Yesterday, GM’s chief executive Rick Wagoner has announced that he will resign his position at the company, at the White House’s request. But that’s not all, because the Obama administration has also announced that GM and Chrysler won’t be getting any more bailout money and told them to come up with new plans or risk insolvency.
Wagoner, which has been GM’s top executive since 2000, said: “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.” His position will be taken by Fritz Henderson, 50, which has been with GM since 1984, and held the positions of head of GM Europe and then the company’s chief financial officer until today. And that’s not the only change at the top, because it looks like a lot more executive are scheduled to be replaced from their positions in the future.
According to Financial Times, this decision most likely means that GM would file for bankruptcy protection sometime in the next few weeks. And that’s not all, because, as we said before, the White House refused to give more money to GM, who already received $13.4 billion in government aid. And because the company failed to meet targets on cutting debt and reducing the cost of benefits paid to workers, today it was given 60 days to reach agreement with debtholders and unions, with new tougher targets for cost cutting, or they would lose their last chance for a government bailout, almost certainly sending them into bankruptcy.
Source: Financial Times