Auto bailout demands 'tech leadership' from GM
Updated at 12:20 p.m. PDT with information from president's auto industry task force report on GM.
Following a review of the ailing U.S. automakers, the Obama administration has ousted General Motors CEO Rick Wagoner and has withheld more loans to Chrysler, according to reports.
On Monday, General Motors put out a statement that Wagoner was asked to "step aside" as CEO of GM. Chief Operating Officer Frederick "Fritz" Henderson is now CEO, and changes to GM's board of directors are expected.
(Credit:
Martin LaMonica/CNET)
The restructuring plan for GM has four elements: sustainable profit, healthy balance sheet, more aggressive operational restructuring, and technology leadership, according to the GMBlogs Twitter account, which is run by GM communications professionals.
Obama administration officials are expected to provide an update on the auto industry rescue plan on Monday but are demanding concessions before releasing any of the $21.6 billion that GM and Chrysler are requesting in additional loans, according to an article in the The Wall Street Journal.
The federal government could recommend that GM enter into bankruptcy, according to the article. Chrysler is considered more precarious financially: $6 billion in additional loans are contingent on the automaker forging an alliance with Fiat in 30 days.
For GM, it's not clear how a more dramatic restructuring program will influence the company's technology development programs, including investments in fuel-efficient cars and plug-in electric vehicles.
At a recent briefing on GM's Chevy Volt electric sedan, executives said the program continues to be on track and that the company continues to devote resources to it.
The Chevy Volt, which runs 40 miles on a battery pack and draws on a gasoline engine for longer trips, is still scheduled for delivery in late 2010. But the sedan will have lots of competition from an anticipated wave of all-electric and gas-electric sedans coming from large automakers and start-ups in the next two years.
In its assessment of GM, the president's auto industry task force said that the company was at least one generation behind Toyota in "green" powertrain development.
"In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable," according to the report. (Click for PDF).
The report also concluded that GM relies too heavily on high-margin SUV and truck sales and that the company is more vulnerable than competitors to increases in the CAFE fleet fuel-efficiency standards.
"Many of its products fail to meet the minimum threshold on fuel economy and rank in the bottom quartile of fuel economy achievement," according to the report.
Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld. E-mail Martin. 
The gall of the fed. dictating to private business! Unless the accepted bailout law included provisions for complete gov't takeover or specific CEO hire/fire controls, Wagoneer should give them the finger, and then do what he thinks best without taking any more money.
For profitability, you're going to have to sell a LOT of cars that people want. Hint: not hybrids or electrics- the cost isn't worth it.
massive, useless deficits he is creating. What a jerk. Automaking is a business that is more like fashion than technology, despite the ridiculous claims that electrc cars are "high tect." Electric cars were around long before Obama's great, great ancestors. They ARE NOT high tech. And look at which ones are getting all the press - the Tesla and Fisker, the Tesla being practically obsolete with its first generation li ion batteries and impractical costs and the Fisker also priced into the stratosphere. They are desirable because the LOKK GOOD, not because they contain any advanced technology. Obama, no motion picture leading man, obviously doesn't comprehend the value of beauty, since he doesn't have any . He, once again, is clueless and relies on those same tired old cliches about "restructuring" and "advanced technology" to save the day. Now we know why no one ever tried to lure him into business. He could only have survived in an advertising department, where you are expected to lie and not know very much.
Also, not sure how many people would agree that all those toyota, honda, ford and GM cars which you can already see plenty of on US roads are that fashionable and look glorious.
The other electric car's are from the early 1900's. Most car's did not travel long distances, so many used batteries.
So the price to get a bail out is to step down and clean up.
When you look at the big banks, they new, they where extending risky credit, they knew who they where targeting. They fed on these peoples desire for the americian dream to own a house. They blew this up, and made it look good with promises that the market price would continue to increase and the people could "Flip" the house before the big interest kicked in.
This was the game plan and it blew up. Now the banks, want the houses, as well as they want the money from the Fed's.
The people hurting are the ones who believed in the dream and signed the dotted line as the medicine man sold them a bill of goods. The other one hurting is the tax payer who is bailing these banks out at the point of a loaded gun.
And the big exec's? They pay each other huge bonus's for not only screwing us over once, but twice for good measure.
This is why the US is in the mess it is in, this is why the Fed's are stepping in.
And as tech in auto industry, do not use M$, you put that crap in the car, I will not buy the car like I will not buy any electronics with M$. Because, I know you are not getting the best price for your operation cost, why pay a M$ license when you can get Linux for less.