By John Crawley

WASHINGTON, US (Reuters) - General Motors Co needs to overcome an entrenched corporate culture and blood new managers as it seeks to recover from its near failure, the former chief of the Obama administration's autos task force said on Wednesday.

Steven Rattner, in his most extensive comments on the unprecedented government-led restructuring, described former GM Chief Executive Rick Wagoner as a decent and honorable executive who, like the majority of other senior officials at the company, had risen through the ranks.

But to the task force, it seemed obvious that "any CEO who burned through US$44 billion (S$61.4 billion) of cash in 15 months should not continue," Rattner told an industry forum at the National Press Club.

The administration forced Wagoner to resign last spring.

"We did not feel GM was well managed. The culture is very insular. They basically thought the problems related to everything but management, in a way," Rattner said. "It needs a shake-up."

Few companies have changed their cultures without introducing "new blood," he added.

Rattner also said post-bankruptcy recovery efforts at GM and Chrysler, which has teamed with Italy's Fiat, would not be completed overnight and may not even be a sure thing.

"For Chrysler, the biggest challenges are its need to regenerate its product line up and to manage a significantly leveraged balance sheet," Rattner said.

Chrysler will unveil its new business plan next month.

Rattner said that Fiat management has done a good job so far of making fundamental corporate changes at Chrysler. He said GM has also made some progress, but the situation there is a much bigger job.

GOVT EXIT TO TAKE TIME

Rattner said it would also take time for the government to sell its stakes in both companies. He said the government has given GM and Chrysler the tools to be successful and provide good returns for their investors.

The US government has invested more than $60 billion in bailout and bankruptcy financing in GM and Chrysler.

Both are private. None of the investors, who include the government and the United Auto Workers Healthcare Trust, are considered long-term investors.

GM has said it could be ready for a public offering as early as next year. Rattner said such a deal could take more time to complete.

Rattner, a former journalist and founder of private equity firm Quadrangle Capital Partners, has said the automaker's current chief executive, Fritz Henderson, had been "enthusiastic" about his promotion and had asked not to be tagged as an "interim" choice.

"Fritz will be the first one to say he understands that he has to show the new board he's the man for the job," Rattner told reporters after his formal remarks. "No one signed any lifetime contract."

With the government holding 60 percent ownership in GM, the board was overhauled after bankruptcy. The new chairman, Ed Whitacre, came from outside the company.

In addition to Wagoner, top US sales executive Mark LaNeve and North American President Troy Clarke, whose job was eliminated in the restructuring, have left the company.

In response to Rattner, GM said it was focusing its "time and resources" on products and "creating a culture" that will lead to success.

"Looking back doesn't help us with the important work we have in front of us," the company said.

Wagoner, who retired in August with a package worth $8.6 million, has not commented publicly on his ouster or similar criticism by others about GM's management culture.

Chrysler had no comment on Rattner's remarks.