GM's Wagoner Stepping Down

The chairman and CEO of the troubled automaker confirms he is resigning at the request of the Obama administration.
Author:
Publish date:

Updated from 2:33 a.m. EDT

Rick Wagoner is stepping down from

General Motors

(GM) - Get Report

, after having served at the company for three decades.

The chairman and CEO of the troubled U.S. automaker is stepping down immediately, the company confirmed early Monday.

GM said in a statement that Fritz Henderson, GM's president and chief operating officer, will serve as CEO. Henderson, 50, was named to his current position in 2008. He was previously vice chairman and chief financial officer.

Kent Kresa, former chairman of

Northrop Grumman

, has been named interim non-executive chairman of the board. Kresa became a GM director in 2003.

Reports over the weekend from the

Associated Press

and other media reported that Wagoner's resignation comes at the request of the White House.

Wagoner confirmed the reports in a statement: "On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have."

In a major management shake-up, new directors will make up the majority of GM's board, the automaker said.

"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.

The news comes as the administration is preparing to unveil Monday its plan for providing additional aid to the auto industry. The White House is expected to ask GM and

Chrysler LLC

to undergo significant restructuring in exchange for additional government loans.

Speaking in an interview on

CBS'

"Face the Nation" broadcast Sunday, President Obama said automakers need to do more to qualify for additional help. "They're not there yet," he said.

Obama also said, "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."

Two people familiar with the plan said Sunday that the Obama administration would give GM enough government aid to restructure over the next 60 days, while

Chrysler

will get up to $6 billion and 30 days to complete an alliance with Italian automaker

Fiat

. The officials spoke on condition of anonymity because they were not authorized to make details public.

GM issued a statement early Monday saying it is "awaiting further announcements by the President and the Task Force on Automotive Reconstruction, and we will have additional comments at that time."

A person familiar with Chrysler's management said the company has been given no indication that the government will require any changes at the automaker, which has been led by former Home Depot CEO Robert Nardelli since August 2007. The person also spoke on condition of anonymity because Obama's plan has not been made public.

Wagoner joined GM in 1977 after graduating from Harvard Business School. He became the company's president and CEO in June 2000 and was elected chairman May 1, 2003.

The company is struggling with a sharp decline in auto sales resulting from the worldwide economic slowdown and a burdensome cost structure. The Bush administration approved $13.4 billion in loans for GM in December, but the automaker has said it needs more aid.

GM shares closed Friday at $3.62, up 21 cents.