General Motors CEO Ordered Out by US President Obama

Rick Wagoner will leave immediately, a government official confirmed. Photo by BGNES

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

Rick Wagoner will leave immediately, a government official confirmed, cited by the BBC.

Obama is preparing to outline terms for offering more help to GM and fellow car giant, Chrysler. The two firms have already received USD 17.4 B in bail-outs. Chrysler has requested a further USD 5 B while GM says it needs USD 16.7 B more.

The auto task force appointed by 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.

GM plans to axe 47 000 jobs and Chrysler 3 000, as well as shedding a number of car models.

The job cuts would take place by the end of 2009 and are the largest work-force reduction announced by a US firm in the current crisis.

 

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