US president Barack Obama has set new deadlines for car manufacturers Chrysler and General Motors (GM) to restructure
This follows the news that Obama requested Rick Wagoner resign from his role as chief executive and chairman of General Motors. He has been replaced by Fritz Henderson, who was previously the company’s president and chief operating officer.
Wagoner was asked to stand aside by the Obama administration as a pre-condition of financial support.
The two companies have already received nearly US$17.4 billion from the US government to help it through the global recession.
If the giant US car makers want a slice of the US$20 billion bail-out, they will have to produce a new recovery plan within a tight deadline.
Chrysler has been given 30 days to submit new plans, and GM has 60 days to meet the request.
Obama blamed the car maker’s debt on a “failure of leadership – from Washington to Detroit.”
“We cannot, we must not and we will not let our auto industry simply vanish,” the president said.
“But our auto industry is not moving in the right direction fast enough to succeed.”
It’s thought bankruptcy protection is the best option for GM and Chrysler, which could speed up the restructuring process.
Obama said the plans could “quickly clear away their old debts that are weighing them down so they can get back on their feet and onto a path of success.”
The president also said he would work with Congress on a programme to encourage consumers to replace old, less fuel efficient cars with newer, cleaner vehicles.