Monday, March 30, 2009

GM chief Wagoner ousted by Obama


The chief executive of struggling US car company General Motors has been ordered to step down by US President Barack Obama.

Rick Wagoner will leave immediately, a government official confirmed.

Mr Obama is preparing to outline terms for offering more help to GM and fellow car giant Chrysler.

The two firms have already received $17.4bn (£14.4bn) in bail-outs. Chrysler has requested a further $5bn while GM says it needs $16.7bn more.

Plans rejected

Reports have suggested that a frustrated Mr Obama will reject GM and Chrysler's turnaround plans as unrealistic, raising the risk of the carmakers' bankruptcy.

The auto task force appointed by Mr Obama released two reports on Monday on the financial health of both carmakers, saying that Chrysler was "not viable" in its current form.

It demanded a merger with Italy's Fiat or another carmaker if Chrysler was to survive and said the Obama administration would only provide the company working capital for the next 30 days.

It also said that it would pledge to fund GM's operations for the next 60 days only, requiring the carmaker to come up with another plan detailing further restructuring.

"While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start," the task force said.

"Their best chance at success may well require utilising the bankruptcy code in a quick and surgical way."

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