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The fall of General Motors Chairman and Chief Executive Officer Rick Wagoner was unavoidable. There is no way President Obama could hand out more billions to a management with a practically unblemished record of failure.

Yes, it's certainly good news; the Wagoner management was never going to turn around General Motors (nyse: GM - news - people ). Never. After all, Wagoner has been chief executive since 2000 and head of North American auto operations six more years before that. His predecessor and mentor, Jack Smith, became chief in 1992. GM lost market share in the U.S. in all but a couple of those years. The losses in Wagoner's last four years topped $80 billion.

Worse, GM seemed adrift in this crisis. Its European operations--and they are key to saving GM--seem to be without serious direction. In the U.S. we hear mostly of program cancellations, and the Vice Chairman Robert Lutz, the only real "car guy" in top management, is giving up and retiring at the end of the year.

But it might be a mistake to cheer Wagoner's leaving, because we don't know if his replacement will be any better. The second in command, the president and chief operating officer, is Fritz Henderson, and he is expected to succeed Wagoner, at least for now. Frankly, it is difficult to see what he did to become president of the once largest automaker in the world. Like Wagoner, he is a fairly colorless financial officer. But it's unfair to knock him before he's had a chance to do something.

What GM needs in this crisis, of course, is a spirited leader, a fighter, who can speak to the American people and convince us that GM is coming back. He's got to have a feel for the business, for the product, for the car buyer, and not just for the balance sheet. And he's got to be willing to wave the flag too in these desperate times. We're talking about the likes of Lee Iacocca, who brought Chrysler back, and George Romney, who saved American Motors. Finance men can be heroes too: Sergio Marchionne, who is leading the recovery of Fiat (nyse: FIA - news - people ), is a good example.

Rick Wagoner had some successes. The 0% financing offers after Sept. 11 might have kept the country out of a recession. He always pushed China. And hiring Robert Lutz, the retired president of Chrysler, to lead a GM product renaissance was an excellent move, although it showed how weak GM had become in products, so weak it needed an outsider to fix its cars.

But these strokes are overshadowed by the constant failures. Wagoner took over as chief of North American auto operations back in 1994. He was given the job by Jack Smith, although Wagoner knew nothing about the American auto business. He had been chief financial officer. At that time GM's U.S market share was 33%. The last month counted, February, the share was 18% and sinking.

And GM under Wagoner missed trend after trend: GM was late into crossovers, meaning sport utility vehicles built on car platforms, which are big thing now. GM was late into small SUVs, like Ford Motor's (nyse: F - news - people ) Escape or Honda's (nyse: HMC - news - people ) CR-V. GM was not only late in hybrids--it doesn't seem to understand that the lure is high miles per gallon, 40 to 50 miles per gallon. It's bringing out a Camaro now, years after Ford redid its Mustang and after Chrysler redid its Dodge Challenger. If anything represents GM vehicles under Wagoner, it might be the failed Pontiac Aztek, which was considered the ugliest American vehicle in modern days.

But Wagner's worst sin was to allow his company to build boring cars with outmoded engines and transmissions, just awful interiors and poor fits and finish. His administration showed disrespect for the product, the engineers who created it and the customers who bought it.

His administration allowed Toyota (nyse: TM - news - people ) to overtake GM and become the world's largest automaker, and next year it's likely that Toyota will become the No. 1 seller in the U.S. too. He not only lost the low and middle market to the Japanese, but he lost the luxury end to the Germans. GM's trucks and big SUVs were a success, but it was madness for a car company to ignore cars--and that was Wagoner's responsibility. By the time he realized that GM needed someone at the top who understood cars and hired Lutz it was too late.

To be fair, the latest collapse was caused by that $4 a gallon gasoline and then the recession, neither of which were of Wagoner's doing. But all those years of failure were.

He created the vanishing auto company. Oldsmobile closed; Saturn, Hummer, Saab and Pontiac to go.

How did he manage to stay on despite all the failures? First, the GM board of directors are pet rocks. Second, Rick Wagoner seemed to be a decent man. He didn't seem to pay himself grotesquely or live an obscene style. He had a pleasing personality. He just didn't understand the American car business. The Detroit and auto press were amazingly uncritical.

But he and his predecessor Jack Smith had created a management system that cut "car people" from top positions. And as GM suffered market share losses every year, the answer wasn't to create exciting cars to win back share but to go to the balance sheet to cut costs and sell off pieces of the company, like GMAC (nyse: GJM - news - people ), for cash.

