Ford will start drawing on the loan by month’s end to retool factories in Michigan, Kentucky, Missouri and Ohio to produce more fuel-efficient models.

General Motors Co. and Chrysler Group LLC have pending applications seeking loans from the program.

The department plans to make additional loans under this program over the next several months to large and small automakers and parts suppliers.

Earlier this week, the Environmental Protection Agency and National Highway Traffic Safety Administration proposed increasing fuel efficiency standards by 4.3 percent annually between the 2012 model year and 2016 model year.

Those changes will cost the auto industry $60 billion and add about $1,100 to the cost of an average vehicle.

Chu said that the administration’s proposal essentially advances what Congress required in 2007, when it said fuel efficiency standards must be at least a fleet-wide average of 35 mpg by 2020.

“Our personal vehicles, we haven’t been making much progress,” Chu told a clean energy panel outside of Philadelphia.

“President Obama has increased the fuel mileage standards, advanced them by four years. We can do a lot more.”

Chu said “there’s some very exciting opportunities in American companies for electric hybrids and all electric cars.”

The administration last month awarded $2.4 billion in grants to boost electric vehicles and battery technology.

Pennsylvania Gov. Ed Rendell disclosed that CT&T, the South Korean company behind the all-electric e-Zone car and city EV, plans to build the vehicles in Pennsylvania and open distribution centers there.

The vehicles don’t go faster than 40 mph and are only for city use.

“It’s not a golf cart. It’s a real car,” Rendell said.

CT&T announced last week it would build the two small electric vehicles at a joint venture in Riverside County in southern California.

“I think electric cars are coming faster than anybody thinks,” Rendell said.

Wagoner, a 32-year veteran of GM, had a pension with total retirement benefits of about $20 million, according to a March regulatory filing. In all, Wagoner will take a more than 60 percent cut to the current value of his retirement benefits.

That’s consistent with cuts made to other retired executives. GM pension recipients who receive a total yearly payment of $100,000 or less will lose 10 percent of their payout. But former executives who collect a higher pension are seeing pension payouts reduced by two-thirds.

Under an arrangement reached between Wagoner and the old GM, he will receive $1.63 million annually for five years and $74,030 a year for the rest of his life.

Wagoner, who was fired by Obama as part of the automaker’s restructuring, remains on the payroll at $1 a year and will officially retire Aug. 1.

He also will receive personal umbrella liability insurance coverage until Jan. 1 — consistent with what other retired executives are receiving. Wagoner, who became CEO in 2000 and added the title of chairman of the board in 2003, also will get an existing life insurance policy or its cash value of $2.57 million.

The retirement agreement was assigned to the new GM in conjunction with an asset sale approved last week by a U.S. bankruptcy judge.

Wagoner’s total compensation since 2003 has been about $65 million, including $40.2 million over the past three years.

But amid a steep drop in the company’s stock price, the stock and options the automaker awarded to Wagoner declined dramatically. He was awarded $11.9 million in stock and options in recent years, but the actual value as of Dec. 31 was $682,000.

GM shares plunged even further in the months before the automaker filed for Chapter 11 bankruptcy June 1.

General Motors Co. emerged from federal bankruptcy court on July 10 after a rapid restructuring and $50 billion in federal aid.

GM also disclosed the identities of additional members of the old GM’s board of directors.

The old GM — now known as Motors Liquidation Co. — is headed by President and CEO Al Koch, who is vice chairman and managing director of restructuring firm AlixPartners. Koch is handling the sale and liquidation of the old company’s assets, such as the Pontiac, Hummer, Saab and Saturn brands.

On the board, he is joined by James Selzer, who is vice president and treasurer of the old GM. Selzer also is a director in the corporate turnaround and restructuring practice of AlixPartners.

Koch and Selzer will be paid $835 an hour and $555 an hour, respectively, filings show.

Their affiliated firm, APServices LLC, is entitled to a $13 million “success fee” since U.S. Bankruptcy Judge Robert Gerber approved the GM asset sale. The company also may be paid an undetermined fee by old GM, according to the regulatory filing. The financial terms are being discussed and are subject to approval by the bankruptcy court.

