GM in skid after Obama cash snub for carmakers

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The latest blow to the ailing industry saw shares in GM plunge almost 20% ahead of Wall Street's opening.

GM chief executive Rick Wagoner was forced from office last night after the administration rejected his plea for another $16.6 billion (£11.7 billion) of state help on top of the $13.4 billion already pumped into the company, which owns Vauxhall in the UK.

Chrysler had asked for an extra $5 billion to follow the $4 billion it has received so far.

Both firms have been told to work on new proposals that would seek less taxpayer money, promise more green technology and offer greater
concessions from their boards.

GM has said it would cut 47,000 jobs worldwide by the end of this year, while Chrysler will shed 3000.

Any further state aid would come from the US Troubled Assets Relief Programme, which Treasury
Secretary Timothy Geithner said had some $135 billion left.

Obama said yesterday: "We think we can have a successful US auto industry. But it has got to be one that's realistically designed to weather this storm and emerge, at the other end, much more lean, mean and competitive than it currently is."

The two companies employ 140,000 people in the US and 250,000 around the world.

GM has debts of $28 billion and a $20 billion pension fund hole. Chrysler owes $7 billion and has a $10.6 billion pension deficit.

Neither has cut debt enough since receiving bailout cash in December, according to the White House.