US says it might let GM bankrupt, NASCAR in jeopardy UPDATE A related Washington Post article with some doomsday quotes about GM. Henderson, a key architect of GM's now-rejected turnaround plan, was charged with working with U.S. officials and advisers to develop a more aggressive restructuring.
"We believe our approach to GM is starting with a clean sheet of paper," the senior official said.
GM bondholders, the official said, could have to take less than the 33-cent-on-the-dollar payout they have been offered and should abandon hope of a government guarantee.
The Obama administration had also not ruled out a quick bankruptcy process for either GM or Chrysler, he said.
Wagoner had been outspoken in his opposition to a Chapter 11 reorganization, saying it would drive away consumers and probably lead to GM's liquidation.
GM had asked for more than $16 billion in new government loans, while Chrysler wanted $5 billion to ride out the weakest market for new cars in almost 30 years.
GM has lost about $82 billion since 2005 when its problems began to mount in the U.S. market. GM stock has also lost about 95 percent of its value since Wagoner took over as CEO. Although he inherited many of the company's deeper problems, his critics say he failed to act fast enough to resolve them.03/30/09 The resignation of General Motors Corp. CEO Richard Wagoner and the Obama auto team's findings seem sure to create more turmoil for GM stock today.
The administration said it would give GM 60 days of working capital to come up with a credible viability plan, saying it would support the company's turnaround -- but made no guarantees.
It would have been impossible for the U.S. government to give additional loans without dramatic changes at GM. And the Obama administration said Sunday a structured bankruptcy may be best for GM and Chrysler.
Auto analyst Maryann Keller, a longtime critic of Wagoner who is known for her blunt talk, said Washington could not give money to a company that's still being run by the "man that drove the bus off the bridge."
She has criticized Wagoner's leadership for several years -- and stayed true to that sentiment Sunday.
"GM is headed for a calamity, and he should have seen that coming," Keller said. "From my point of view, Rick was always on a short rope."
Over the years, many on Wall Street and outside of Detroit have questioned why Wagoner continued to run GM despite GM's history of financial troubles.