This month the old GM elected five new directors who will serve on the company’s board. They are: Stephen Case, who founded AOL but is no longer associated with the company; former Chrysler Group President James Holden; and Alan Johnson, Alan M. Jacobs and Wendell Adair.

The directors will be paid a $50,000 annual retainer, plus $3,000 per meeting.

The old GM will file periodic reports with the SEC outlining liquidation payments, expense amounts and other data.

Harvey Miller, GM’s bankruptcy lawyer, told Bloomberg Television on Tuesday that he expects the Obama administration’s auto task force to be disbanded in the next six weeks. “I really believe that by the end of August, the task force will be gone,” he said.

But administration officials have said the auto task force could be in business for several months.

He will be succeeded by Ron Bloom, a former adviser to the United Steelworkers union who worked with the White House auto task force alongside Rattner counseling U.S. Treasury Secretary Timothy Geithner.

“Ron Bloom will assume leadership of the task force’s activities as the government transitions its role away from day-to-day restructuring to monitoring this vital industry and protecting the substantial investment the American taxpayers have made in GM, Chrysler and GMAC,” Geithner said in a statement.

“We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC and support the American auto industry. I hope that he takes another opportunity to bring his unique skills to government service in the future.”

Sen. Carl Levin, D-Detroit, said Rattner “has done a very good job, and he made a significant contribution to a brighter future for the auto industry.”

Rattner played a key role in helping to achieve what the administration termed “quick-rinse” bankruptcies. Both automakers sold their best assets to new entities that emerged from bankruptcy much faster than most industry and legal experts expected.

“Rattner’s job was kind of to twist arms and get this thing through bankruptcy,” said Stephen Spivey, a senior San Antonio-based auto analyst with consulting firm Frost & Sullivan.

On March 27, when former GM Chairman and CEO Rick Wagoner was in Washington, Rattner took him aside and told him the president and Treasury Department wanted him to step down. GM President Fritz Henderson was installed as the new CEO.

The Treasury Department, which holds a 60.8 percent stake in the new General Motors Co., appointed former AT&T Inc. Chairman and CEO Edward Whitacre Jr. chairman of the GM board overseeing management.

At a news conference Friday, Henderson said management expected to deal less frequently now with the task force.

On Monday, Henderson said Rattner’s “expertise was a key contributor toward a new GM emerging in record time. His leadership of the auto task force helped support our making the difficult commercial decisions that are necessary to re-invent GM.”

The U.S. government has extended more than $80 billion in emergency loans to GM, Chrysler and their financing arms and has exchanged more than half of that debt for stock and warrants in the companies. It also established a revolving $5 billion loan program to help suppliers.

Rattner did not respond to an e-mail seeking comment. Bloom declined to discuss the change.

Some officials speculated that Rattner was in line for a big job in the Treasury Department. But his chances of confirmation dimmed when he was linked to a Securities and Exchange Commission investigation into payments made to an investment firm caught up in a kickback scheme involving New York pension funds. Rattner wasn’t accused of any wrongdoing.

Calling Rattner’s vision and leadership “invaluable to the task force’s efforts,” Geithner said there was still much to do to ensure GM and Chrysler come out of this process as stronger and more competitive companies.

“President Obama has made it perfectly clear that it is the responsibility of their private boards of directors and management teams to deliver that result,” he said.

GM and the administration’s auto task force have been negotiating with more than a dozen state attorneys general who have objected to the company’s plan to sell its desirable assets to a new, government-financed entity. A hearing to approve the plan is scheduled Tuesday in federal bankruptcy court in Manhattan.

The chief concern for GM and the government is whether customers who have claims about existing products but have not yet filed lawsuits can sue the company in state courts. Because bankruptcy case law is murky on the matter, GM and the auto task force chose to assume the liability instead of risking a delay of the company’s emergence from bankruptcy.

The negotiations were initially reported by The Wall Street Journal and The Washington Post.

