Legal Commentary

White House Asks GM Chief to Step Aside

By Jeralyn

President Obama will unveil his plan to help the auto industry tomorrow. And General Motors chairman and chief executive G. Richard Wagone is resigning at his request.

Wagoner's resignation was one of the White House conditions for more federal aid. "He agreed and will do that," a senior administration official said Sunday evening.

Wagoner, 56, joined the company in 1977 and has been chairman and chief executive since 2003.

In related news, Chrysler may have to merge with Spanish-owned Fiat. A structured bankruptcy may be in the future for both Chrysler and GM. [More...]

Chrysler LLC has failed make its case to the federal government that it can be viable as a stand-alone company, and may have to resort to restructuring through bankruptcy court, the Obama administration's auto industry task force concluded in a memo released late Sunday.

The best chance for Chrysler and General Motors Corp. to recover "may well require utilizing the bankruptcy code in a quick and surgical way," the task force wrote in a memo summarizing its findings on the two auto makers. A "structured bankruptcy," the panel added, "would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success."

In two years, will everyone be driving cars made by Lexus, Mercedes, Audi/Volkswagon, Hyundai, Nissan, Kia and Honda?

Another question: Does this news mean the stock market will tank again Monday?

Full post as published by TalkLeft on March 30, 2009 (boomark / email).