March 29 (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 Obama administration asked Wagoner, 56, to leave the company and he
agreed, an administration official said. Wagoner said March 19 that he didn't
plan to resign.
The departure of Wagoner comes as President Barack Obama prepares an address
tomorrow morning on his plans for the future of the U.S. auto industry. GM
is surviving on $13.4 billion in U.S. loans and is asking for as much as
$16.6 billion in additional aid to survive. Wagoner was asked to step down
as part of the company's restructuring, the official said.
The longtime GM chief, who has been lampooned on Saturday Night Live and
vilified for his central role in the auto- industry collapse, said this
month that the hadn't been asked by the government or his own board to
resign and his plan was to finish the restructuring.
"I do it because it's important and I feel like I have a responsibility to
do it," Wagoner said in a March 19 interview. "I plan to stay here until we
get things well in shape and on track and beyond that, we'll see."
GM has said it will shed 47,000 jobs globally in 2009 and plans to close
five assembly plants. Executives said the Detroit-based automaker will focus
on four U.S. brands down from eight and eliminate thousands of dealers. The
stock tumbled 87 percent last year.
GM has rallied 66 percent since March 12, when Chief Financial Officer Ray
Young said it wouldn't need a $2 billion payment by the end of this month to
survive as originally forecast. The biggest U.S. automaker is benefiting
from increased cost cutting, Young said.
Wagoner has run GM since June 2000, presiding over $82 billion in losses
beginning since the end of 2004, the last profitable year. Wagoner weathered
the losses and activist investor Kirk Kerkorian's 2006 push for an alliance
with Renault SA and Nissan Motor Co.
Wagoner has repeatedly argued he knows the company better than most who
could take his job. He joined GM in 1977, as U.S. automakers were fending
off Japanese competitors who recognized the need a decade earlier to build
As CEO, the former Duke University freshman basketball player and Harvard
University MBA early on bet against gasoline- electric hybrid vehicles,
focusing research on hydrogen technology. GM offered its first full-scale
hybrids in 2007, a decade after Toyota introduced the Prius.
Wagoner kept GM focused on trucks and sport-utility vehicles, only to press
for development of the Volt plug-in electric car when gasoline prices
He used the purchase of South Korea's Daewoo Motor Co. to expand GM's
overseas sales 51 percent to 5.5 million cars and trucks by 2007. He wrung
concessions from labor unions in 2007, including cutting wages in half for
new hires and offloading retiree health care to a union-run trust by 2010.
The federal government has previously requested the replacement of chief
executive officers at American International Group Inc., Fannie Mae and
Freddie Mac when they received aid.
Then-Treasury Secretary Henry Paulson replaced Fannie Mae CEO Daniel Mudd
and Freddie Mac's Richard Syron when he put the two mortgage-finance
companies into government conservatorship in September. AIG chief Robert
Willumstad left after the Fed took control the same month.
In 1984, federal regulators replaced the board chairman and CEO of
Continental Illinois National Bank and Trust Co. after taking an 80 percent
The chairman of Lockheed Aircraft Corp., now part of Lockheed Martin Corp.,
kept his job when the defense contractor won $250 million in federal loan
guarantees in 1971, even after offering to resign.