It is unclear if Wagoner's resignation is one of the stipulations for the federal government to lend billions more to GM. But sources close to the talks say tough conditions will be attached to any future aid.Odds of this being a coincidence roughly equal the odds GM can make it without government help. Smart money has to be on GM's "orderly bankruptcy" now proceeding. The CEO leaving at this juncture strongly suggests the tough new restrictions go far beyond forcing Wagoner's resignation. Bloomberg notes that as recently as ten days ago, Wagoner had no intention of resigning. There has to be a CEO to run the company, and the government asking GM to change the CEO without forcing a bankruptcy seems pointless. Regardless of the deal involving bankruptcy or not, a deal has been struck, and part of that deal is Wagoner's resignation.President Obama will update the public on the Treasury Department’s next step in helping GM and Chrysler on Monday afternoon.
A senior White House official did not deny to CNBC that the Obama administration influenced Wagoner's departure.
Asked if the administration forced him out, the senior official replied, "'forced' is a little strong."
If only Obama would attach the same caveats to all the bank bailout money and bank CEOs.
[UPDATE] The NY Times reports:
A person with direct involvement in the auto bailout discussions said the administration would set a new deadline of April 30 for the automakers to come to terms with the bondholders and the union.So that's it then: it's either nationalization or bankruptcy for GM.“Thirty days from now, there will either be a bankruptcy or the naming of a chief restructuring officer who will have government authority to ‘knock heads together,’ ” this person said. In addition, the government must come up with a backup guarantee on loan for G.M. to operate during bankruptcy because the banks will not do it.
More tomorrow.
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