The White House has said it was not involved in the decision to replace Henderson.

Edward Whitacre, the GM chairman, announced at a hastily-called news conference at GM's Detroit headquarters after the board meeting that he will temporarily replace Henderson, while an international search for a new president and CEO begins immediately.

"Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change," Whitacre said, reading from a statement.

"While momentum has been building over the past several months, all involved agree that changes needed to be made."

Net loss

Two weeks ago GM said it has suffered a net loss of $1.15bn in the period since emerging from bankruptcy in July, and that it is making progress toward reviving its fortunes despite a prediction of more losses in the coming months.

"We now need to accelerate our progress ... which will also mean a return to profitability and repaying the American and Canadian taxpayers as soon as possible"

Edward Whitacre, GM chairman/interim CEO

Henderson took the helm at GM in late March as the auto giant was headed toward bankruptcy and living off massive aid from the US government.

Denying any involvement in the latest action, the Obama administration said in a statement that the "decision was made by the board of directors alone".

Whitacre, a former AT&T chairman and CEO who was installed as chairman of a new board controlled mainly by the US government, said daily operations "will continue as normal".

"I remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks," he said.

"We now need to accelerate our progress toward that goal, which will also mean a return to profitability and repaying the American and Canadian taxpayers as soon as possible."

Massive aid

Henderson had guided GM through bankruptcy with the company emerging on July 10 as a new entity backed by the US and Canadian governments.

The US government - which has provided some $50bn in financing - received a controlling stake of 60.8 per cent in the new firm called General Motors Company.

Canada, which provided $9.1bn in loans, has an 11.7 per cent stake and a United Auto Workers union retiree healthcare trust fund holds 17.5 per cent.

Once the world's largest corporation, General Motors sold more vehicles than any other automaker from 1931 through 2007, after which it lost the crown to Japan's Toyota.