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GM boss to step down: Report
Monday, 30 March 2009, 14:24 IST
Washington: Rick Wagoner will resign as head of General Motors Corp (GM) under an agreement with the government to continue bailing out the struggling carmaker, the Detroit Free Press reported.
Wagoner's decision comes ahead of a major announcement Monday by President Barack Obama on the future of the US car industry, which has seen sales plummet more than 35 percent amid the country's worst recession in decades.
Obama is expected to lay out the terms for continued government support of GM and Chrysler LLC. GM has already received $13.5 billion and Chrysler $4 billion in emergency loans.
Wagoner, who has served as chief executive of GM since 2000, has agreed to leave under the terms of the deal with the government, the Free Press reported Sunday, citing an unnamed GM official.
A spokesperson for GM would not comment on the reports. A statement by the company said it would be "not be appropriate for us to speculate" on the details of Obama's announcement Monday.
Wagoner, 56, has had a tumultuous time at GM. The company has lost more than $80 billion in the last four years as Asian competitors steadily made inroads into the once-dominant US car industry. GM last year lost its title as world's largest carmaker to Japan's Toyota Motor Corp.
Earlier Sunday, Obama said GM and Chrysler have failed to reach the restructuring goals they had pledged to make by Tuesday and must do more to receive added government bail-out money.
"They're not there yet," Obama told the CBS Sunday morning show, Face the Nation.
After the $17.4 billion in bail-outs granted the two companies under former president George W. Bush's administration, additional money is dependent on the two companies reaching definite goals by the coming week on the way to becoming financially viable.
GM, the country's largest carmaker, and Chrysler, the third largest, have said they could need more than $20 billion in additional aid. Ford Motor Co, the country's second largest producer, has not taken any bail-out money.
Although Obama has said he hopes bankruptcy proceedings can be avoided, he has not ruled it out as a possibility.
"Everybody's going to 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," Obama said.
While much of the US industry's woes have been blamed on a failure to adapt to a changing market, Obama noted that the US market for new cars has dropped from about 14 million to nine million in 2008 as consumer demand tumbled across the country.
"Everybody is having problems, even Toyota and other very profitable companies," the president said. Toyota posted its first-ever annual loss in 2008, largely on plummeting US sales.
Obama was optimistic that the country can have a "successful US 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," he said.
Obama said everyone must be willing to sacrifice, including management, labour, shareholders, creditors, suppliers and dealers.
Source: IANS
Source: IANS