GM President Wagoner resigns...

...does Pelosi quit using her government plane?

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.”

--Robert Ray contributed to this article.

mel_horn wrote: ...does Pelosi quit using her government plane?

No. The Speaker of The House is 2nd in the line of succession to the Presidency. As much as I hated Gingrich, I never suggested he fly commercial..

He's had at least 8 years to get this train back on the tracks. Even Bush was gone by then.

Now's time for the next batter. Hopefully this guy will get the GM train moving again.

What about the rest of the middle management? Until many of those people are changed, it won't get better for GM.

As other folks have suggested: I don't think it would hurt this country a bit if Congress swallowed A LOT of the medicines they are DEMANDING the auto industry to swallow. I also don't understand why they are micro-managing the auto industry, which wants bailouts, but seem totally in the dark about what banks were doing, and will continue to do...if the AIG mess is anything to go by.

Congress, for you complicity in this mess, PLEASE a 1 year pay reduction to the minimum hourly wage. To be paid at the rate for which you occupy the formal Congressional chambers...only.

Bridge loans are not a bailout. GM and Chrysler couldn't secure loans from the banks to complete their normal operations because the banks didn't have the money to loan. So they went to the government. They have to pay this money back with interest. The banks don't.

fiat22turbo wrote: What about the rest of the middle management? Until many of those people are changed, it won't get better for GM.

DING DING DING! WINNAR! Give that man a ten cent see-gar and his choice of prizes from the top shelf!

If you chop the head off of a snake the body keeps twitching and that's how GM is. There's a lot of inertia to overcome and frankly I don't see it happening quickly.

Congress is full of E36 M3 as well, the difference between the AIG and GM bailouts: lots of Congresscritters have AIG etc stock, not so much GM. Which one do you think they are going to pay closer attention to but not screw with?

confuZion3 wrote: Bridge loans are not a bailout. GM and Chrysler couldn't secure loans from the banks to complete their normal operations because the banks didn't have the money to loan. So they went to the government. They have to pay this money back with interest. The banks don't.

Banks have money to loan, but GM is uncreditworthy, or was Wall Street joking when they downgraded GM bonds to junk status a few years ago, meaning that they are not expected to pay back any new loans. So, the idea that GM could afford the "new" debt the government is giving them is laughable, especially in the current market.

Chrysler in the 70's had an amazing turnaround, to be sure, but no one expects the same miracle to happen twice. The car market is in a funk, GM can't jettison its current liabilities and they only have a couple mainstream cars competitive in the market (Malibu and CTS).

GM should have filed for Chapter 11 and Chrysler for Chapter 7 (seriously, they have no high volume cars competitive in the market). Let someone else make something of the pieces. As it stands, alot of people are still being employed to build excess capacity in the car market and while its good for them in the short term, its not sustainable to carry them very long.

Xceler8x wrote: He's had at least 8 years to get this train back on the tracks. Even Bush was gone by then. Now's time for the next batter. Hopefully this guy will get the GM train moving again.

The "next batter" comes from the exact same place Wagoner was from: Financial.

I'm just worried about the precedent this sets. What if I, as a small business owner, takes out an SBA backed small business loan? This precedent says that the Government can not only tell me HOW to run my business, they can tell me WHO will run my business. And until the Government proves they are better at managing money than me, I think that's a real bad idea.

I mean, GM was having money problems, but they never went THIS far into the red:

If the largest stake holder in your company wants a management change..it's gonna happen.

The government is the current largest stakeholder in GM and Chrysler. They're using the influence they/we purchased. Nothing new here guys. It's Wall St. 101.

To argue against that is to argue against the current influence any stockholder has. So which is it? Protect the over paid and inept CEO while stripping any stock holder of the rights they purchased -or- let the CEO deal with the consequences of his lack of leadership while upholding personal property rights like having a say in the company you've invested your hard earned money into?

I'm afraid you can't have it both ways.

Xceler8x wrote: If the largest stake holder in your company wants a management change..it's gonna happen. The government is the current largest stakeholder in GM and Chrysler. They're using the influence they/we purchased. Nothing new here guys. It's Wall St. 101.

