Stocks Plummet Early This Morning Over Rejection of Auto Industry Bailout

The Washington Post is reporting that all three major stock indexes have dropped more than three percent early this morning as a result of President Obama's administration telling Chrysler and General Motors that they have rejected their original bailout plans. The administration has instructed these auto industry powerhouses to redesign the structure of their companies in order to receive much needed federal aid.

Within the first hour of trading this morning, General Motors stock plummeted as its stock fell by twenty-five percent, according to The Los Angeles Times. It is currently being speculated that the biggest influential factor behind the drastic decline in stock value for General Motors is a widespread fear over the automaker potentially being forced to bankruptcy.

Rick Wagoner, who was the CEO of General Motors, was asked to step down from his position and he complied with the request. The decision that was made by the Obama administration to force these automakers to make significant changes to their companies is considered to be an unexpected and bold move.

According to The Los Angeles Times, Chrysler and General Motors have already received $24.8 billion in government loans, which is an astounding figure that likely would have led to a public backlash if the administration had granted the automakers' most recent requests for a bailout.