GM CEO forced to step down

[Josh42]

WASHINGTON - The White House forced the head of GM to step down Sunday - and President Obama ordered Detroit to go back to the drawing board if it wants more government cash.

 

Obama rejected turnaround plans submitted by General Motors and Chrysler and warned the troubled companies to come up with more dramatic moves to ensure a return to profitability.

 

General Motors Chief Executive Rick Wagoner, widely accused of moving too slowly, was canned amid government demands to retool the embattled automaker.

 

"We asked him to step down and he agreed," a senior administration official told the Daily News.

 

Wagoner, who ran GM for eight tumultuous years, last year earned the ire of the American people when he and other Detroit honchos flew to Washington on private planes to plead for a taxpayer-funded bailout.

 

GM board member Kent Kresa will serve as interim chairman and current President Fritz Henderson will serve as CEO, administration officials announced late Sunday night.

 

The White House gave GM two months and Chrysler one month to come up with new plans. Chrysler is also working on a merger plan with Italian auto giant Fiat.

 

They'll get more cash to get them over the hump, but the White House told the two members of the Big Three U.S. automakers to clean up their act fast.

 

"They're not quite there yet," Obama told CBS' "Face the Nation."

 

"There's been some serious efforts to deal with a combination of longstanding problems in the auto industry and the current crisis, which has seen, you know, the market for new cars drop from 14 million to 9 million," he said.

 

The ouster of iconic GM's CEO is one of the most dramatic signs yet of how strong a role the government is now playing in the private sector.

 

Chrysler and GM already have been handed $17.4 billion in federal government loans.

 

GM is asking for another $16.6 billion, while Chrysler wants an additional $5 billion. So far, Ford has not asked for handouts from Washington.

 

Treasury Secretary Timothy Geithner, appearing on ABC's "This Week," admitted, "We're prepared as a government to help that process if we believe it's going to provide the basis for a stronger industry in the future that's not going to rely on government support."

 

Pushing out the unpopular Wagoner makes it easier for the administration to hand over more cash to the ailing auto giant, another administration source indicated.

 

Obama is laying down tougher prerequisites for Detroit than his administration has demanded of Wall Street, which has not had to provide restructuring plans to get the billions of taxpayer dollars.

 

Obama insisted he gave the nation's top bankers a wakeup call that they need to clean up their act when he met with them Friday.

 

"It's very difficult for me as President to call on the American people to make sacrifices to help shore up the financial system if there's no sense of mutual obligation and mutual help," Obama said.

 

Insiders have acknowledged that Obama won't let the automakers go under for a variety of reasons, including protecting 140,000 mostly unionized workers and their pension plans.

 

http://www.nydailynews.com/money/2009/03/29/2009-03-29_president_obama_forces_gm_boss_rick_wago.html

[Black Rose]

Byebye Rick