December 7, 2008 / 4:36 PM / 11 years ago

UPDATE 2-U.S. Sen. Dodd says GM CEO should move on

(Updates with GM, merger comments, Levin)

WASHINGTON, Dec 7 (Reuters) - General Motors Corp (GM.N) should replace its chief executive if it receives emergency government loans to avert likely collapse, a U.S. senator drafting bailout legislation said on Sunday.

Another senior Democrat involved in the matter said negotiators expected a final deal by Monday, but he was less sure whether there was enough support in Congress to help GM, Ford Motor Co (F.N) and Chrysler LLC.

“Obviously, that’s a much more complicated question as to whether the votes are there,” Sen. Carl Levin of Michigan told “Fox News Sunday.”

Senate Banking Committee Chairman Christopher Dodd of Connecticut said on CBS’s “Face the Nation” that GM and Chrysler, also facing a likely near-term bankruptcy without help, should probably merge.

“I think it’s clear GM is in the worst shape. Chrysler is, I think, basically gone,” Dodd said as Democrats and the White House continued negotiations on terms for a $15 billion bailout of the distressed industry.

GM and Chrysler recently explored a merger.

Dodd said management changes have to be part of conditions for a bailout to help the companies restructure, but that does not mean an across-the-board housecleaning.

“Ford is fairly healthy, so we don’t want to brand all of these companies exactly the same way,” Dodd said.

Dodd agreed with suggestions by fellow lawmakers that GM should probably consider replacing CEO Rick Wagoner and restructure with a new team.

“I think he has to move on,” Dodd said.

Auto industry management has been criticized in Congress for failing to innovate and take other steps to better position their companies to compete against leaner foreign competitors and weather financial downturns.

Wagoner has risen through the management ranks since joining GM in the late 1970s and is the longest serving chief executive at the Detroit Three companies.

He became president and chief executive in 2000. He now serves as chairman and CEO.

Ford’s Alan Mulally and Chrysler’s Bob Nardelli are recent arrivals.

Wagoner says he serves at the pleasure of the GM board and hopes to stay on to see GM through its worst crisis.

In response to Dodd, a company spokesman said Wagoner has the support of company employees, suppliers and dealers.

“Its board of directors all support Rick Wagoner and is confident he is the person to lead GM through these difficult times,” spokesman Steve Harris said.

Reporting by Donna Smith and John Crawley, editing by David Wiessler

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