Officials: Auto bailout plan forces out General Motors' CEO
DETROIT -- One of the conditions was the resignation of GM CEO Rick Wagoner. The White House asked Wagoner to quit and he agreed, according to administration officials who asked not to be named to avoid pre-empting the news conference Monday.
GM and Chrysler are operating on a combined $17.4 billion in government loans approved by the Bush administration in December. They had until March 31 to prove they were viable to qualify for more loans. The two automakers have asked for another $21.6 billion.
Though they'll get more time, the administration has not ruled out a controlled bankruptcy for either one.
While they're working on improving their plans, the two car companies will receive just enough money to keep operations going.
Chrysler, which the task force does not believe can stand alone, has 30 days to work out its proposed partnership with Fiat or find a new partner. It could get an additional $6 billion to make the Fiat deal work, but it then would require them to build new engines and cars in the U.S. and to pay back taxpayers before Fiat could increase its initial 35% stake.
GM has 60 days to force greater concessions out of its debt holders and other parties and to find new ways to deal with its shrinking market share.
To help preserve the companies' sales, the administration has a plan to backstop warranties for buyers.
It will provide an independent assurance that GM and Chrysler vehicles will be fixed under warranty, regardless of the companies' finances.
The ouster of Wagoner is intended to give GM a fresh start. Fritz Henderson, GM's chief operating officer, will step in as acting CEO, and board member Kent Kresa will be chairman.
The task force determination that the companies' plans won't make them viable technically violates the terms of their first loans, meaning the government could ask to be repaid immediately.
Related Stories
ABC News Live