Pres Obama demands radical reform, and quickly, as he delays a decision about more cash for struggling carmakers. But how about to also fire Wall Street CEOs?President Obama raised the possibility that two of Detroit's teetering carmakers, General Motors and Chrysler, could be forced into bankruptcy, blasting them for failed leadership, unrealistic business plans and a slow rate of reform.
The White House earlier ordered the resignation of GM's veteran boss Wagonner.
Obama announced tax incentives for Americans to buy new cars, but delayed a decision on $21bln in extra bailout money from the public pocket, demanding far more radical reform proposals from the carmakers within weeks, calling the situation a failure of leadership from Washington to Detroit.
The harsh tone of the administration's message stunned both Wall Street and Detroit.
It dismayed workers and politicians in Michigan who saw the looming prospect of even deeper job losses, factory closures and cuts to benefits.
For Chrysler, however, the prognosis was worse. The taskforce concluded that the ailing company, which employs 38,000 people in the US but lost $8bn last year, had no future as a standalone business and must pursue a wide-ranging alliance with Fiat.
The treasury said it would only support Chrysler for another 30 days.
In his speech, Obama appeared to prepare the ground for bankruptcy for both companies.
Between them, GM and Chrysler have already received $17.4bn of emergency loans from the federal government. But GM has asked for a further $16.6bn and Chrysler, which is owned by the private equity company Cerberus, wants another $5bn to restore stability
"When will the Wall Street CEOs receiving funds summon the honour to resign?
Will the White House ever bother to raise this issue? I doubt it."
http://www.guardian.co.uk/business/2009/mar/30/obama-threatens-bankruptcy-us-carmakers
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