The General Motors Corp. (GM) restructuring plan submitted to the U.S. government isn't viable and contains overly optimistic assumptions on market share and price, Obama administration officials said Sunday.

While GM "has made meaningful progress in its turnaround plan over the last few years, the progress has been far too slow, allowing the company to continue to lag the best-in-class competitors," according to Obama administration documents analyzing GM's restructuring.

"However, it is important to recognize that a great deal more progress needs to be made, and that GM's plan is based on fairly optimistic assumptions that will be challenging in the absence of a more aggressive restructuring," the documents said.

The White House released a five page summary that addresses viability of GM's restructuring plan submitted to the U.S. government on Feb. 17, 2009.

The summary said GM not met conditions of the loan agreement but "it is strongly believed, however, that such a substantial restructuring will lead to a viable GM." GM CEO Rick Wagoner will step down as part of this process. In addition, the Obama administration has said a quick and prearranged bankruptcy filing may be the best path for GM to restructure.

The Obama administration said it will provide an unspecified amount of working capital to GM for 60 days "to develop a more aggressive restructuring plan and a credible strategy to implement such a plan."

GM and Chrysler LLC have a Tuesday deadline to show that they are on the road to viability. The auto makers received $17.4 billion in government assistance last year. GM is seeking $16.6 billion more, and Chrysler wants $5 billion more.

"General Motors is in the early stages of an operational turnaround in which the company has made material progress in a number of areas, including purchasing, product design, manufacturing, brand rationalization and its dealer network," the White House said.

GM made progress by revamping its global purchasing agreements, refining its vehicle product design process, creating greater manufacturing flexibility and streamlining its various brands by divesting or shutting down Saab, Saturn and Hummer, the White House said.

The administration faulted GM for its assumptions in its business plan, saying its projections are too optimistic for market share, price, brands and dealers, outlook for its European operations, product mix and legacy costs.

"As a result, the president's designee has found that General Motors' plan is not viable as it is currently structured," the White House said. "However, because of GM's scale, franchise and progress to date, we believe that there could be a viable business within GM if the company and its stakeholders engage in a substantially more aggressive restructuring plan."

The report took issue with GM's projections for market share. It said GM has been losing 0.7% per year for the last 30 years.

"Yet, in its forecast, GM assumes a much slower rate of decline, 0.3% per year until 2014," the report said. That slower rate of decline comes even though GM's plans for "reducing fleet sales and shuttering brands which represent a loss of 1.8% market share, of which only a fraction will be retained."

On cash flow, the report said "even under the company's optimistic assumptions, the company remains break even, at best, on a free cash flow basis throughout the projection period, thus failing the fundamental test of viability."

It said under its own plan, GM generates $14.5 billion of negative free cash flow over its six year forecast period.

"Given the highly challenging current market, the company is already behind plan in its overall volume expectations and market share for calendar year 2009," the report said.

"Since the company has built a plan with little margin for error, even slight swings in its assumptions produce significant and ongoing negative cash flows."

The administration said GM failed to meet three key conditions required by March 31, including modifications to its labor agreements, changes to a retiree health care trust fund, and a restructuring with bondholders.

-By Rob Wells, Dow Jones Newswires; 202-862-9272; Rob.Wells@dowjones.com