The Obama administration has forced the longtime head of General Motors to resign and said yesterday that it would withhold additional federal aid to the auto industry unless the ailing companies undertake changes they so far have been unwilling or unable to make.
The administration effectively rejected as untenable the business plans that GM and Chrysler had submitted to restructure their companies, saying that neither had fulfilled the terms of the federal loans the companies received in December.
The president is expected to announce today that both companies may still win additional federal aid but under stricter terms.
And the Times;
The Obama administration has determined that neither Chrysler LLC nor General Motors Corp. can survive without dramatic changes in their businesses, and given them only weeks to completely restructure on a fast schedule that could involve a quick “dip” into bankruptcy, senior administration officials said Sunday.
The restructuring began right away Sunday, the eve of Mr. Obama’s public layout of his plan for the U.S. auto industry, with the White House asking longtime GM Chief Executive Officer Rick Wagoner to step down and be replaced by Fritz Henderson, GM’s current chief operating officer.
While Mr. Obama’s team has judged that GM could become viable with major sacrifices, it decided that Chrysler cannot survive as a stand-alone company, a senior administration official said.
And the Administration arrived at these decisions how? From the same people who’ve brought us the US Postal Service – arguably a business run by the government that is currently hemorrhaging cash? How many people in the administration have even a modicum of experience running a car company? How many union bosses are they going to force from their positions for corruption and poor judgement?
I’ll tell ya, if you weren’t worried about this administration before, ya hafta be worried now.