Um, no. Unlike the AIG thing, the government did NOT buy into GM or Chrysler. The government isn't a stockholder, it's a coercive, manipulative bond holder (loans). Neither they, nor we, the taxpayers, are shareholders. They are simply loaning money, as though they were a bank.

And just like the bank does not have the right to loan a business money then tell that business who will run it, so does the government not have that right here. And if we GIVE them that right, then it bodes poorly for any and all private business in the US that operate with credit or loans (which is most of it), especially if those loans or that credit is Federally guaranteed (which is most cases).

Chris_V wrote: And just like the bank does not have the right to loan a business money then tell that business who will run it, so does the government not have that right here.

Your statement is true, but your application to the facts at hand is backwards from what's happening here. The gov't isn't saying these changes have to be made because of what they've already lent, but rather saying that unless these changes are made, they won't lend any more money. GM needs the money (badly) so they've got to do whatever it takes to get it.

That doesn't make it any better, and it's still a bad precedent.

I mean, as a small business owner going for an SBA loan, that precedent says "if you need money, we get to tell you how to run your business and who can run it."

Might as well just get used to the gubment telling you what, where, and how to spend your money and run your business. Either you're going to need a handout or they're going to tax you until you do from now on.

Chris_V wrote: That doesn't make it any better, and it's still a bad precedent. I mean, as a small business owner going for an SBA loan, that precedent says "if you need money, we get to tell you how to run your business and who can run it."

I don't have a problem with that precedent; it's as old as the hills. If you want money from somebody else, you take it on their terms. If you don't like their terms, don't take their money. The borrower is servant to the lender. It's true for all borrowers (from working stiffs to Fortune 100 companies) and all lenders (from banks to loan sharks).

Why should it be any different just because the government is involved? You seem to be laboring under the mistaken apprehension that because the government takes money from you with no accountability that the reverse is also applicable.

We can has bankruptcy now?

Osterizer wrote: We can has bankruptcy now?

That which was not an option when they came cap in hand to Washington is now pretty much the only option. Thanks for throwing my tax dollars away Congress.

billy3esq wrote:

Chris_V wrote: That doesn't make it any better, and it's still a bad precedent. I mean, as a small business owner going for an SBA loan, that precedent says "if you need money, we get to tell you how to run your business and who can run it."

I don't have a problem with that precedent; it's as old as the hills. If you want money from somebody else, you take it on their terms. If you don't like their terms, don't take their money. The borrower is servant to the lender. It's true for all borrowers (from working stiffs to Fortune 100 companies) and all lenders (from banks to loan sharks). Why should it be any different just because the government is involved? You seem to be laboring under the mistaken apprehension that because the government takes money from you with no accountability that the reverse is also applicable.

The government running private business is a bad idea. PERIOD.

The BANK doesn't run your effin' business OR TELL YOU WHO CAN RUN IT if you get a loan from them, so the government should not. What part of this is flying over your head, comrade?

I was under the impression that investors had some say in the way businesses were run. Are we not all investors of the auto-bailouts?

I mean, at this point, GM isn't really private anymore...when they are living (and wasting) goverment funds...the become more and more public.

Banks don't care what you do with your money because they know in the end they can take everything from you. Do we still have debters prison?

GM managers don't have anything to lose, except for their jobs...and that seems like a worthwhile trade. We could always throw Wagner in jail?

Investors do have a say in how businesses are run. We didn't invest (buy shares) of GM, We loaned them money. The problem is so few people understand the difference between loans, investments and anything else involving money. That is how we got here in the first place.

Chris_V wrote: The government running private business is a bad idea. PERIOD. The BANK doesn't run your effin' business OR TELL YOU WHO CAN RUN IT if you get a loan from them, so the government should not. What part of this is flying over your head, comrade?

Billy3Esq has a point.

Banks dictate terms for a loan all the time. Don't like the terms? Don't take the money. It's simple.

You've got your socialism mixed up in your economics.

