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GM CEO Wagoner to Step Down; Obama to Unveil Auto Plan

General Motors (GM: 3.62, 0.23, 6.78%) CEO Rick Wagoner is stepping down immediately, auto industry and White House sources told FOX Business on Sunday.

GM declined to comment on the report.

A White House official told FOX Business that Wagoner was asked by the Administration to step down as a precondition for the company to continue to get help with its restructuring.

"This does not surprise me... Rick has seen good and bad times and it seems that a fresh face is needed,” said Mike Green, president of United Auto Workers Local 652 in Lansing, Mich. "There are a lot of smart, capable people inside GM and this will not muck up anything moving forward."

Wagoner, 56 years old, began his GM career as an analyst in the company's Treasurer's Office in New York in 1977. He had been CEO of the auto maker since 2000.

News of Wagoner’s departure comes as the Obama Administration prepares to brief some people on Capitol Hill about its plans for the auto industry on Sunday evening, in advance of a formal announcement on Monday.

The plans will come from a task force put together by President Obama to figure out what the long-term plans for the auto industry should be, after GM received $13.4 billion and Chrysler, which is owned by private-equity firm Cerberus Capital Management, received $4 billion in bridge loans amid one of the worst downturns the auto industry has ever experienced.

GM in particular has been hemorrhaging cash, losing $9.6 billion in the fourth quarter of 2008 alone.

"We think we can have a successful U.S. auto industry," President Obama said on CBS's "Face the Nation" on Sunday. "But it's got to be one that's realistically designed to weather this storm and to emerge… much more lean, mean and competitive than it currently is."

Ford Motor (F: 2.8399, -0.0801, -2.74%), the other major U.S. auto maker, has thus far not needed bridge loans -- though it had initially left the door open to receiving them.

A source told FOX Business that the Obama Administration is likely to set a hard deadline for GM and Chrysler to meet their restructuring goals, which include getting bondholders and the United Auto Workers union to agree to major concessions. If they don’t meet those goals by the deadline, the source said, the auto makers would likely be allowed to enter into bankruptcy protection.

It’s possible the government would expand the bridge loans to allow the auto makers to survive through the new deadline.

Earlier this month, the Administration set up a plan for auto suppliers that basically serves as an insurance plan that, for a fee, guarantees payment for shipments to the auto makers. That plan could help keep suppliers shipping to the auto makers, even if bankruptcy looks likely.

“We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry,” GM said in a statement. “We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement.”
Since when can a sitting President tell a publicly traded company who can run that company? Isn't that up to the shareholders? I have a feeling Obama won't tell UAW chief Gettelfinger to step down, though. He, his current and retired employees have put GM in the position they are now. I wonder if this "bailout" money will just go straight to this?