President Barack Obama on Monday will announce that the administration will provide General Motors with 60 days worth of funding while the auto manufacturer works to develop a credible plan to restructure, according to the White House.
The administration, which is offering the aid on the condition that GM Chairman and CEO Rick Wagoner resign, rejected “path to viability— plans submitted Feb. 17 by both GM and fellow auto giant, Chrysler.
“In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources,— the White House said in a document describing its findings.
As part of the requirement for further federal funds, other senior GM officials will be forced to leave and the Treasury will increase its involvement in the restructuring effort.
The Obama administration has determined that Chrysler is no longer viable as a standalone company, and that it must complete a contemplated merger with Fiat in order to receive more aid. Chrysler will receive 30 days worth of federal financing to give it time to complete a deal with the Italian automaker. If the merger is successful, the administration will “consider— providing another $6 billion in assistance. If not, the company will be on its own.
The administration also announced that Edward Montgomery, a labor economist and former deputy secretary of Labor, will serve as Director of Recovery for Auto Workers and Communities. He will coordinate the rescue efforts.