Washington  - US President George W Bush Bush is weighing whether to endorse a structured bankruptcy for ailing automakers to prevent a "disorderly collapse" of the industry, the White House said Thursday.

"The president is not going to allow a disorderly collapse of the companies," spokeswoman Dana Perino said. "That is not an option."

"There's an orderly way to do bankruptcies that provides for more of a soft landing," she added. "I think that's what we would be talking about."

Chrysler LLC, Ford Motor Co and General Motors Corp have warned that they could collapse without federal assistance, placing hundreds of thousands of jobs at risk in an economy that has already sunk into recession.

The Senate last week blocked a 14-billion-dollar rescue package for the automakers, who said they desperately need the money to retool their operations. The Bush administration has contemplated diverting that amount from the 700-billion-dollar package for Wall Street approved in October to the Big Three car makers. That move could also be done as part of the structured bankruptcy.

"Under ordinary circumstances, failed entities, failing entities should be allowed to fail," Bush said to the American Enterprise Institute, a conservative think tank in Washington. "I have concluded these are not ordinary circumstances."

Bush said the credit freeze in the financial sector largely behind the economic crisis was beginning "thaw," but warned the failure of the automakers would deepen the recession and reverse the trend in the finance industry.

"I am worried about a disorderly bankruptcy and what it would do to the psychology and the markets," Bush said. "They're beginning to to thaw, but there's still a lot of uncertainty."

Perino said Bush was "very close" on rendering a decision on whether to support a structured bankruptcy that would be overseen by the courts.

In an attempt to stave off bankruptcy, Chrysler said on Wednesday it will shut down all of its manufacturing plants for at least one month because of plummeting car sales. Friday will mark the last day of production at the plants.

Ford said it was adding a third week to the two-week holiday break at all but two plants to account for failing sales. GM last week said it would close 30 per cent of its North American plants for the first quarter of 2009, citing a 36-per-cent drop in sales in November and a 41-per-cent decline in 2008 from the previous year.

The three automakers earlier asked Congress for a combined 34- billion- dollar package. The scaled back 14-billion plan was approved by the House, but blocked in the Senate on a procedural vote. Republican Senators argued the automakers had not gone far enough in their structuring plans to justify spending taxpayer dollars to bail them out. (dpa)