Government Rejects Turnaround Plans from Auto Industry as Obama Tightens Control on Companies

Its Corporatism as in the state essentially runs the company and to an extent the union. Both sides are forced to be in harmony according to goals established by elected officials while the company itself produces products in accordance with the government. Now the government has shot down the plans of these companies and is pushing deeper into controlling them. It won't work but that is not going to stop them.

The decision to ask G.M.’s chairman and chief executive, Rick Wagoner, to resign caught Detroit and Washington by surprise, and it underscored the Obama administration’s determination to keep a tight rein on the companies it is bailing out — a level of government involvement in business perhaps not seen since the Great Depression.

President Obama is scheduled to announce details of the auto package at the White House on Monday, but two senior officials, offering a preview on condition of anonymity, made clear that some form of bankruptcy — a quick, court-supervised restructuring, as they described it — could still be an option for one or both companies.

Mr. Obama’s auto industry task force, in a report released Sunday night assessing the viability of both companies and detailing the administration’s new plans for them, concluded that Chrysler could not survive as a stand-alone company.

It doesn't work mind you but that won't stop them and friring of Rick wagoner is clearly political in nature. I expect the Obama admin will demand givebacks and layoffs from trhe unions, to make them feel better he can say he tossed out the evil corporate boss as well.

WASHINGTON (Reuters) - The Obama administration autos task force on Monday rejected the turnaround plans of General Motors Corp and Chrysler LLC and warned both could be put through bankruptcy to slash debts.

The announcement by the White House autos panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers and for GM investors and creditors who had bet on a softer line.

"We have unfortunately concluded that neither plan submitted by either company represents viability and therefore does not warrant the substantial additional investments that they requested," said a senior administration official, who asked not to be named.

Instead of granting GM's request for up to $30 billion in loans, the administration only pledged to fund GM's operations for the next 60 days while the top U.S. automaker develops an even more sweeping restructuring plan under new leadership.

This isn't a bailout its a takeover.

(CNN) -- General Motors CEO Rick Wagoner announced his resignation early Monday -- the latest change for the troubled automaker.

White House and GM sources had told CNN Sunday that Wagoner would resign as part of the federal government's bailout strategy for the troubled automaker."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," Wagoner said in a statement posted to the GM Web site.

He is being replaced by GM's president and chief operating officer, Fritz Henderson. Kent Kresa will serve as interim chairman.

NEW YORK (CNNMoney.com) -- The Obama administration offered General Motors and Chrysler LLC a huge carrot Monday - the possibility of billions of dollars more in loans if they can win additional concessions from creditors and unions.

It also gave GM and Chrysler a break by not recalling the $13.4 billion already loaned to GM (GM, Fortune 500) and the $4 billion already loaned to Chrysler.

But it also unveiled a large stick - the threat of putting the two companies into bankruptcy, and possibly even forcing Chrysler out of business, if they do not reach deals that the government insists are needed to make the two companies viable for the long-term