EARLIER this month, the share value of General Motors hit lows not seen since the 1980s, prompting chief executive Rick Wagoner to issue a very public assurance that the car making colossus had no intention of filing for bankruptcy.

If he hoped such a bold assurance would steady investors' nerves, he was sadly disappointed because, the following day, the stock fell even further - and only recovered to where it had started the week.

The see-sawing share price is a reflection of the trouble times US car makers are having to endure.

GM is at the heart of these difficulties, caught up in an ugly row between the Delphi Corporation, America's largest parts maker, and the powerful United Auto Workers Union.

And it is threatening to turn very ugly indeed.

The union is threatening a walkout if Delphi manages to convince the courts to void its wages agreement, freeing it to impose massive wage cuts. A strike would shut down GM's North American car factories, and even with plenty of unsold cars in stock, threatens to burn through the company's billions of dollars in cash reserves set aside for poor trading conditions.

Although GM has plenty of money, many analysts believe the cash pile will be used up if a strike lasts more than a few months.

Delphi has already filed for bankruptcy. The union hopes GM will come up with money to help Delphi avoid wage cuts as the lesser of two costly evils.

But can GM really come riding to the rescue of Delphi? Only last week, it announced 30,000 job losses and a series of plant closures in a bid to get the business back on track.

That prompted Bill Ford, chairman and chief executive of GM's big rival, Ford Motor Co, to call for US Government intervention.

He said the American car industry should be given extra tax breaks on investment in modern factories, training and research and development, so they can better compete with Asian rivals.

His call came as Ford is putting the final pieces in place for its own restructuring, which is believed to include factory closures and job losses.

The plan is due to go before the board next month. Unions have been told to expect the worse. About 4,000 job losses are exected.

At the heart of the problem are crippling healthcare costs for retired employees.

Such is the vast cost of paying private treatment bills that Ford, Chrysler and GM now pay more in healthcare costs than they do for steel to build their cars.

In a speech to the National Press Club, in Washington, Mr Ford said: "This is not the moment to stop investing and concede our competitive edge in vital parts of the economy. Just the opposite, we must take the lead."

But the big three have grown old with their workforce.

Newer companies from the Far East don't have the same liabilities, either in retirement costs or modernisation spending, because they don't have the history.

Will tax breaks help get these US behemoths back on course? Washington would prefer not to find out.

But one thing is certain - if GM plunges into bankruptcy, the Government's nerve will be sorely tested.