General Motors chief forced out by Obama

General Motors Corp chairman and chief executive officer Rick Wagoner will step down immediately at the request of the White House, and new directors will make up the majority of GM’s board in a major management shake-up of the US’s largest carmaker, GM confirmed today.

The sweeping changes come just hours before President Barack Obama plans to unveil additional restructuring efforts designed to save GM and perhaps its Detroit-area competitor, Chrysler LLC, both of which are living on $17.4bn (€13.16bn) in government loans and have requested $21.6bn (€16.33bn) more.

GM president and chief operating officer Fritz Henderson will take over as chief executive officer, the company said in a statement released just after midnight.

Board member Kent Kresa, a former chairman and chief executive officer of Northrop Grumman Corp, was named interim chairman.

He said the board has known for some time that restructuring would bring a change in stockholders and create a need for new directors with additional skills.

The directors who will be replaced have not been determined, but the change will take place at the company’s annual meeting in Detroit in August, Mr Kresa said in a written statement.

Two people familiar with Mr Obama’s plan said yesterday that the administration would give GM enough aid to restructure over the next 60 days, while Chrysler will get up to $6bn (€4.53bn) and 30 days to complete an alliance with Italian carmaker Fiat SpA.

The administration, the people said, found that neither company could be viable under restructuring plans submitted to the government, so more steps would be required.

Despite finding that Chrysler could not survive without a partner, the administration did not demand a change in the company’s management.

Chrysler has been led by former Home Depot chief executive officer Robert Nardelli since August 2007.

Mr Wagoner, 56, has repeatedly said he believed it was better for him to lead GM through its crisis, but he has faced sharp criticism on Capitol Hill for what many politicians regard as years of missteps, mistakes and arrogance by the Detroit carmakers.

Mr Wagoner joined GM in 1977, serving in several capacities in the US, Brazil and Europe. He became president and chief executive in 2000 and has served as chairman and chief executive officer since May 2003.