Other legal responsibility, including previously filed product liability claims and the closures of GM dealers, are likely to remain tied to the GM entity that will be left behind in the bankruptcy.

Courts typically allow companies under bankruptcy protection to leave claims behind in bankruptcy and emerge with a clean slate, a precedent GM and the government are relying upon.

Chrysler, for example, which completed its own government-backed restructuring this month, left both product liability claims and unwanted dealers with its old estate, now known as Old CarCo. Claims left behind in bankruptcy generally have only a slim chance of being paid.

“While the sacrifices being made in this process — by workers, retirees, creditors, dealers, suppliers, communities and individuals injured by GM products — are painful, there is nothing exceptional about these bankruptcy terms,” said an administration official, who requested anonymity amid ongoing talks.

But GM raises questions because of its much larger size. Last year, GM set aside more than $900 million for product liability litigation.

An ad hoc committee of consumer complainants, which says it represents $1.25 billion in personal injury claims, has objected to GM’s plan.

Auto dealers, too, have complained that GM and the administration are improperly trying to use the federal bankruptcy code to overrule state laws meant to protect car dealerships.

The whole deal — an acquisition without cash, control with a minority stake, and the fact that it was brokered by government — is unusual, said Mike Boudreau, a director with Bloomfield Hills turnaround firm O’Keefe & Associates. “But it was necessary to protect the industry.”

It is a sign of just how desperate Chrysler’s plight was that Fiat was able to swoop in with an empty wallet after a two-year search failed to find a global partner.

Without a financial suitor to replace Cerberus Capital Management LP, Chrysler would have collapsed in the wake of the biggest industry sales downturn in 40 years.

The Obama administration defends the terms as the best option on the bargaining table.

“Fiat is going to be in a strong position to help with the restructuring of Chrysler in ways that will be mutually advantageous, and so we think it’s a desirable structure,” said Larry Summers, President Barack Obama’s chief economic adviser and co-chairman of the administration’s auto task force. “At the same time, we’re glad that there are a range of other stakeholders with ownership interests in the company.”

With credit markets frozen and the auto industry on the verge of collapse, posing a threat to the broader economy, turnaround experts say the noncash deal was the only viable option.
‘It does make sense’

“In this situation, it does make sense,” said Van Conway, president of Conway MacKenzie Inc., a Birmingham management and restructuring firm.

Today, offering stock and options to lure new management with little investment is common in business. And in the private sector, the amount of money invested and shares held is not always proportional to management control.

The majority stakeholder in the new Chrysler Group is the voluntary employees’ beneficiary association, a health care retiree trust run by the United Auto Workers.

The union from the outset said it did not want to be the majority shareholder — it was essentially forced to accept equity in the VEBA in lieu of a cash contribution the bankrupt automaker could not afford — and the union hopes to sell its shares as soon as possible. The union also has said it does not want to run General Motors Corp., where a similar VEBA will hold 17.5 percent of the automaker when it emerges from bankruptcy.

Chrysler Group LLC was created by combining certain assets of bankrupt Chrysler with Fiat, and the new company’s ownership breaks down this way: the U.S. Treasury with 9.85 percent, Canadian and Ontario governments with 2.46 percent, the UAW’s VEBA with 67.69 percent and Fiat with 20 percent.

Experts say it makes strategic sense for Chrysler to lean on Fiat at this time. “Fiat is the only shareholder that has automotive operating experience,” Conway said. “Not only will they (Fiat) run it, they will add to it.”

The Fiat deal is designed to allow the Italian automaker’s stake to grow to 35 percent over the next two years if it meets certain conditions, such as building small engines and vehicles for Chrysler in the United States, and distributes Chrysler products abroad.

The original tie-up agreement called for Fiat to have a 35 percent stake from the beginning, but the task force dictated the new terms that now have Fiat’s stake gradually increasing in 5 percent increments as it meets each condition.

Increasing Fiat’s stake will reduce the governments’ slice to 10 percent (8 percent for the U.S., 2 percent for Canada) and the VEBA will retain 55 percent.

