Obama forces GM CEO Rick Wagoner to resign

Monday, March 30. The Obama administration has forced Rick Wagoner, the chairman and CEO of General Motors, to stand down. The move has been described by pundits as the most dramatic interference President Barack Obama has made into big business yet. Wagoner's sacking - he has been temporarily replaced by former GM COO Frederick 'Fritz' Henderson - comes ahead of an announcement Obama will make today explaining why neither Chrysler nor GM will receive further government bailouts.

In a conference call on Sunday night, a White House official said that neither car-maker had submitted a business plan that made them appear deserving of the huge government bailouts they have already been given. "We have unfortunately concluded that neither plan submitted by either company represents viability," said the official, "and therefore does not warrant the substantial additional investments that they requested."

The official continued: "The president has established very firm, very clear, unambiguous, unchangeable deadlines and guidelines for which the government will invest new money. And we intend to stick to those."

Writing for Politico, Mike Allen and Josh Gerstein say that sacking the 30-year GM veteran is "the most vivid example so far of the extraordinary new role that the government, as controller of the bailout purse strings, is playing in American business."

However, Peter Morici, an economist and expert on Wagoner's tenure of GM, was quoted on Reuters saying that the 56-year-old was a sacrificial scapegoat. "They [the Obama administration] are bailing out just about anybody that shows up and says they need cash," say Crawley and Krolicki. "The public has grown weary of it and instead of throwing a banker to the wolves they have decided to throw Wagoner to the wolves."

FIRST POSTED MARCH 30, 2009