President Barack Obama was due to unveil today his plan for troubled US car companies as he stepped up pressure on the industry by forcing General Motors head Rick Wagoner to resign.
GM confirmed Mr Wagoner's immediate resignation early yesterday and said he would be replaced by the company's current president and chief operating officer, Fritz Henderson.
In a tough review which could shake up the nation's key car industry, the White House said yesterday General Motors and Chrysler had failed to lay out viable plans for their ailing companies.
In two separate reports, a taskforce set up by Mr Obama analysed the future prospects for both companies and warned they had failed to comply with the terms of a $US17.4billion ($A25.29billion) Government bail-out.
In a message on General Motors' website, Mr Wagoner said that on Friday he was in Washington for a meeting with Obama Administration officials, and they requested that he ''step aside'' as chief executive officer.
GM chairman Kent Kresa said the company's restructuring would likely cause a significant change in the stockholders, and the board intended to nominate a new slate of directors for its next annual meeting.
Mr Wagoner's resignation comes as General Motors and Chrysler are teetering on the edge of bankruptcy and seeking another $A31.4billion in government loans.
The Administration official said, however, that Mr Wagoner's departure was not a ''quid pro quo'' for receipt of a fresh infusion of federal funds.
As Mr Obama prepared to announce his new plan overnight, he made it clear he felt GM and Chrysler had not yet done enough to restructure their companies and earn billions more bail-out dollars.
''They're not there yet,'' Mr Obama said at the weekend. ''We think we 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.''
An Obama taskforce has been working to resolve the woes of the car industry, a key pillar of the US economy that has been hit hard by plunging global cars sales amid the economic downturn. Ford, the other member of Detroit's big three, has said it has enough cash to survive the downturn without government aid.
GM and Chrysler must come up with viability plans to show the path to profitability, requiring deeper job cuts, new deals with unions to slash costs and acceptance by bondholders of a plan to cut debt.
Mr Obama said, ''There's been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen ... the market for new cars drop from 14 million to nine million.''
He said that to ride out the crisis there had to be sacrifices from all parties management, labour, shareholders, creditors, suppliers and dealers. ''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 ....'' AFP