The breakdown of Chrysler’s nine-member board also does not fall in line with the equity. Fiat initially gets three appointments, including CEO Sergio Marchionne — who doubles as chief executive at Chrysler — the Treasury department appoints four, and Canada and the VEBA appoint one each. Once Fiat reaches 35 percent equity, it can appoint a fourth board member, and a Treasury appointee would step down.
Stake can increase

Upon repayment of $6.6 billion in government loans keeping Chrysler afloat, Fiat can increase its stake to 51 percent between Jan. 1, 2013, and June 30, 2016.

The governance structure appeals to all parties.

For Fiat, the alliance dovetails with its global expansion goals but a lack of cash to execute it.

Fiat values the technology and engineering it is sharing with Chrysler at $3 billion, said Alfredo Altavilla, head of business development. Chrysler will have access to small car, small engine and diesel technology — all Fiat specialties. For Chrysler to duplicate the efforts from scratch would cost $8 billion to $10 billion, former Chrysler Vice Chairman Tom LaSorda said.

Chrysler also values the management services Fiat will provide, said spokeswoman Lori McTavish, noting Fiat was in the same financial straits five years ago that Chrysler is in now.

Marchionne is restructuring Chrysler along brand lines, similar to how Fiat is organized. But of the 23 people on Marchionne’s Chrysler management team, only three are from Fiat. But the deal is not risk-free for Fiat, which has rebounded from steep financial losses in the late 1990s and early 2000s. With Chrysler under its belt, its liquidity, management and CEO will be strained.

For these reasons, Standard & Poor’s Ratings Services said it is keeping Fiat on CreditWatch.

On a more positive note, “the new entity’s structure is designed to be leaner, and the debt burden has been reduced,” said credit analyst Barbara Castellano.

But the union disclosed that both the Obama administration and GM, during the course of negotiations aimed at restructuring the company, had sought to terminate the company’s underfunded hourly pension plan.

“At various points in the process, the company, the government and other creditor groups argued that the pension plan covering UAW retirees should be terminated,” the UAW said in a fact sheet urging its members to approve a labor concession deal.

The deal means that GM won’t seek to terminate its hourly pension plan, the union said.

GM also wanted to “freeze” its hourly pension plan, which would have prevented current UAW workers from earning additional years of service toward their pensions, the union said. “We successfully fought these efforts to terminate, freeze or otherwise restrict the benefits payable under the pension plan,” the UAW fact sheet said.

In 2007, GM froze its salaried pension plan, saving the company hundreds of millions of dollars.

GM spokeswoman Julie Gibson declined to comment on the UAW fact sheet, saying the company wasn’t discussing the deal until the union’s ratification vote due later this week.

She also declined to say if the company will seek to terminate its salaried or hourly pension plans if GM files for bankruptcy protection.

A person familiar with the matter said he didn’t expect GM to treat its salaried pension plan differently than its hourly plan.

A total of 673,000 people are covered by GM’s pension plans.

If GM terminated its hourly and salaried pension plans, the Pension Benefit Guaranty Corp. would assume $4 billion of the $20 billion that would be unfunded, the agency said.

In January, PBGC said GM’s plans are 20 percent underfunded. GM uses a different set of accounting rules and says its plans were underfunded by $12.7 billion as of Dec. 31.

Younger retirees would be hit hardest. They’d qualify for a much lower maximum pension if their company plan were assumed by the government — $18,900 a year at age 50. Retirees who are 65 can get up to $54,000 a year.

“A pension termination would have been devastating on UAW retirees, since the government’s pension insurance program does not guarantee full benefits,” the UAW fact sheet said. “Early retirees who are receiving the Social Security supplemental benefits would have seen dramatic reductions in their pensions.”

The Obama auto task force has warned that GM’s future pension costs — which include $6 billion payments due in 2013 and 2014 — are “unsustainable” and would require GM to sell 900,000 additional cars each year to meet the obligation.

