The Obama administration autos task force 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 US automaker develops an even more sweeping restructuring plan under new leadership.
GM CEO Rick Wagoner, who met on Friday with the task force, was forced out on Sunday at the request of Rattner, an official said. US officials said plans were also underway to replace most of GM's directors in the coming months. (Reuters)