30 Mar 2009

GM boss to step down at White House request

3:50 pm on 30 March 2009

General Motors chairman and chief executive Rick Wagoner will step down immediately at the request of the White House.

The news comes as United States president Barack Obama prepares to unveil additional restructuring efforts designed to save the domestic vehicle industry.

Mr Obama is expected to announce on Monday plans to restructure General Motors and Chrysler in exchange for additional government loans.

The companies have been living on $US17.4 billion in government aid and have requested $US21.6 billion more.

General Motors has lost more than $US80 billion since 2005.

Mr Wagoner, 56, joined the company in 1977, serving in several capacities in the US, Brazil and Europe. He has been chairman and chief executive since May 2003.

Mr Obama said on Sunday that General Motors and Chrysler and all those with a stake in their survival needed to take more hard steps to help the struggling automakers restructure for the future.

In an interview with CBS' Face the Nation he said the companies must do more to receive additional financial aid from the government.

Big job losses

General Motors plans to axe 47,000 jobs and Chrysler 3,000, as well as shedding a number of car models.

The job cuts would take place by the end of 2009 and are the largest work-force reduction announced by a US firm in the current downturn.

The news comes as France's biggest car maker, Peugeot Citroen, sacked its chairman, Christian Streiff, citing "extraordinary difficulties" in the automotive industry.

In December, General Motors had said it would cut the number of plants from 47 in 2008 to 38 by 2012, but now plans to close a further five factories, which would leave it with 33 facilities.

General Motors and Chrysler received their first bail-outs at the end of last year, warning that without the support they risked financial ruin.

Ford, the third of the "Big Three" American car makers, has yet to require any bailouts, but says it may need funds in the future.

General Motors, Ford and Chrysler have all seen sales fall sharply in the domestic market.