In an interview last month, the acting head of the PBGC, Vince Snowbarger, said the auto task force has asked questions on “the impact on pensions of various things they have proposed” and the “mechanics of how we might take over a plan, what would happen to participants if we did have to take over the plans.”

“Our purpose is to let them know that there are other consequences to the kinds of decisions that they are making,” he said.

The PGBC was created by Congress in 1974 after the failure of the automaker Studebaker in 1963, which left 11,000 retirees with just 15 cents on the dollar on their pensions.

GM has spent $103 billion on pensions and health care costs over the last 15 years.

The program will cost automakers $1,300 per vehicle, a senior administration official said — a move that could cost automakers $13 billion to $20 billion annually based on total auto sales. That’s $600 ahead of the prior planned fuel efficiency increases.

Under a compromise, California and 13 other states’ efforts to impose a 30 percent reduction in tailpipe emissions are to be essentially adopted by the Obama administration and extended to the rest of the country. The federal government will set mileage standards that are consistent with those emissions requirements — 39 mpg by 2016 for cars and 30 mpg for light trucks.

Administration officials said the new requirements would save 1.8 billion barrels of oil and eliminate 900 million metric tons of greenhouse gases — equivalent to taking 177 million cars and trucks off the roads.

The move will force automakers to average 35.5 mpg overall by 2016 — four years ahead of a congressional deadline and require the companies to boost efficiency by an average of 5 percent per year. It is the first-ever U.S. regulation of tailpipe emissions, rather than simply setting fuel efficiency standards.

But Congress is planning to offer automakers billions more to help them meet the requirements. A revised 942-page version of a climate change bill released late Monday doubles to $50 billion a program to offer low-cost retooling loans to automakers and parts producers to help produce more fuel-efficient models.

The announcement is a major victory for California, though the state won’t get to run the program it has fought to impose since 2002.

It will also allow manufacturers to apply for government assistance for producing plug-in hybrids, and seek money to buy the expensive batteries that would be the heart of such vehicles. The bill creates new programs to aid electric vehicle production.

GM President and CEO Fritz Henderson and UAW President Ron Gettelfinger are among the auto officials who will be on hand Tuesday, along with Ford Motor Co CEO Alan Mulally and Daimler AG CEO Dieter Zetsche, for President Barack Obama’s Rose Garden announcement.

“GM is fully committed to this new approach,” Henderson said. “As the President has previously said, all stakeholders must come together and act with a common purpose and sense of urgency to address the nation’s energy and environmental priorities.”

James Lentz, president of Toyota Motor Sales, USA, Inc., said the Japanese automaker had long sought a coordinated standard for fuel economy and greenhouse gas emissions. “The big winner is customers,” Lentz said. “A unified national program ensures American consumers will have the choice of vehicles they want and need, as well as the fuel efficiency and low emissions they expect, without the potential confusion of multiple standards.”

Ford also praised the announcement.

California and many other states have long sought to impose their own tailpipe emissions standards, but were stymied by the Bush administration, which refused to grant them a waiver to do so under the Clean Air Act. Automakers fought in court for years to block the standards and lobbied government officials to stop them. The administration won’t immediately act on California’s waiver request, so it is unclear what will happen to the state’s initiative.

The Obama regulation, which is backed by major automakers, will order the Environmental Protection Agency and National Highway Traffic Safety Administration to work together to issue a joint regulation setting the new tailpipe emissions limits and mileage standards by next year

In addition to top officials from Detroit’s Big Three automakers, Gov. Jennifer Granholm and California Gov. Arnold Schwarzenegger, are expected to attend Tuesday’s announcement. Automakers will drop their lawsuits as part of the deal.

Officials said NHTSA and the EPA will work together to jointly issue regulations to ensure that the tailpipe emissions and fuel economy regulations are harmonized. Automakers will also be able to push for credits toward meeting tailpipe emissions requirements — as they currently have for fuel economy standards. The two agencies will also use NHTSA’s “footprint,” or attribute-based system, which considers a vehicle’s size, to set emissions requirements — something California’s rules didn’t include.

California officials declared victory.

