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New CEO for Revived GM

August 12, 2010
3 min to read


General Motors Co. said it would replace its chief executive with a board member lacking automotive experience but well-regarded on Wall Street, a move whose timing was surprising and appears designed to pave the way for the car maker's return to the public stock market, The Wall Street Journal reported.


GM said Daniel Akerson, a 61-year-old director known for his work as a telecommunications dealmaker, will take over as CEO on Sept. 1. He will replace Edward E. Whitacre Jr., a former AT&T Inc. chairman and CEO brought out of retirement by the Obama administration a year ago to lead the company out of its U.S.-financed bankruptcy reorganization.

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Whitacre, 68, will remain chairman until December, when he will cede that title to Akerson as well.


The leadership change was announced after GM reported net income of $1.3 billion for the second quarter, on the strength of rising vehicle sales, especially of trucks, and firmer pricing in North America. It follows a profit of $865 million in the first quarter, and is GM's best showing since 2004's second quarter.


The change atop the nation's largest carmaker is part of a plan put in place by GM's board over the last few weeks to enable the company to present a clear picture of its management team to investors as it looks to return to the public markets and allow the U.S. to cash out its 61 percent ownership stake.


Whitacre has long said he planned to step down after GM offers shares to the public.


"At this stage of my career, it was obvious that I was not going to be at GM for the long haul," Whitacre said. "This is something the board and I have been contemplating, literally since I joined GM."

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People familiar with the matter said the move was decided by GM's board without input from the U.S. government, which put more than $50 billion into GM to save the company.


Whitacre's departure, however, was announced as some tension was building between the company and Washington, people familiar with the matter said. The Obama administration would like GM to hold a stock offering soon, perhaps even before the midterm elections in November, while GM hasn't committed to such a timetable.


A GM IPO would likely give President Barack Obama grounds to claim that the bailouts of GM and Chrysler Group LLC are working, especially in key election races in the Republican-leaning states where skepticism of the bailout runs high.


The U.S. is expected to sell at least $10 billion of its shares in the company in an IPO, said a person familiar with the situation.


Last week Whitacre publicly expressed a preference for taking more time to prepare for a stock offering, and for having the government sell a major stake in the company so that GM can shed the image of being on government support.

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Akerson, who has served as a managing director at the buyout firm Carlyle Group since July 2009, is known as a decisive, hard-nosed and often unforgiving manager—qualities that appealed to members of the Obama administration's auto task force when they recruited him to join GM's board last summer. Akerson declined to comment.

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