GM CEO resigns, effective immediately. I wonder how GM will open up on Monday morning? Any thoughts? I would imagine there could be a huge rally upon announcement of the replacement CEO.
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said. The White House confirmed Wagoner was leaving at the government’s behest after The Associated Press reported his immediate departure, without giving a reason. On Monday, President Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. Industry sources had said the White House planned very tough medicine, which turned out to be an understatement. And it went to the very top. The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, retirees and the communities where plants are located, the sources said. GM and Chrysler have to prove their viability as a condition of a federal bailout released under former President George W. Bush, and both have asked the current administration for more money. Obama said Friday in an interview with CBS’s “Face the Nation,” broadcast Sunday, that the carmakers were going to have to do more. “There’s been some serious efforts to deal with a combination of long-standing problems in the auto industry,” the president told host Bob Schieffer. “What we’re trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry. 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. “And that’s gonna mean a set of sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody’s gonna have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road. Schieffer followed up: “But they’re not there yet.” Obama added: “They’re not there yet.” The Obama administration calls its task force “a cabinet-level group that includes the secretaries of Transportation, Commerce, Labor and Energy. It will also include the chairman of the President’s Council of Economic Advisers, the director of the Office of Management and Budget, the EPA administrator, and the director of the White House Office of Energy and Climate Change. The Task Force will be led by Treasury Secretary [Tim] Geithner and [National Economic Council] Director Larry Summers.” The panel’s chief adviser is Steven Rattner, a well-known investment banker and former New York Times reporter. Obama’s move against Wagoner hearkens back to September 2008 when President Bush’s Treasury Secretary, Hank Paulson, insisted that AIG CEO Robert Willumstad step down as part of an $85 billion bailout of the insurance giant. Paulson installed in his place Edward Liddy, a former Allstate executive. The AIG bailout has since grown to about $170 billion and Liddy has faced calls for his resignation in the wake of reports about hundreds of millions of dollars-worth of bonuses the firm agreed to pay to employees.
GM CEO resigns at Obama’s behest – Mike Allen and Josh Gerstein – POLITICO.com