos Stein told the news agency S&P is “very concerned about the spillover effects on suppliers,” adding, “in a worst case, Ford may have to utilise its liquidity to keep its supply base intact.”