General Motors CEO Rick Wagoner announced his resignation early Monday — the latest change for the troubled automaker.
White House and GM sources had told CNN Sunday that Wagoner would resign as part of the federal government’s bailout strategy for the troubled automaker. “On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have,” Wagoner said in a statement posted to the GM Web site. He is being replaced by GM’s president and chief operating officer, Fritz Henderson. Kent Kresa will serve as interim chairman. “Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts. His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM’ers worldwide to succeed,” Wagoner said. Watch report on Rick Wagoner’s resignation » The Obama administration gave General Motors and Chrysler failing grades Monday for their turnaround efforts and promised a sweeping overhaul of the troubled companies. The government plans to give the automakers more money, but it is also holding out the threat of a “structured bankruptcy.”
Sources: GM, Chrysler to get more money; GM CEO to resign
The fate of four GM brands
The federal government will provide operating funds for both automakers for several weeks, during which time the companies will have to undergo significant restructuring, administration officials said late Sunday night. President Obama is expected to make a formal announcement Monday morning about his plans for the companies, which have already been given $17.4 billion. GM will get 60 days and Chrysler 30 days in which to make a final push toward proving they can run viable businesses. If Chrysler succeeds, it will receive a $6 billion loan. In GM’s case, the officials would not specify how much money the carmaker might receive. In the case of both companies, the officials said, stakeholders — and particularly debt holders in both companies — had not done enough to relieve the automakers of ongoing financial burdens.
“We have made very clear that we expect a very, very substantial reduction in liability for both companies,” one official said. The administration held out the possibility of a so-called structured bankruptcy as an option.