Obama stops Wagoner wheels in their tracks
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CEO of General Motors forced to step aside to avoid company ruin.
General Motors’ chief Rick Wagoner has been forced to resign under pressure from US President Barack Obama.
The President threatened to withhold further bailout money to America’s ailing carmaker unless Mr Wagoner vacated the top spot at General Motors. GM’s chief operating officer, Fritz Henderson has assumed the role as CEO in place of Mr Wagoner.
America’s carmaking industry has been struggling for some time, limping along whilst superior competition from Europe and Japan has also suffered, but managed to stay buoyant. GM is on the brink of bankruptcy, and the Obama administration made it clear that the company would receive no further financial help with Wagoner at the helm.
After a meeting with White House officials in Washington last week, Mr Wagoner confirmed: “In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have,” according to The Guardian.
General Motors along with Chrysler have already received a large government bailout in order to continue operations to the tune of $17 billion (£12 billion) and could be set for as much again just to see them through the spring. Detroit’s other bastion of motoring, Ford, has so far managed to resist government assistance in the declining markets.
GM, which is responsible for household names such as Buick, Cadillac, Chevrolet, Opel, Saab and Vauxhall, has managed to avoid filing for bankruptcy, and the negative connotations that would bring to consumer confidence, only through the government’s intervention.
The company is due for a major restructure, not just at the top but all the way down if it is to survive the recession. President Obama said on CBS television yesterday: “We think we can have a successful auto industry. But it’s got to be one that’s realistically designed to weather this storm”.
The Obama mantra “Change is Coming” has arrived at GM, and under his vision, the company will, “emerge at the other end much more lean, mean and competitive than it currently is.”
