Wagoner resigns, administration tough on autos

President Obama is set to outline his plan for the U.S. auto industry this morning, and leaks to the major papers make clear there will be no easy handouts.

GM CEO Rick Wagoner resigned Monday morning, reportedly at the behest of the Obama administration, and similar shake-ups could be in store for GM’s board of directors.

Obama is expected to order GM to cut costs drastically as a precondition of any further government aid. Things are worse for Chrysler: the administration does not believe Chrysler is viable as a stand-alone company. Chrysler must merge with Italian automaker Fiat by April 30 if it wishes to receive $6 billion in federal funding.

The plan results from the findings of a special auto industry task force.

In his virtual town hall on Thursday, President Obama previewed his tough line on the automakers, warning that future aid would “depend on their willingness to make some pretty drastic changes,” adding that “some of those are still going to be painful because I think you’re not going to see a situation where the U.S. automakers are gaining the kind of share that they had back in the 1950s.”