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BY Kenneth R. Bazinet
DAILY NEWS WASHINGTON BUREAU Sunday, March 29th 2009, 8:03 PM Srakocic/AP Barack Obama talks with GM boss Rick Wagoner in 2008. WASHINGTON - The White House forced the head of GM to step down Sunday as President Obama warned Detroit automakers to clean up their act if they want more government cash. General Motors Chief Executive Rick Wagoner didn't make the grade amid government demands that he retool the automaker and nudge the embattled car company towards profitability. "We asked him to step down and he agreed," a senior administration official told the Daily News. Wagoner, who ran GM for eight tumultuous years, earned the ire of the American people last year when he and other Detroit honchos flew on private planes to Washington to plead for a taxpayer-funded bailout. It was unclear who might succeed him. Just hours before Wagoner was forced out, Obama insisted Detroit's Big Three automakers still have more tinkering to do. "They're not quite there yet" Obama told "CBS's Face the Nation." "There's been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen, you know, the market for new cars drop from 14 million to nine million." The ouster of the head of the iconic automaker is one of the most dramatic signs yet of how strong a role the government is now playing in the private sector. Obama intends to reveal new plans today for bailing out Chrysler and GM, which already have been handed $17.4 billion in federal government loans. GM is asking for another $16.6 billion, while Chrysler wants an additional $5 billion. So far Ford has not asked for handouts from Washington. Treasury Secretary Timothy Geithner, appearing on ABC's "This Week," admitted, "We're prepared as a government to help that process if we believe it's going to provide the basis for a stronger industry in the future that's not going to rely on government support." Pushing out the unpopular Wagoner makes it easier for the administration to hand over more cash to the ailing auto giant, another adminsiatrtion source indicated. Obama is laying down tougher prerequisites for Detroit than his administration has demanded of Wall Street, which has not had to provide restructuring plans to get the billions of taxpayer dollars. Obama insisted he gave the nation's top bankers a wake up call that they need to clean up their act when he met with them Friday. "It's very difficult for me as President to call on the American people to make sacrifices to help shore up the financial system if there's no sense of mutual obligation andf mutual help," Obama said. Insiders have acknowledged that Obama won't let the automakers go under for a variety of reasons, including protecting the 140,000 mostly unionized workers and their pension plan. Obama also reiterated his plans for a troop surge in Afghanistan aimed at smoking out Al Qaeda and other militants. He promised his plans to do not currently include invading border areas of U.S. ally Pakistan, where militants are believed to be hiding out. Defense Secretary Robert Gates, appearing on "Fox News Sunday," pressed the point, saying, "What we need to do is try and help the Pakistanis understand these groups are now an existential threat to them and we will be there as a steadfast ally for Pakistan."
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