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Business

General Motors CEO steps down

Video by Mark Thompson

Text by News Wires

Latest update : 2009-12-02

US automobile giant General Motors (GM) has announced the resignation of its CEO Fritz Henderson (pictured). GM chairman Ed Whitacre has taken over as interim CEO while the troubled automaker launches an international search for a new president.

AFP - Troubled US auto giant General Motors made a sudden shift of direction Tuesday, ousting chief executive Fritz Henderson and replacing him with company chairman Ed Whitacre on an interim basis.

Whitacre made the announcement at a hastily called news conference at GM's Detroit headquarters after a board meeting where Henderson's resignation as CEO and company president was accepted.

"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. To this end, I have taken over the role of chairman and CEO while an international search for a new president and CEO begins immediately."

Whitacre, a former AT&T chairman and CEO who was installed as chairman of a new board controlled in large part by the US government under GM's bankruptcy plan, 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."

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.

He replaced Rick Wagoner, who was forced out of the job by the administration of President Barack Obama.

A statement from the Obama administration said of the latest action, "This decision was made by the board of directors alone. The administration was not involved in the decision."

The announcement showed fresh turmoil at Detroit's largest automaker, which last month reversed course on a decision to sell its Opel/Vauxhall European operations and then saw a deal to sell its Swedish-based Saab division fall apart.

GM said two weeks ago its suffered a net loss of 1.15 billion dollars in the period since emerging from bankruptcy in July. It said it is making progress toward reviving its fortunes, although it predicted more losses in the coming months.

GM said earlier Tuesday that US sales of cars and other passenger vehicles fell 2.2 percent from November 2008 to 151,427. The downturn followed an annualized rise of 4.0 percent in October.

The company is concentrating on its core brands of Chevrolet, Buick, GMC and Cadillac while winding down operations for Pontiac and Saturn and reaching a deal to sell the Hummer brand.

The Texas-born Whitacre, an engineer by training, in 1990 became the top executive of Southwestern Bell, one of the "Baby Bells" created from the antitrust breakup in the 1980s of American Telephone & Telegraph.

Through a series of mergers, Southwestern Bell became known as SBC and eventually bought its former parent, AT&T, which had been designated a long-distance calling company after the breakup. The new company then adopted the name AT&T.

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

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.

The US government -- which has provided some 50 billion dollars in financing -- received a 60.8 percent stake in the new firm called General Motors Company.

Canada, which provided 9.1 billion dollars in loans, has an 11.7 percent stake and a United Auto Workers union retiree healthcare trust fund holds 17.5 percent.
 

Date created : 2009-12-02

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