WASHINGTON (Bloomberg) - General Motors Corp. (GM) fell as much as 18 percent after a Credit Suisse Group AG analyst said stockholders may be 'wiped out' by the restructuring needed to win a US bailout and cut his rating to 'underperform'.

The 12-month price target on GM, the largest US automaker, was cut in half to $1 today by Christopher Ceraso, a Credit Suisse analyst in New York. Mr. Ceraso previously rated GM shares 'neutral'.

Mr. Ceraso's report comes three days after President George W Bush's announcement that Detroit-based GM and Chrysler LLC will get $13.4 billion in emergency loans in exchange for substantially reshuffling their businesses. GM has said that it will pare brands and payrolls as part of efforts to reduce debt.

"Over the next two months, as bondholders, union representatives and company management meet to hammer out concessions, we think it will become increasingly clear that the enormous sacrifice of value on the part of the union and bondholders will require the complete or near-complete elimination of the existing GM equity," Mr. Ceraso wrote.

The company may still end up in bankruptcy should debtholders and labour groups fail to reach agreement, Mr. Ceraso said.

Additionally, the US government will claim as much as 20 percent of GM's equity value in exchange for the loans, he said.

GM fell 81 cents to $3.68 at 2.35pm in New York Stock Exchange composite trading. The stock lost 82 percent this year before yesterday.

Itay Michaeli, an analyst at Citigroup Global Markets Inc., widened his full-year loss estimate for GM to $29.09 a share from $28.92. GM will post losses of $26.46 a share next year and $7.63 in 2010, down from earlier estimates of a $15.22 deficit and a three-cent profit, respectively, Mr. Michaeli said in a note to clients. He has a 'sell' rating on the shares.

CEO Rick Wagoner said after Bush announced the aid plan that GM's two biggest challenges in reshaping its operations would be arranging a debt-for-equity swap with debtholders and reworking union agreements.

The Wall Street Journal reported yesterday that GM is planning formal talks with the United Auto Workers (UAW), bondholders and President-elect Barack Obama's administration in January.

Tony Cervone, spokesman for GM, and the UAW's Roger Kerson did not immediately return calls seeking comment.

Canadian union autoworkers are not feeling pressure to cut wages for GM, Ford Motor Co. and Chrysler after federal and provincial governments there promised a combined C$4 billion ($3.3 billion) in aid, Canadian Auto Workers President Ken Lewenza said in a Bloomberg Television interview yesterday.