Sen. Dodd senator calls for GM head to step down--By Philip Elliott

A senator who will help determine whether the auto industry gets a $15 billion bailout said Sunday that the head of General Motors should step down, telegraphing what could be a congressional demand for a top-line shake-up in Detroit in exchange for financial life support.

Rick Wagoner, the chief executive of GM, "has to move on," said Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee. He spoke on CBS' "Face the Nation."

"I think you have got to consider new leadership," Dodd said. Asked if that should be a condition of any bailout, he added, "I think it is going to have to be part of it."

"I think it's clear GM is in the worst shape," Dodd said before specifying the need for Wagoner to step down.

In response, GM spokesman Steve Harris said the company appreciates Dodd's support for the loans, but added, "GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time."

Last week, The Associated Press asked Wagoner if he would resign at the request of Congress, to which he replied, "It's not clear to me that experience in this industry should be viewed as a negative, but I'm going to do what's right for the company and I'm going to do it in consultation with the board."

GM's board recently has been meeting three times a week by telephone.

But the shots kept coming Sunday. President-elect Barack Obama accused auto executives of a persistent "head-in-the sand approach" to long-festering problems. In an appearance on NBC's "Meet the Press," Obama said Congress was doing "the exact right thing" in drafting legislation that "holds the auto industry's feet to the fire" at the same time it tries to prevent its demise.

The criticism of industry leaders deepened as negotiators for the White House and Congress narrowed their differences over a plan to extend roughly $15 billion in short-term loans to any Detroit automaker that needs them. Analysts say General Motors Corp. and Chrysler LLC, in particular, are at risk for running out of money in the next few weeks, and that Ford Motor Co. may need help if the economy deteriorates further.

Democratic Sen. Carl Levin of Michigan, whose state is ground zero for the battered industry, told "Fox News Sunday" he was confident an agreement would emerge within the next day.

Democratic leaders have said they hope to pass the measure this week. While Levin declined to predict its approval, support among rank-and-file lawmakers presumably would improve dramatically if both White House and Obama were to signal their backing once the legislation is complete.

"The last thing I want to see happen is for the auto industry to disappear, but I'm also concerned that we don't put $10 billion or $20 billion or $30 billion or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, `Give me more,'" Obama said.

Obama, who takes office Jan. 20, has drawn some criticism from Democrats who want him to become more involved in efforts to save the industry. The president-elect said his aides are monitoring developments and considering longer-term plans.

He expressed no support for calls to allow the big carmakers to enter bankruptcy and said, "We don't want government to run companies." Instead, he said, "if taxpayer money is at stake — which it appears may be the case — we want to make sure that it is conditioned on an auto industry emerging at the end of the process that actually works, that actually functions.

"Taxpayers, I think are fed up. They're going through extraordinarily difficult times right now."

Obama did not single out any individual executive by name for criticism, and said there had been incremental progress in the past 15 years toward a more competitive line of products.

"What we haven't seen is a sense of urgency and the willingness to make tough decisions. And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors, who are doing a lot better," he said.

Asked whether the top executives should remain in the jobs, he said: "Here's what I'll say, that it may not be the same for all the companies. But what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now."

Later, at the news conference, he appeared to temper his comments, saying that current management should be ousted if it doesn't understand the urgent need to make changes in the industry.

A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi, D-Calif., yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.

The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive. GM and Chrysler made clear that $15 billion would be enough to keep them running until the end of March 2009.

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AP Auto Writer Tom Krisher in Detroit contributed to this story.