Obama calls for GM chief to step down

Rick Wagoner, chief executive of US beleaguered car giant, General Motors (GM), has been ordered to resign by US President Barack Obama.

56-year-old Wagoner has been at the helm of GM for eight years but has been with the company since leaving Harvard University with an MBA more than 30 years ago. He received the order in return for further Government support to prevent the carmaker from going bankrupt.

Since Wagoner has led the car firm, its stock has fallen from more than $80 to just $3.62. The chief executive has so far resisted filing for bankruptcy protection stating that this would destroy what confidence was left among GM’s car dealers and consumers.

Meanwhile, the Obama administration is currently drawing up plans to provide more financial assistance to GM and fellow car giant, Chrysler.

So far, the two car giants have received total bailouts of $17.4 billion (£14.4 billion) but both firms are requesting further aid to help keep them afloat.

Chrysler is asking for a further $5 billion, while GM is requesting a further $16.7 billion but the plans have met with criticism from the US President, who branded the plans as “unrealistic“, raising concerns about the two carmaker‘s future.

In an interview with CBS, the US broadcaster, President Obama said “the firms must do more to justify further aid“.

Both companies recently announced plans to reduce headcount significantly since the global economic downturn has resulted in a slump in demand for big-ticket items, such as cars. This has affected carmakers worldwide with many cutting back on production and slashing jobs.

GM and Chrysler employ around 140,000 workers in the US.

In the meantime, Ford which is the third of the top three US carmakers, has not yet received any financial assistance but said it may require funds in the future.

It is understood that Fritz Henderson, the GM president and chief operating officer, is to replace Mr Wagoner.

The news of Wagoner’s resignation comes as Peugeot Citroen sacked its chairman Christian Streiff. France’s largest carmaker blamed “extraordinary difficulties” in the industry for the dismissal.

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