The “formal” news will come out tomorrow, but Rattner and his know-nothing auto czars are sending the GM/Chrysler execs back to the drawing board for another 30 days to come up with a more aggressive plan. … well, the remaining execs, that is.
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.
They called Chrysler “unrealistic or overly optimistic”. Or were they talking about Obama’s budget and his economic projections for recovery? Hard to tell, eh? The Obama power czars are pushing for a merger with Fiat.
Meanwhile, Rick Wagoner’s messy departurefrom GM under pressure from a sitting President (does reading that make anyone else as queasy as me??) will be filled by Fritz Henderson, the currrent GM
President and Chief Operating Officer. Oddly enough, he’s the architect of the current plan being rejected. huh? He’s supposed to work closely with the Obama czars on a more “aggressive” restructuring.
But a quick bankruptcy is still an option on the table.
The official said the Obama administration had not ruled out a structured, quick bankruptcy process for either GM or Chrysler. Such a process, he said, could shed debt at a time when GM bondholders and Chrysler’s bank have held out against concessions.
“Think of it as a quick rinse,” the senior official said. “It would be very, very short. Potentially as little as 30 days. The companies would emerge from the other side very quickly.”
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.