GM CEO resigns at Obama’s behest

WASHINGTON - The Obama administration has asked Rick Wagoner, the chairman and CEO of General Motors, to step down, but has refused to reveal why this decision was taken.

General Motors issued a vague statement Sunday night that did not officially confirm Wagoner’s departure.

“We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. 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,” Politico quoted the company, as saying.

The surprise announcement about the classically iconic American corporation is perhaps the most vivid sign yet of the tectonic change in the relationship between business and government in this era of subsidies and bailouts.

Wagoner has been CEO for eight years and at GM for more than 30 years. It is not yet clear who would replace him, or what role the administration would play in that process.

Industry sources had said the White House planned very tough medicine in Monday’s announcement, which turned out to be an understatement.

The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, bondholders, shareholders, retirees and the communities where plants are located, the sources said.

Earlier this month, President Obama agreed to loan five billion dollars to American auto parts manufacturers to help them weather the steep drop in new vehicle orders and the financial uncertainty at the Big Three.

Obama and his aides may have honed in on Wagoner for two reasons.

First, his company is asking for the most in total federal aid: 26 billion dollars, a figure administration officials fear could grow even larger. Second, the GM chief was tied more directly to the ill-fated decisions that that brought much of the American auto industry to the brink of collapse.

Wagoner joined GM in 1977, has had a senior role in GM management since 1992, and became CEO of the company in 2000. He is considered responsible for increasing GM’s focus on trucks and SUVs-at the expense of the hybrids and fuel efficient cars that have become more popular in the last couple of years. (ANI)