“The Obama administration has brought together the federal government, the state of California, and the auto industry behind new national automobile emissions standards that follow California’s lead,” said Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works committee. “This is good news for all of us who have fought long and hard to reduce global warming pollution, create clean energy jobs, and reduce our dangerous dependence on foreign oil.”

Automakers get more flexibility to meet the yearly numbers — and more leeway in the early years of compliance. Most importantly, this deal appears to prevent California and other states from setting higher state standards in the future.

The Obama administration has been reviewing California’s request for three months. But the administration has been sympathetic to the concerns raised by automakers that two sets of standards would cause problems.

The deal may finally end a long-running dispute between California and Michigan.

Automakers have said state-by-state regulations would cost them tens of billions of dollars and fought California’s efforts for years — losing in three federal courts.

The new regulations take effect with the 2012 model year. In April, the Obama administration hiked the 2011 model year fuel efficiency standards to a fleet-wide average of 27.3 mpg.

In April 2007, the Supreme Court granted the EPA sweeping authority to regulate tailpipe emissions as a danger to human health. The EPA has proposed declaring tailpipe emissions a threat to human health and held a public hearing Monday on the issue in Virginia.

Greenhouse gas emissions from cars, light trucks and other vehicles in 2006 accounted for nearly 24 percent of U.S. emissions, with 94 percent of those emissions carbon dioxide, according to the EPA. U.S. autos accounted for 4.3 percent of worldwide emissions.

The historic filing, which came after a small number of Chrysler creditors balked at a debt restructuring, underscores the peril GM faces unless it can convince 90 percent of its bondholders to swap $27 billion in debt for a 10 percent stake in the company before a June 1 restructuring deadline, analysts said.

“When there is a lot of bluffing going on in any negotiation, this shows the government is serious,” said Jeremy Anwyl, chief executive officer of Edmunds.com.

GM, operating thanks to $15.4 billion in loans, is working to cut deals with all stakeholders and is racing to trim workers, brands, plants and dealerships in hopes of qualifying for billions in additional aid.

GM would not comment on what implications Chrysler’s bankruptcy filing could have on its own operations.

“GM remains focused on accelerating the speed of its operational restructuring and reducing the liabilities and debt on its balance sheet,” the company said.

Nonetheless, the Chrysler filing triggers an increasing level of concern that GM might be forced into Chapter 11 bankruptcy, said Paul Melville, an industry expert with consulting firm Grant Thornton LLP.

“It puts more uncertainty into the market,” he said.

GM and its bondholders remain far apart on a deal to swap billions in debt for equity in the automaker. Bondholders issued a counteroffer that would give them a 58 percent stake in the company for forgiving $27.2 billion in unsecured debt.

The counteroffer would save U.S. taxpayers $10 billion in cash, avoid nationalizing one of the country’s largest companies and treat all GM stakeholders equitably, said Eric Siegert, senior managing director of Houlihan Lokey Howard and Zukin, the financial adviser representing an ad-hoc committee of GM’s largest bondholders.

That is a stark contrast to GM’s proposal unveiled Monday, which would give bondholders a 10 percent stake, an offer labeled as unfair and one that bondholders and analysts said would yield pennies on the dollar. The exchange offer expires May 26.

Shares of GM climbed 11 cents, or 6 percent, Thursday to $1.92. In the last year, the stock price has lost 92 percent of its value.

The administration announced Thursday it is buying 17,600 fuel-efficient vehicles from Detroit’s Big Three by June 1, using $285 million from the $787 billion stimulus bill.

The government will order 2,500 hybrid sedans by April 15 as part of the purchase. Hybrid sales have collapsed as gas prices have hovered around $2 a gallon. Overall U.S. auto sales have fallen 36 percent in the first three months of the year.

“The problems that caused this economic crisis weren’t created in a day, and it will take time and hard work to get our economy back on track,” President Barack Obama said in a statement. “But I am 100 percent committed to a strong American auto industry, and we will stand with America’s auto workers and their families during these difficult times.”

All of the vehicles will be purchased from General Motors Corp., Ford Motor Co. and Chrysler LLC.

