One of the chief architects of a plan to bail out the Detroit auto companies said today that General Motors Chairman G. Richard Wagoner should be forced to give up his post as a condition of receiving emergency loans from the federal government.

"I think you have got to consider new leadership. If you're going to really restructure this, you have got to bring in a new team to do this, in my view," Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) said on CBS's "Face the Nation."

Asked specifically about Wagoner, Dodd said: "I think he has to move on."

Dodd's comments came as aides from his committee continued to meet with staffers from the House Financial Services Committee in an attempt to work out a proposal to speed at least $15 billion to the teetering car companies. Democrats hope to send a counterproposal later today to the White House.

The Bush administration is calling for a car czar within the Commerce Department who would be empowered to force the automakers to restructure or force them into bankruptcy. Democrats want to give the companies the money first, permitting them to survive through the end of March, and name an administrator later, "during the next 60 to 90 days," Sen. Carl Levin (D-Mich.) said on Fox News Sunday.

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Reuters

December 8, 2008 at 8:44 AM EST

DETROIT — — General Motors Corp. [GM-N]on Monday unveiled an unusually frank advertisement acknowledging it had “disappointed” and sometimes even “betrayed” American consumers as it lobbies to clinch the federal aid it needs to stay afloat into next month.

The print advertisement marked a sharp break from GM's public stance of just several weeks ago when it sought to justify its bid for a U.S. government on the grounds that the credit crisis had undermined its business in ways executives could never have foreseen.

It also came as Chief Executive Rick Wagoner, who has led the automaker since 2000, faces new pressure to step aside as GM seeks up to $18-billion (U.S.) in federal funding.

“While we're still the U.S. sales leader, we acknowledge we have disappointed you,” the ad said. “At times we violated your trust by letting our quality fall below industry standards and our designs became lacklustre.”

The unsigned open letter, entitled “GM's Commitment to the American People” ran in the trade journal Automotive News, which is widely read by industry executives, lobbyists and other insiders.

In the ad, GM admits to other strategic missteps analysts and critics have said hastened its recent decline.

“We have proliferated our brands and dealer network to the point where we lost adequate focus on the core U.S. market,” the ad said. “We also biased our product mix toward pick-up trucks and SUVs.”

But GM also says in the ad that it was hit by forces beyond its control as it tried to complete a restructuring earlier this year.

“Despite moving quickly to reduce our planned spending by over $20-billion, GM finds itself precariously and frighteningly close to running out of cash,” the ad says.

A failure of GM would deepen the current recession and put “millions of job at risk,” according to the ad, which also highlights the automaker's pledged restructuring and intention to begin repaying taxpayers in 2011.

GM spokesman Greg Martin said the ad was an attempt by the automaker to present “a pledge directly to the public.”

“We believe we need to deliver this commitment unfiltered since quite a bit of media commentary has not kept pace with our actual progress to transform the company,” Mr. Martin said.

Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut who is central to the effort to craft an auto bailout bill, on Sunday said GM should replace Mr. Wagoner. GM says Mr. Wagoner has the support of the company's board.

General Motors has cut off new product funding to its lame-duck Saturn brand, a source close to GM says. The automaker announced last week that, as a part of its bid for low-interest federal loans, it will close or sell its Saturn unit. Most analysts say that Saturn is of limited value, however, so it appears likely that the brand will close its doors for good soon.

Officially, GM said it will “explore alternatives” for Saturn, but given the weak sales the brand has endured despite a recent product renaissance, most analysts agree that the brand is worth little to another automaker.

Unfortunately for the automaker, simply dropping the Saturn brand is more expensive than it sounds. GM would likely spend upwards of $1 billion to buy out its Saturn dealer network, according to dealer broker Mark Johnson.

The automaker’s Franchise Operations Team, an eight dealer council, will meet with Saturn and GM executives Thursday and Friday in Detroit to discuss how Saturn could be made profitable, a Saturn spokesman told Automotive News.

That plan could conclude that Saturn cannot be made into a profit-maker in time for GM to start paying back the federal loans it’s banking on receiving.