Task Force Nixes Plans; Wagoner Gets the Boot
The government committee tasked with restarting the auto industry has issued its ultimatums: Chrysler has 30 days and $6 billion to finalize an alliance with Fiat, and GM has 60 days and an undisclosed “interim financing” to rework its restructuring plan. Should the companies fail to meet their deadlines, they could face bankruptcy.
The task force put the kibosh on GM’s request for another $16.6 billion, and forced the resignation of GM CEO Rick Wagoner. The majority of the GM board is expected to step down, as well. COO Fritz Henderson will replace Wagoner. Also, the government intends to send a team to Detroit to help with the restructuring.
It seems reality is finally setting in. Just two weeks ago, task force chief Steven Rattner said that bankruptcy was not a “desirable outcome.” Now it seems to be the most likely solution.