Lenders dictate terms because they are the ones with the money. Same as my statement above. The guy with the money has the power. The borrower is at his mercy. Sorry you don't like it but the world is a tough place.

btw - Now I'm going to flounder you all to pieces. Socialism is all around you. Don't get upset about it because talk radio is filling your head with doomsday prophecies.

Examples of modern Socialism:

~Road construction

~Any publicly funded school (this includes state colleges as well as secondary and elementary)

~Libraries

~Police/Fire Departments

~Any branch of the Military

~State run Hospitals

Now, is socialism all bad? I know I don't want to get rid of all the things I listed above.

EDIT: after further reflection I think I see the disconnect. No one is arguing that the government trying to run a company is a good idea. It's not. It's the bad option out of a set of bad alternatives. But let's be honest with ourselves as well. Wagoner hasn't been a good leader. He should go. The government stepped in and made it happen. If GM had a leader who was doing a good job of leading, and the government made him step down, I would singing a different song.

There are some things the gov't has to do because it would be impractical for private industry. My problem with the gov't getting too involved with business is that they are bad at it. We get people that never had a job in private industry, and have no idea what profit and productivity are. Instead the make up some important sounding goals that often run counter to common sense and then hold people accountable to their nonsense. The few time I have been writen up, I was doing what was right for the customer, but it makes my supervisor's performance numbers look bad. Even though you would think a bus company would focus on gettting people where they are going, our main concern is that all our scheduled trips are made, and if they happen to be with empty buses so be it.

Xceler8x wrote: Examples of modern Socialism: ~Road construction ~Any publicly funded school (this includes state colleges as well as secondary and elementary) ~Libraries ~Police/Fire Departments ~Any branch of the Military ~State run Hospitals Now, is socialism all bad? I know I don't want to get rid of all the things I listed above.

And is not everyone of those things ROYALLY screwed up in it's operation?

Xceler8x wrote:

Chris_V wrote: The government running private business is a bad idea. PERIOD. The BANK doesn't run your effin' business OR TELL YOU WHO CAN RUN IT if you get a loan from them, so the government should not. What part of this is flying over your head, comrade?

Billy3Esq has a point. Banks dictate terms for a loan all the time. Don't like the terms? Don't take the money. It's simple.

They dictate terms of the loan, like payment, etc. they can refuse to loan for certain business types, true. They don't dictate how to run your business or WHO CAN RUN IT! Never have I had a loan, business or otherwise, where the bank did that.

Di you ever get a business loan and have the bank say, you can have the money but you can't run or be involved with the business? I sincerely doubt it. If I get a loan for a graphic design business, for example, no bank is going to tell me, "well, we'll give you the money, but you can only use recycled paper and ink, and you can only create designs WE agree with, whether the clients want them or not. And you can only hire these people. And you have to not be involved in teh company. And you can only make so much money yourself: anything over that, we get back."

Lenders dictate terms because they are the ones with the money. Same as my statement above. The guy with the money has the power. The borrower is at his mercy. Sorry you don't like it but the world is a tough place.

And I reiterate my last statement. Banks do not dictate how a business is run or who runs it. Venture capitalists do that, becasue they personally invest in the company and become owners. Banks do NOT.

~Any branch of the Military

Having a military is not socialism. And that's one of the few areas that the federal government SHOULD be in charge of.

Few of the things you listed are run very well. And only the bigger libraries (like the Enoch Pratt Free Library system here in MD, which was a private foundation that still gets quite a bit of it's money from private donations, and is really not part of the government) seem to be run well. And even then, that's really not an example of socialism. A service being part of the government does not make it socialist, otherwise simply having a government would be socialist.

No, socialist is having the government run private industry, and socialist is wealth redistribution.

Osterizer wrote:

Xceler8x wrote: Examples of modern Socialism: ~Road construction ~Any publicly funded school (this includes state colleges as well as secondary and elementary) ~Libraries ~Police/Fire Departments ~Any branch of the Military ~State run Hospitals Now, is socialism all bad? I know I don't want to get rid of all the things I listed above.

And is not everyone of those things ROYALLY screwed up in it's operation?

i dunno I personally know the fire chief in North Charleston SC. he'd argue that he does a pretty damn good job.