White House says GM’s new CEO Henderson has embraced change

White House says GM’s new CEO Henderson has embraced change
 

Automotive News | April 3, 2009 – 3:31 pm EST

 

WASHINGTON (Reuters) — The new CEO of General Motors has embraced a change of direction for the automaker and is working on a plan to make the firm viable, White House economic adviser Austan Goolsbee said today.

Goolsbee said GM CEO Fritz Henderson, who took over for ousted CEO Rick Wagoner, was "considering all the various options to make it a viable plan going forward and to avoid an uncontrolled liquidation."

"It’s clear he’s embracing a change of direction and they’re trying to work on a viable plan," he told Reuters Financial Television.

The Bush administration bailed out two carmakers in December, loaning GM $13.4 billion and Chrysler $4 billion to fund ongoing operations and prevent a collapse. It set a March 31 deadline for them to present a viable turnaround plan in exchange for additional funding.

President Barack Obama’s administration on Monday said the restructuring plans had not gone far enough. It forced Wagoner’s ouster, pushed Chrysler LLC toward an alliance with Italy’s Fiat SpA and threatened bankruptcy for both.

The steps marked a reversal for management at both carmakers and took aim at GM creditors who had bet that the administration would rescue the top U.S. auto producer.

Instead, the administration pledged only to fund GM’s operations for the next 60 days while the firm develops a more sweeping restructuring plan under new leadership.

Goolsbee said Chrysler and Fiat "have been meeting with the task force and … everybody’s heavily engaged in trying to come up with viable restructuring plans."

The administration gave 60 days for GM to present its viability plan and Chrysler 30 days to solidify an alliance with Fiat.

"The key thing the president is trying to do there is avoid an uncontrolled liquidation of these companies … but at the same time not turn companies into wards of the state that can’t live except for getting an allowance from the government," Goolsbee said. "They’ve got to be viable enterprises."

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