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CEO of GM steps down following suggestions from Obama

Monday, March 30th 2009 - 15:01 UTC
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Former GM CEO Rick Wagoner Former GM CEO Rick Wagoner

The chief executive of struggling US car company General Motors, Rick Wagoner, has agreed to step down. He will leave his post immediately at the request of the White House, a government official confirmed.

The news comes as President Barack Obama prepares to announce plans to help GM and fellow car giant, Chrysler. The two firms have already received 17.4 billion US dollars in bail-outs. Chrysler has requested a further 5 billion while GM says it needs 16.7 billion more.

In an interview with US broadcaster CBS, President Obama said the firms must do more to justify further aid, saying “they're not there yet”.

“We think we can have a successful US auto industry,” the president said.

“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, mean, and competitive than it currently is.”

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 by a US firm in the current downturn. Mr Wagoner, 56, has headed GM for almost six years, after first joining the company in 1977.

The news comes as France's biggest car maker, Peugeot Citroen, sacked its chairman Christian Streiff, citing “extraordinary difficulties” in the automotive industry.

In December, GM had said it would cut the number of plants from 47 in 2008 to 38 by 2012, but now plans to close a further five factories, which would leave it with 33 facilities.

The carmaker's brands would also be reduced from eight to four, Chevrolet, Buick, Cadillac and GMC.

GM and Chrysler received their first bail-outs at the end of last year, warning that without the support they risked financial ruin. Ford, the third of the “Big Three” US car makers, has yet to require any bailouts, but says it may need funds in the future.

GM, Ford and Chrysler have all seen sales fall sharply in their home market.

Fritz Henderson named new GM President

Frederick “Fritz” Henderson (49) has been named the new GM CEO. Prior his new role, he was vice chairman and chief financial officer for the General. And as such, he helped negotiate the recent ground-breaking contract with the UAW, engineered the sale of a 51 percent stake in GM's finance arm to Cerberus and was one of the architects of the corporation's historic $39 billion write-down.

Categories: Economy, Politics, United States.

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