This article is more than 11 years old

This article is more than 11 years old

The ailing US carmaker General Motors saw its shares collapse to their lowest level since the Great Depression after six top executives dumped personal stock holdings, fuelling fear of imminent bankruptcy.

As GM and the Obama administration continued to plead with reluctant lenders to write off much of the company's $27bn (£18bn) in debt, the shares dived by 29 cents to close at $1.15 , valuing the largest of Detroit's motor manufacturers at barely $700m.

At one point, GM's shares fell as low as $1.09, their lowest level since April 1933. The slump came after half a dozen senior managers cashed out equity for a knockdown total price of $315,000.

The sellers include GM's former head of product development Bob Lutz, a veteran Detroit figure who stepped aside to become a senior adviser to the company last month and who offloaded his entire holding of 81,360 shares for $130,989.

Lutz's successor, Thomas Stephens, liquidated stock as did North America president Troy Clarke, manufacturing chief Gary Cowger, head of European operations Carl-Peter Forster and GM's chief information officer Ralph Szygenda.

A GM spokeswoman admitted that shareholders face "some pretty stark choices". If the company strikes a deal, GM will issue billions of new shares to banks, unions and the government to cancel debt, vastly diluting existing stock. If it fails to win an agreement, shareholders will rank as unsecured creditors in the bankruptcy courts and could get nothing.

The US treasury has kept GM afloat with $15.4bn in emergency loans. When asked about the stock sales, a White House spokesman, Robert Gibbs, said he would "resist the temptation to comment on individuals' personal stockholdings, except to say that the president and auto task force want to ensure the continuation of General Motors that puts it on a path that doesn't require continued government subsidies".

For many of GM white-collar staff, the company's troubles have meant the evaporation of a career's worth of savings in company stock. If the six executives had sold their shares in October 2007, before the economic crisis began, they would have made $8.6m between them.

Detroit's public figures are rallying round the car industry. The musician Eminem has announced that he will fly 200 out-of-work car workers from Michigan to Los Angeles for the taping of a live performance on Friday.

Detroit's newly elected mayor, Dave Bing has sought to underline his status as a man of the people by refusing to move into an official riverside residence, Manoogian Mansion. The luxury residence costs the down-at-heel city about $150,000 a year in maintenance.