Failure of Leadership Yet Wagoner Gets $23 Million

This is the kind of thing that has to change.

MSNBC: When General Motors Chairman and CEO Rick Wagoner leaves the automaker, he'll take with him a financial package worth an estimated $23 million.

The terms of General Motors Corp.'s government loans prevent it from giving executives severance pay, but they don't affect earned pensions.

Obama tells auto workers: "I will fight for you. You're the reason I'm here today." Obama appointed Edward Montgomery, director of recovery for auto workers and communities, to cut through the red tape to use stimulus funding to create new manufacturing jobs. Here is the announcement that Chrysler and GM just aren't cutting it: 

White House's Auto Task Force findings:

Viability of Existing Plans: The plans submitted by GM and Chrysler on February 17, 2009 did
not establish a credible path to viability. In their current form, they are not sufficient to justify a
substantial new investment of taxpayer resources. Each will have a set period of time and an adequate amount of working capital to establish a new strategy for long-term economic viability.
• General Motors: While GM’s current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S.
Treasury and outside advisors to assist with the company’s restructuring effort. Rick Wagoner is
stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM’s restructuring effort.
• Chrysler: After extensive consultation with financial and industry experts, the Administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration,
has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality.
Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this
partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler.
• A Fresh Start to Implement Aggressive Restructurings: While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start. Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way. Unlike a liquidation, where a company is broken up and sold off, or a conventional bankruptcy, where a company can get mired in litigation for several years, a structured bankruptcy
process – if needed here – would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success while they keep making cars and
providing jobs in our economy. Read more here.

Read more about Chrysler and GM viability and warranties for those GMs and Chryslers you own here.
Americans say let 'em die. Those would be the Americans who don't live in Detroit.

More Loans For Automakers Likely

Auto Plan Out By March 31 Makers Hopeful

Bankruptcy is not the goal, says Steven Rattner, head of the auto task force. An upside to the AIG rage-- it has focused congress on AIG, allowing the auto task force to actually get some work done. Chrysler, barely making it, likely to partner with Fiat.

Obama's Auto Task Force Hire Bankruptcy Lawyer

Reuters: President Barack Obama's task force on the auto industry has hired a bankruptcy lawyer to advise it on its options.

The task force hired Matthew Feldman, a partner in the business reorganization and restructuring department at New York law firm Willkie Farr & Gallagher LLP, the law firm said in a news release on Friday.

Feldman will be advising U.S. Treasury Secretary Timothy Geithner and Lawrence Summers, the director of the National Economic Council, on reorganization efforts by auto manufacturers and suppliers, Willkie said in a statement.

He will leave the firm by the end of March to start his position in Washington, according to Willkie.

Obama's Auto Task Force Goes to Detroit

Will the task force recommend restructuring through bankruptcy? Sen. Richard Shelby of Alabama, from the right right right wing, says Obama should let the automakers fail. Yesterday he said Obama should let the banks fail. Shelby only has one answer for everything. The guy's too extreme for a conversation.

Obama Scraps Auto Czar Names Task Force

Apparently, people were ready for a czar. Instead, Geithner will be in charge of the task force:

The news, which administration officials e-mailed around last night, took industry executives by surprise. For days, they had been expecting an announcement that the job would go to celebrity financier Steven Rattner, the private-equity executive and former New York Times reporter. One exec told us: 'We would have preferred having a single, go-to person focused on the restructuring. This isn't bad, but the other would have been better.' Politico

Several people on a task force are better than a czar. It lessens the danger of getting suckered manufacturers. Obama's probably saving some cash too.

CNN: President Obama is creating a task force to oversee the restructuring of the auto industry, a senior administration official said Monday.

General Motors (GM, Fortune 500) and Chrysler LLC face deadlines Tuesday for submitting plans to the administration detailing how they can turn themselves around.

The task force will include members from the Departments of Treasury, Labor, Transportation, Commerce, and Energy, the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency, the official said.

It will be overseen by Treasury Secretary Tim Geithner and NEC Director Larry Summers and provide advice and analysis about the auto industry.

Geithner will oversee the loan agreements with the automakers.

In addition, Ron Bloom, a nationally recognized restructuring expert, will join the administration's team as a senior adviser at the Treasury Department, the senior administration official said.