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GM chief executive Whitacre to step down amid IPO speculation

Text by News Wires

Latest update : 2010-08-12

General Motors announced Thursday that CEO Ed Whitacre will step down in September as the largest US car manufacturer prepares to relist on the stock exchange after receiving $50 billion in government funds for bankruptcy restructuring.

AFP - Riding high on a 1.3 billion dollar quarterly profit, General Motors announced Thursday that Ed Whitacre will step down as CEO next month as the biggest US automaker prepares to break free from government control and relist on the stock exchange.
   
Revenues and profits swelled under Whitacre, 68, who was brought out of retirement last year by the Obama administration to lead the troubled company as it entered government-financed restructuring under bankruptcy protection.
   
"It was my public duty to help return this company to greatness and I didn't want to stay a day beyond that," said Whitacre, announcing he will step down as CEO on September 1 and as chairman of the board by the year-end.
   
"We've positioned the company for success and things look good. There's a foundation in place, a good foundation. I see no reason to delay."
   
Whitacre, the long-time head of telecom giant AT&T who took the helm of GM on December 1, 2009, expressed confidence in successor Dan Akerson, who had no previous experience in manufacturing before joining the GM board when it emerged from bankruptcy in 2009.
   
"I know Dan will do a terrific job of leading this company forward," Whitacre said in a conference call.
   
"He has a great team around him and the complete support of the board and GM's employees... I think he's absolutely the right choice."
   
GM is widely expected to register its plans for an initial public stock offering with securities regulators on Friday after having reportedly secured a five billion dollar line of credit.
   
Its drive for an IPO will be boosted by news that the firm's revenues swelled to 33 billion dollars in the second quarter, a third more than the same period last year.
   
The firm reported stronger sales in North America in the quarter Thursday, even as sales in Europe floundered and market share around the world sank.
   
The timing of Whitacre's announcement was no accident, said Jeremy Anwyl, chief executive officer of automotive site Edmunds.com.
   
"GM wants the issue of succession planning off the table," Anwyl said.
   
GM executives declined to comment on the upcoming IPO, which will allow the US government to begin winding down its massive stake in the company.
   
The Treasury Department still owns 61 percent of GM, which received 50 billion dollars of government financing for its bankruptcy restructuring that led to mass layoffs, plant closures and wiped out billions of dollars in debt.
   
GM as well as its US competitors Ford and Chrysler were hard hit by the recession which struck the United States in December 2007, caused by a home mortgage meltdown.
   
Of the so-called Detroit Three automakers, Ford was the only one to avoid bankruptcy, managing to stay afloat thanks to massive loans it had obtained prior to the credit crunch and because it moved more quickly to revitalize its product portfolio.
   
Whitacre said he was proud of GM's progress under his stewardship and insisted that the transition to Akerson's leadership would be "seamless."
   
"Dan has played a big role in the key decisions and changes at the new GM," Whitacre said in a conference call.
   
"Dan brings broad business experience, decisive leadership and continuity. The transition will be smooth and he will build on the positive moment we've established."
   
Akerson, 61, joined the GM board after a distinguished career in finance as a managing director at the Carlyle Group and in telecommunication, serving as chairman and chief executive officer of XO Communications and at Nextel Communications.
   
He was also chairman and CEO of General Instrument Corp.
   
Akerson said he shared Whitacre's vision for the company and has few major changes in mind, but declined to detail his plans until he officially claims the top spot.
   
"Ed's vision of simplifying the business, of giving people the authority and accountability to do their jobs and keeping them focused on designing sand building and selling the world's best vehicles has served the new GM extremely well," he said in a conference call.
   
"I expect this will continue to drive our success going forward."
   
 

Date created : 2010-08-12

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