Auto companies can be saved: In recent years Carlos Ghosn turned around Nissan (nasdaq: NSANY - news - people ) and Marchionne turned around Fiat. But the new billions from the government won't save GM, and all the recovery plans are meaningless. It will take leadership.

Shares of Lions Gate Entertainment (nyse: LGF - news - people ) also fell after hours, down more than 4% on the idea that billionaire Carl Icahn could gain control of the boutique movie company. Fitch analyst Jamie Rizzo told investors that if Icahn’s latest move to buy up the company’s convertible bonds succeeds, he'll have "effective control." 

Anadys Pharmaceuticals (nasdaq: ANDS - news - people ) is heading higher after hours. Shares are soaring, up nearly 8% in extended trading, on word the company is in late-stage partnership discussions about its experimental hepatitis C treatment. Anadys reports five companies have conducted formal due diligence and a couple more are scheduled.

Shares of National Beverage Corporation (nasdaq: FIZZ - news - people ) jumped more than 6% after hours on an 11% rise in profits on higher sales in the third quarter. The company says consumers are focusing more on value today, which boosts demand for its Shasta, Everfresh and LaCroix drink brands.

And Comscore released its data on top search engines for February. No surprise. Google (nasdaq: GOOG - news - people ) is the No. 1 search engine--leading the U.S core search market last month with 63.3% of the searches conducted. Yahoo (nasdaq: YHOO - news - people ) was next with 20.6%, while Microsoft (nasdaq: MSFT - news - people ) held 8.2% of the market,

Ask Network--which has been tailoring its marketing toward the racing audience, with prominent ads during televised NASCAR races--is in fourth place with 4.1% of the searches. AOL rounds out the top five with 3.9%. Overall, Americans conducted 13.1 billion searches, down 3% from January.

The future of General Motors has been called into question. On Thursday, a regulatory filing revealed that accounting firm Deloitte & Touche, the company's auditors, have "substantial doubt" the disturbed automaker can stay in business.

General Motors (nyse: GM - news - people ) confirmed Tuesday that it's nearing a resolution for its parts marker Delphi, which has been floundering in Chapter 11 bankruptcy protection since 2005. (See "GM Steering Delphi Out Of Chapter 11.")

Shares of GM fell 12.7%, or 28 cents, to $1.92, in early-morning trading. Over the past year, its stock value has lost 91.7%.

GM recently received $13.4 billion in federal loans, and it's hoping for a total of $30.0 billion. During the past three years, it has piled up $82.0 billion in losses, including $30.9 billion in 2008.

Deloitte & Touche attributed its warning to recurring losses from operations, stockholders' deficit and an inability to generate enough cash to meet its obligations.

GM said that its future depends on successfully executing the viability plan submitted to the government in February to justify the loans. "If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code," the company said in the annual report.

The Associated Press contributed to this article.

Unless demand for cars can be revived, it may not matter how much fat GM and Chrysler cut.

Stocks faltered again in New York Wednesday, as investors wrestled with viability plans from two of Detroit's automakers, digested the Commerce Department's latest report on the housing market and mulled the Obama administration's housing market plan.

After Tuesday's close, Chrysler and General Motors (nyse: GM - news - people ) filed restructuring updates with the Treasury Department. The reports were a condition of a $13.4 billion loan package that the carmakers received from the government late in 2008. Both companies said they are making progress, but will need additional loans to outlast the downturn in consumer spending that has crippled domestic auto sales. GM, which said it could need more than $30.0 billion by 2011 in order to remain on pace for sustainable profitability by 2012, gained 6 cents, or 2.8%, to $2.24 Wednesday. (See "Loans Can't Bridge Detroit Disconnect.")

The major averages opened higher on a reflex to a steep drop Tuesday, but less than an hour into the session stocks had slipped back into the red. The Dow Jones industrial average was down 60 points, or 0.8%, to 7,493; and the Nasdaq fell 11 points, or 0.8%, to 1,459; while the Standard & Poor's 500 lost 7 points, or 0.9%, to 782, threatening to test its Nov. 2008 lows.

The Treasury offered an outline of the housing plan Wednesday morning, which includes additional preferred stock purchase agreements with Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), help with refinancing and $75.0 billion for loan modifications that would include government subsidies for certain homeowners at risk of foreclosure. President Obama is due to explain the plan in Arizona later in the day. Earlier Wednesday, the Commerce Dept. said housing starts and completions were down sharply in January, as were permits for new building. (See "Fannie And Freddie Redux.")

Bond insurer MBIA (nyse: MBI - news - people ) announced it will split itself in two, establishing a separate public finance guarantee insurance company that will concentrate on municipal bonds. The move would shield the firm's muni bond business from its activities in structured finance and international bonds. Shares of MBIA gained $1.33, or 38.2%, to $4.81, early in the session.

