AMERICAN MOTORS <AMO> STATEMENT QUALIFIED
American Motors Corp said its auditors
qualified the company's 1986 financial report.
    The report was qualified due to uncertainties surrounding
the previously announced arbitration award against American
Motors' former subsidiary, AM General Corp. The award is being
contested.
    The report was filed today with the Securities and Exchange
Commission along with a copy of Chrysler Corp's <C> proposal to
take over American Motors.
    American Motors said earlier than an arbitration award,
made to Emerson Electric Co <EMR> in February, amounted to 60
mln dlrs plus legal expenses. American Motors has challenged
the award.
    The automaker sold the AM General unit to LTV Corp <QLTV>
in 1983, the same year it was awarded a five-year, 1.2 billion
dlr procurement contract with the military. LTV and AM General
last year sought protection under Chapter 11.
    The arbitration proceeding was called after Emerson
Electric charged AM General violated an agreement covering the
development of certain components in the contract.
    The components were for the military's "High Mobility
Multi-Purpose Wheeled Vehicle" (HMMWV), American Motors said.
    In selling AM General to LTV, American Motors agreed to
indemnify LTV against losses incurred by LTV resulting from the
Emerson Electric claims.
    AMC also said the award has not been confirmed by a court,
and faces additional legal challenges. It said that, because of
the LTV and Am General reorganizations, the final amount of a
confirmed award and the amount of any loss to LTV is uncertain.
 Reuter