The effort comes after the government has loaned GM and Chrysler $17.4 billion in the past four months to stay afloat. The administration rejected their viability plans on March 30, giving Chrysler 30 days to complete a merger with Fiat SpA and GM 60 days to revise and toughen its viability plan. Obama also forced out GM Chairman and CEO Rick Wagoner on March 30.

Ford has not sought any federal assistance.

“By swapping out less efficient federal vehicles for new hybrid and fuel-efficient ones, this strategy will reduce gasoline consumption by 1.3 million gallons per year and prevent 26 million pounds of carbon dioxide from entering the atmosphere,” the White House said in a statement.

The government will use $15 million of the money for advanced technology vehicles for the government’s fleet. “Pilot programs will focus on commercially available compressed natural gas and hybrid buses, and all-electric vehicles,” the White House said, with those vehicles to be ordered by Sept. 30.

The law sets as a goal buying vehicles that are at least 10 percent more efficient on average than those being replaced.

“With cars like the Fusion Hybrid, Ford can deliver exceptional vehicle quality and fuel-efficiency to the U.S. government fleet through this initiative,” said Ford spokesman Mike Moran. “We appreciate the accelerated actions by President Obama.”

Michigan Gov. Jennifer Granholm welcomed the federal effort.

“This is good news for the American auto companies and the hundreds of thousands of families who rely on those companies for their livelihoods. Bolstering sales at these companies is the best way to protect jobs,” Granholm said.

In mid-December, Granholm called for accelerated purchase of American-made, fuel-efficient vehicles for the Michigan government auto fleet. Since that time, 1,435 orders have been placed.

Michigan lawmakers also praised the announcement.

“This is a welcome and important step that reflects the president’s commitment to the survival and revitalization of the domestic auto industry,” said Rep. Sander Levin, D-Royal Oak. “The federal government’s purchase of thousands of hybrids and other fuel-efficient vehicles from the Big Three shows that our domestic auto industry will weather this current crisis and build the cars of the future.”

GM did not confirm the news or comment on who might succeed Wagoner, 56, a GM lifer who became the company’s chief executive in 2000 and chairman in 2003.

But Obama told four Michigan members of Congress on a conference call Sunday that GM President and Chief Operating Officer Frederick Henderson would run the company for the time being, according to a source familiar with the situation. Henderson has been carrying out the company’s restructuring on a day-to-day basis and knows the task force leaders.

Industry experts credit Wagoner with pushing through profound reforms at the 100-year-old automaker, but his critics say Wagoner moved too slowly.

After losing $82 billion since 2004, GM is now subsisting on federal loans as it struggles to survive one of the most perilous stretches in its history.

The company has received $13.4 billion from the government and is seeking up to $16.6 billion more. According to a source familiar with the matter, Obama will provide GM with an unspecified amount of working capital over the next 60 days.

An Obama administration official said Sunday that the White House asked Wagoner to resign and he had agreed.

Most industry insiders were not entirely surprised, given the political mood.

“From the government’s perspective, they had to show a visible form of sacrifice,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor and the son of a former GM president.

Obama said earlier on Sunday he believed Detroit’s automakers could become competitive. “We think we can have a successful U.S. auto industry,” he said on CBS’s news show “Face the Nation.”

“But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean and mean and competitive than it currently is. And that’s going to mean a set of sacrifices from all parties —- management, labor, shareholders, creditors, suppliers, dealers,” Obama said.

He acknowledged that the automakers had taken measures to address “longstanding problems in the auto industry and the current crisis, which has seen the market for new cars drop from 14 million to 9 million.”

“Everybody’s having problems, even Toyota and other very profitable companies,” he said.

According to a source familiar with the situation, Obama told the Michigan lawmakers that no management changes were forthcoming at Chrysler. Chairman and Chief Executive Robert Nardelli has been in the job less than two years.

The administration also will provide working capital for Chrysler over the next 30 days as it moves to conclude an alliance with Italy’s Fiat SpA, a person familiar with the call to lawmakers said.