Deere & Company (nyse: DE - news - people ) lost $1.66, or 5.0%, to $31.83, after the farm equipment maker's first-quarter earnings fell short of analyst expectations. On an encouraging note, Deere said it has not had trouble accessing credit to fund its own needs and financing for customers.

Federal Reserve Chairman Ben Bernanke will make a speech on the central bank's balance sheet in Washington Wednesday afternoon, and the Fed's minutes from its January monetary policy meeting will be released shortly afterward.

Thomson Reuters contributed to this article.

A parallel set of talks between Chrysler LLC and the UAW over similar concessions were continuing over the weekend but little progress had been made in the past week, a person briefed on those negotiations said.

The breakdown of talks at GM and the stalled negotiations at Chrysler come with just three days remaining until both automakers must submit new restructuring plans to the U.S. government as a condition of their $17.4 billion bailout.

At GM, the UAW negotiators walked away from the bargaining table because of differences over how to pay the health care costs of retirees. No high-level negotiations were underway as of Saturday afternoon, although some working-level discussions continued, the person familiar with the talks said.

"It doesn't seem like the stakeholders are really prepared to give a whole lot," said independent auto industry analyst Erich Merkle. "It's a high stakes game of poker right now."

General Motors Corp. said Tuesday it will cut 10,000 salaried jobs, citing the need to restructure itself with a government deadline looming and amid some of the worst sales in the auto industry's history.

The Detroit-based automaker said it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried U.S. jobs are expected to be eliminated.

The company's statement said that the separations would be done through GM's severance plan, so there would be no buyout or early retirement packages as GM had offered in the past.

In its plan to Congress submitted late last year, GM said work force reductions would be necessary in order for it to be viable for the long term. Most of the cuts are expected to take place by May 1.

GM said the cuts will vary by global regions depending on staffing levels and market conditions.

In addition, GM said it will cut the pay of most of its salaried U.S. workers beginning May 1 and continuing at least through the end of the year at which time the pay cuts will be evaluated.

The pay of U.S. executive employees will be cut by 10 percent, while other salaried workers will see cuts of 3 percent to 7 percent, GM said.

Christmas comes early for GM and Chrysler with $17.4 billion in aid, but many questions remain.

The White House has given Detroit an early Christmas present. Friday, President Bush announced the Federal government will provide immediate financial assistance to General Motors and Chrysler, which warned that, without aid, they might go out of business by the end of the month.

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush said.

Under the terms of the deal, the companies will receive $13.4 billion in emergency bridge loans. The money will be doled out from the $700 billion Troubled Asset Relief Program which the Treasury has at its disposal to alleviate the credit crunch. The companies will be eligible to receive an additional $4 billion in February. The bridge loans are expected to keep the companies afloat until at least March 31. If they have not been able to work out a viable plan for restructuring by that date, the administration will be able to recall the loans.

Without providing many specifics, Bush stressed that all parties involved--management, labor unions, creditors, bondholders, dealers and suppliers--will have to accept "meaningful concessions." Any money distributed from the TARP kitty includes restrictions on executive compensation and the ability for the government to take equity stakes in a company receiving assistance. Bush said bondholders will be forced to swap debt for equity and that workers will need to accept compensation "competitive" with foreign automakers operating in the United States.

In a statement, GM said the loans "will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success." Chrysler Chief Executive Robert Nardelli said that his company will receive $4 billion in immediate assistance, which will allow the company to "move forward with the restructuring and streamlining of our organization that we began in 2007."

Not everyone in Detroit is so happy. Rep. John Dingell, D-Mich., a staunch Capitol Hill ally of the automakers, applauded the government's bailout, but said "it is irresponsible during a time of economic crisis for the White House to insist that workers take further wage cuts on top of the historic concessions they have already made."

The administration's announcement comes barely a week after congressional talks to provide government assistance to the companies fell apart in the Senate. General Motors (nyse: GM - news - people ) and Chrysler were relying on the Bush administration as their last and best hope for a bailout. Ford Motor (nyse: F - news - people ), which had previous asked for a government-issued line of credit, was not seeking an immediate bridge loan.

Ford Motor is suffering from guilt by association. The automaker has $15 billion or so in the bank and billions more in credit lines, is not looking for a year-end bailout and still gets splashed with mud. Every day I hear the TV news people, the stars like CNBC's Maria Bartiromo, lump General Motors, Ford and Chrysler together as facing bankruptcy. In Ford's case, this is just not true.

