GM CEO Rick Wagoner to resign

Kinda weird how a President of a country can tell a so called publicly owned company to resign and it happens. I thought this was supposed to be a free market and the shareholders held that responsibility.

As troubled automaker appeals for federal help, Rick Wagoner gives up top spot following years of losses and declining U.S. market share.

NEW YORK (CNNMoney.com) -- General Motors Chief Executive Rick Wagoner will resign as part of the federal government's plan to bail out the struggling automaker, White House and GM sources told CNN Sunday.

Wagoner's departure comes the day before President Obama is expected to announce the latest details of the government's plans for restructuring GM and Chrysler LLC, which have been pushed to the brink by huge losses and a sharp decline in sales.

Fritz Henderson, the current chief operating officer, is expected to be named interim CEO of General Motors, according to two GM sources.

A GM spokesman declined to comment.

GM and Chrysler face a Tuesday deadline to prove to the Treasury Department that they can be viable in the long term. Without such a finding, the government can recall the $13.4 billion it has already lent to GM (GM, Fortune 500) and the $4 billion it loaned to Chrysler.

Wagoner, a 32-year company veteran, has been CEO of General Motors since 2000. Prior to becoming CEO, he was chief operating officer and led the company's North American operations. He also served as chief financial officer from 1992 to 1994. ('Wagoner: Almost a superstar CEO')

A senior GM official official told CNN that the White House and its auto task force had "sent very clear signals" that the key to more help was "new leadership" and something that would help the administration see real change.

General Motors has been hit hard as auto sales have plummeted. Sales have continued to tumble through the early months of this year, falling 40% across the industry and about 50% at GM and Chrysler.

The companies and industry analysts have slashed their sales estimates for the year -- and that in turn has heightened the need for more loans to keep GM and Chrysler afloat.

Last month, the two companies filed reports on their restructuring efforts. GM said it needed up to $16.6 billion more in loans. Chrysler asked for an additional $5 billion, and said it would need the money by the end of March to avoid running out of cash.

The Obama administration had been widely expected to approve the requests. Obama has repeatedly spoken about the importance of saving the struggling auto industry, and on March 19, Treasury announced $5 billion in federal help for GM's and Chrysler's auto parts suppliers.

The other member of Detroit's Big Three, Ford Motor (F, Fortune 500), has a better cash position than its rivals and has so far not needed federal loans. But Ford has asked for a $9 billion line of credit in case sales continue to be worse than expected or if major suppliers have to halt operations.

Job cuts
As part of the viability plan, GM and Chrysler were to win concessions form bond holders and the UAW.

GM has a big debt load, but negotiations with bond holders have gone slowly.

As for talks with labor unions, last week GM announced that 7,500 factory workers had taken its latest buyout offer. The workers leaving the company represent about 12% of the GM's remaining U.S. hourly work force, leaving it with just under 55,000 factory workers in the United States.

With this latest program, GM has shed about 60,000 hourly U.S. jobs since 2006. GM has offered buyout packages to all of its remaining hourly workers.

Even if the company needs to hire someone new to replace a departed worker, the company will save money under terms of the 2007 labor contract that pays new hires at a lower wage scale and with a far less lucrative benefit package.

--CNN's Kate Bolduan and John King contributed to this report.