Updated: A critical week lies ahead for the U.S. auto industry and GM’s Chevy Volt: On Monday, President Barack Obama is scheduled to reveal the next chapter in the government’s bailout plan, announcing the first recommendations from his auto task force, which test drove GM’s plug-in hybrid Chevy Volt earlier this month as part of an onsite scrutiny meant to help determine whether or not to swoop in with another round of rescue funds.
Swoop or no swoop, General Motors is in for a serious shakeup: Late yesterday, the Obama administration asked GM’s CEO Rick Wagoner to step down as a condition of more bailout money. Wagoner agreed, and COO Frederick Henderson will take the reins, for now.
This week was also supposed to mark the final deadline for GM and Chrysler to submit restructuring plans, but by Friday afternoon the task force had all but settled on giving GM a 30-day extension because of an impasse in negotiations with bondholders. The automakers are now set to submit “assessments of where their restructuring efforts are heading” by Tuesday, according to the Wall Street Journal. UPDATE: The task force has concluded that while GM can become a competitive automaker with a major overhaul, the company’s restructuring plan “is not viable.” The government will give GM 60 days of working capital to develop a more aggressive plan. Chrysler, meanwhile, has 30 days to complete a tie-up with Fiat SpA, as Reuters reports. Otherwise, Obama’s administration will cut off all government aid to the automaker.
At previous bailout benchmarks — the hybrid parade to Capitol Hill in a bid for aid last December and the turnaround plan submitted last month – GM has trotted out the Volt as proof of its commitment to innovation and fuel efficiency. At this stage, GM is hoping to snag another $16.6 billion in bailout money to pay its bills and avoid bankruptcy. It has already received $13.4 billion.
While the Volt won’t be in the hot seat this time around (Obama’s auto task force will focus on GM’s efforts to shrink debt and cut costs amid slumping demand, Reuters reports), the company has made a point of trumpeting progress on the vehicle. Delays in finalizing its restructuring plan and the uncertainty surrounding its finances would seem to put big “ifs” in a plan to debut a product that won’t generate profit for some time. But last week, GM insisted it remains on track for the first fully integrated Volts to come off assembly lines by June 1 and models to hit showrooms in late 2010. So, what’s next for fans of the Chevy Volt? Hoping the rest of the company doesn’t crumble around it.