Alan Mulally, the chief executive Ford imported from Boeing (nyse: BA - news - people ), has moved smartly since he gave up his wings. He mortgaged assets (for $24 billion) and signed up credit lines two years ago before all the current turbulence.

He also sold Jaguar, Land Rover, Aston Martin, some of Ford's Mazda (other-otc: MZDAF.PK - news - people ) stake and has put Volvo on the block. You can disagree or agree, maybe some of these operations could still have turned into winning assets, but Mulally decided Ford did not need the problems right now.

Unlike GM, Ford has no surplus car lines, which means it avoids both heavy spending to keep too big a lineup up-to-date and endless lectures from Wall Street know-it-alls who say to get rid of them. Excluding Volvo, which Ford hopes to sell, and Mazda Motor, in which it has only a minority stake, Ford has only two dealership channels in this country: Ford and Lincoln/Mercury.

Both Ford and GM are unlike Chrysler in that they have robust foreign operations. For Ford, Europe and South America earned $2.5 billion pre-tax in the first nine months this year. Those markets are slowing, yes, but they are strong businesses. Europe is providing the small-car knowledge and engineering that Ford needs in the U.S.

Yes, Ford has asked for a government-backed credit line, just in case the economic downturn gets much uglier, and is asking for some of the government cash that Congress already appropriated for updating plants and making fuel-saving vehicles. On the other hand, Ford is not begging for an immediate cash infusion to keep it afloat.

Long run, Ford has the ability to grow. For the past two months the Dearborn, Mich., manufacturer has held its own in share against the prior year, while the others slipped. The company even picked up share in November, to 16.4% of the industry sales versus 15.4% a year before. This is a good sign. If GM downsizes, Ford could end up bigger than GM in just a few years.

Wall Street was scuffling Monday afternoon, as cautious investors shied away from equity markets with the future of the U.S. auto industry in flux and the Federal Reserve's monetary policy committee gathering for a two-day meeting.

Investors are still waiting to hear if the Treasury will use Troubled Asset Relief Program funds to aid Detroit, after a $14.0 billion loan package for the car companies was shot down by the Senate. Judging by trading in the shares of publicly traded U.S. automakers General Motors (nyse: GM - news - people ) and Ford Motor (nyse: F - news - people ), investors don't expect the White House to allow them to fail. GM shares were up 19 cents, or 4.8%, to $4.13 Monday; Ford gained 9 cents, or 3.0%, to $3.13. Chrysler, which would have received $4.0 billion in loans under the rejected plan, is privately held.

The struggles facing the industry are not limited to the domestic automakers either. Japan's Toyota Motor (nyse: TM - news - people ) is said to be halting work on a Mississippi plant designed to build its hybrid Prius, once the current phase of production is completed, according to TradeTheNews.com. American depositary receipts of Toyota, which has already pumped $300.0 million at the Mississippi plant, were up $2.34, or 3.7%, to $65.54.

Aside from the positive automaker stocks, it was a red day on Wall Street. The Dow was down 83 points, or 1.0%, to 8,546; the S&P 500 lost 13 points, or 1.5%, to 866; and the Nasdaq fell 34 points, or 2.2%, to 1,507. Investors also had their eyes on the Fed, with expectations the central bank will take its benchmark interest rate down another half point, to 0.5%.

The move would be mostly symbolic, since the effective fed funds rate has been below the 0.5% threshold since October. Market watchers will be more interested in the statement accompanying the decision, which may hint at other methods of easing monetary policy beyond cutting rates, such as investments in Treasury bonds or expanded purchases of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) debt.

Treasury yields inched lower Monday, as investors moved out of stocks and into the perceived safety of government debt. The two-year note returned 0.75%, down from 0.77% Friday, while the 10-year note offered 2.54%, from 2.57%. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks a range of long-term bonds, was up 50 cents, or 0.4%, to $118.37.

Earnings will come back into focus this week, with reports from Wall Street survivors Goldman Sachs (nyse: GS - news - people ) and Morgan Stanley (nyse: MS - news - people ) on the agenda. Goldman, which is expected to report the first quarterly loss in its 10-year history as a public company Tuesday, was down $1.40, or 2.1%, to $66.34, in afternoon trading. Morgan Stanley lost 27 cents, or 2.0%, to $13.58, ahead of its report Wednesday.

Oil prices reversed course from early gains, as traders weigh the impact of an expected production cut from the Organization of Petroleum Exporting Countries. The cartel will gather in Algeria Wednesday, and is expected to slash output by at least 2.0 million barrels. Crude, up more than $3.00 earlier in the day, fell $1.33, to $44.95 a barrel.