General Motors was making progress on a government-required restructuring plan and would meet next week’s deadline for submitting it, one senior Democratic senator has said.

His comments came after GM CEO Rick Wagoner met congressional allies and other key members on Tuesday.

Senator Carl Levin also said any bankruptcy filing by a US automaker would be a “nonstarter” and would jeopardise the industry, Reuters reported.

The news agency noted that the US treasury has retained law firms with bankruptcy experience and an investment bank to advise officials on GM’s taxpayer-backed restructuring.

“Bankruptcy is not an option because you lose your industry. People are not going to buy cars if they are not confident the warranties will be good and the dealers will be there,” Levin told Reuters. “It’s just a nonstarter and doesn’t do anything for you.”

GM and Chrysler have both previously ruled out bankruptcy but some outside analysts argue they lack the leverage necessary to win concessions from bondholders and labour without the threat of a Chapter 11 bankruptcy filing.

The Obama administration, which will review the restructuring plans, must decide by 31 March 31 whether GM and Chrysler would be commercially viable if their restructuring were permitted to proceed, the report said.

If not, the government could require immediate repayment of bailout funds – GM has received US$9.4bn of a promised $13.4bn so far, while Chrysler has received $4bn and is after $3bn more.

A source with knowledge of at least one of Wagoner’s meetings in Washington told Reuters the GM CEO’s intention was to convey to Congress that GM was on a path to viability and still planned to meet stricter government fuel efficiency standards effective in 2011.

He told Reuters the automaker’s turnaround plan was moving forward and was comprehensive.

Levin reportedly said any discussion about more aid to GM and Chrysler depended on what their plans looked like next week and whether they could obtain at least interim commitments from bondholders and labour for new concessions.

United Auto Workers legislative director Alan Reuther told Reuters there was “some ambiguity” about concessions and hoped the government would soon appointment a trustee or “car czar” to clear up important questions.

“Our bargaining team is meeting with the companies (GM/Chrysler) and working through what modifications would be possible,” Reuther said.

Lawmakers said a decision by the Obama administration on a ‘czar’ could come within days.