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post #1 of 1 (permalink) Old 03-30-2009, 01:50 PM Thread Starter

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Post Wagoner of GM gets booted

General Motors Corp. Chairman and Chief Executive Officer Rick Wagoner is stepping down after being asked by the Obama administration to relinquish his position at the helm of the largest American automaker, people familiar with the situation said Sunday.

Wagoner’s departure comes on the eve of President Barack Obama’s scheduled presentation of his strategy for the U.S. auto industry. The president has said he wants to help the struggling industry and is providing fresh short-term aid but faces mounting opposition to bailouts of businesses and industries.

GM did not confirm the news or comment on who might succeed Wagoner, 56, a GM lifer who became the company’s chief executive in 2000 and chairman in 2003.

But Obama told four Michigan members of Congress on a conference call Sunday that GM President and Chief Operating Officer Frederick Henderson would run the company for the time being, according to a source familiar with the situation. Henderson has been carrying out the company’s restructuring on a day-to-day basis and knows the task force leaders.

Industry experts credit Wagoner with pushing through profound reforms at the 100-year-old automaker, but his critics say Wagoner moved too slowly.

After losing $82 billion since 2004, GM is now subsisting on federal loans as it struggles to survive one of the most perilous stretches in its history.

The company has received $13.4 billion from the government and is seeking up to $16.6 billion more. According to a source familiar with the matter, Obama will provide GM with an unspecified amount of working capital over the next 60 days.

An Obama administration official said Sunday that the White House asked Wagoner to resign and he had agreed.

Most industry insiders were not entirely surprised, given the political mood.

“From the government’s perspective, they had to show a visible form of sacrifice,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor and the son of a former GM president.

Obama said earlier on Sunday he believed Detroit’s automakers could become competitive. “We think we can have a successful U.S. auto industry,” he said on CBS’s news show “Face the Nation.”

“But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean and mean and competitive than it currently is. And that’s going to mean a set of sacrifices from all parties —- management, labor, shareholders, creditors, suppliers, dealers,” Obama said.

He acknowledged that the automakers had taken measures to address “longstanding problems in the auto industry and the current crisis, which has seen the market for new cars drop from 14 million to 9 million.”

“Everybody’s having problems, even Toyota and other very profitable companies,” he said.

According to a source familiar with the situation, Obama told the Michigan lawmakers that no management changes were forthcoming at Chrysler. Chairman and Chief Executive Robert Nardelli has been in the job less than two years.

The administration also will provide working capital for Chrysler over the next 30 days as it moves to conclude an alliance with Italy’s Fiat SpA, a person familiar with the call to lawmakers said.

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