Posted tagged ‘Rick Wagoner’

Obama: No Bailout Funds for Automakers

March 29, 2009

The White House says neither GM nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.

From the Associated Press:

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever. In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Obama was set to make the announcement at 11 a.m. Monday in the White House’s foyer.

In an interview with CBS’ “Face the Nation” broadcast Sunday, Obama said the companies must do more to receive additional financial aid from the government.

“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge—at the other end—much more lean, mean and competitive than it currently is,” Obama said.

Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

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General Motors CEO Rick Wagoner to Step Down

March 29, 2009

General Motors CEO Rick Wagoner will step down after more than eight years with the company.

From Bloomberg:

General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.

The people, who asked not to be named because the announcement hasn’t been made, didn’t give a reason why Wagoner, 56, is leaving. Wagoner said as recently as March 19 that he didn’t plan to resign.

From the New York Times:

The chairman and chief executive of General Motors, Rick Wagoner, is resigning, just as President Obama prepares to unveil his rescue plans on Monday for G.M. and the ailing American auto industry, according to a person close to the decision.

The unexpected move by Mr. Wagoner, who has been at the helm of G.M. for eight years, was not confirmed by the company. But a statement about Mr. Wagoner’s future will be issued after the president’s address.

G.M. and Chrysler are on the verge of exhausting the $17.4 billion in federal loans given to them since December. G.M. has asked for up to $16.6 billion more, and Chrysler another $5 billion.

The president’s auto task force is expected to recommend more short-term assistance to the two Detroit companies, but with tight strings attached to the money and a new deadline to get concessions from union workers and creditors.

GM Cuts 10,000 Jobs

February 10, 2009

Will the job cuts ever end in the US?

General Motors  is planning to slash another 10,000 salaried jobs this year, saying the cuts are unavoidable with a government restructuring deadline looming and industrywide sales in one of the worst downturns in history.

From the Associated Press:

The Detroit-based automaker said Tuesday it will reduce its total number of white-collar workers by 14 percent to 63,000. About 3,400, or 12 percent, of GM’s 29,500 salaried U.S. jobs will be eliminated.

Most of the company’s remaining salaried employees will have their wages cut.

In its plan to Congress submitted late last year, GM said it would have to reduce both salaried and hourly positions so that the company could become viable long-term. The company plans to reduce its total U.S. work force from 96,537 people in 2008 to between 65,000 and 75,000 in 2012, but did not specify how many of the surviving jobs will be salaried or hourly.

GM Chief Executive Rick Wagoner, who was meeting with congressional leaders in Washington about global warming legislation, said Tuesday’s announcement is “indicative of the kind of things we need to do to get this viability plan in shape and respond to these tough market conditions.”

GM has dramatically downsized both its salaried and hourly work forces in recent years as the U.S. auto market has shrunk from an annual sales rate of around 16 million vehicles to 13.2 million last year.

Since 2000, GM’s salaried work force has shrunk by 33 percent from its 2000 high of 44,000 people. At the same time, the number of hourly workers has plunged by more than half — to about 63,700 people at the end of last year from 133,000 in 2000.

Most of the cuts announced Tuesday are expected to take place by May 1. GM said the cuts will vary by global regions depending on staffing levels and market conditions.

The company’s statement said there would be no buyout or early retirement packages as GM had offered in the past, but laid-off employees will get severance pay, benefit contributions and other assistance.

Automotive Executives to Carpool to Next Hearing?

November 24, 2008

That might be a good idea! After being ridiculed by Congress and made fun of on NBC’s “Saturday Night Live,” the CEOs of Detroit’s big three automakers may end up making their return trip to Washington by car as they seek a federal bailout.

From the Associated Press:

The Detroit area’s auto industry, whose livelihood depends on the health of Chrysler LLC, Ford Motor Co. and General Motors Corp. spent the weekend e-mailing and discussing how to set up a giant car caravan to seek help from Congress.

What’s for certain is GM CEO Rick Wagoner won’t be going to Washington by corporate jet, although the company’s policy is not to comment on executive travel plans for security reasons, said spokesman Tony Cervone. A Chrysler spokeswoman wouldn’t comment on executive travel plans, and a message was left for a Ford spokesman.

The carpool idea came out of meetings on Friday at Dura Automotive Systems Inc., an auto parts maker in suburban Rochester Hills. President and CEO Tim Leuliette said that during the weekend they contacted the automakers, suppliers, dealership groups and the United Auto Workers and the movement began building.

“The proper people are talking to the proper people, and things are getting put together,” said Leuliette. “This really picked up momentum over the weekend.”

Industry representatives want Congress to see not just three CEOs in suits during the hearings, but the many people dependent on the automakers for their livelihoods, Leuliette said.

“Quite honestly, this is about America,” he said. “This is a process of people’s lives being affected, and sometimes they don’t know how to put a voice to those concerns.”

The movement comes after last week’s disastrous hearings in front of two Congressional committees. Ford CEO Alan Mulally, Chrysler LLC CEO Robert Nardelli and GM’s Wagoner traveled to Washington on separate corporate jets to seek $25 billion in government loans to help them make it through the worst U.S. auto sales downturn in 25 years.

Congress, though, abandoned a vote on the bailout after the appearances in which the automakers were criticized for lavish corporate travel, as well as for having poor business plans and high labor costs that some members said would keep them from being competitive with Toyota Motor Corp. and Honda Motor Co.