General Motors CEO Ed Whitacre stepping down, to be replaced by Dan Akerson
Friday, August 13, 2010
General Motors took an unexpected detour Thursday, as its chief executive said he is stepping down just days before the company plans to file what may be the biggest initial public offering of stock in U.S. history.
At the same time, GM announced its biggest profit in six years, a $1.3 billion turnaround quarter as the nation's top automaker prepares to pay back the government's $51 billion bailout a little more than one year after emerging from bankruptcy.
It's not typical for a chief executive to announce his resignation on the eve of an IPO, but that's what the 68-year-old Edward E. Whitacre Jr. did, saying he will be succeeded on Sept. 1 by Daniel F. Akerson, a GM director and a managing director of the Carlyle Group, a Washington private-equity firm. The Obama administration appointed Akerson, 61, to GM's board a year ago after forcing G. Richard Wagoner Jr. to step down as chief executive.
"My goal in coming to General Motors was to help restore profitability, build a strong market position and position this iconic company for success. We are clearly on that path," said Whitacre, the former AT&T chief who took over GM's top job in December after the board fired Wagoner's successor, Fritz Henderson. Henderson faltered in getting rid of unwanted company assets, such as Saturn and Saab, and was criticized for being a GM lifer, unable to make fundamental change.
"A strong foundation is in place and I am comfortable with the timing of my decision," said Whitacre, who will exit as chief executive in less than one month but will remain GM chairman through the end of the year.
GM's filing to sell shares of stock could come as early as Friday, with the launch itself coming later this year, according to sources close to the situation who spoke on the condition of anonymity because the company has not yet filed.
The government owns 61 percent of GM, which is hustling to shrug off the "Government Motors" tag. GM has paid back $7 billion of a government aid package worth $50.7 billion. The remainder of the payback will come from the history-making IPO, which some analysts guess will bring as much as $70 billion. To date, the largest IPO in U.S. history is the $17.9 billion offering by Visa in March 2008, according to data compiled by Bloomberg.
Unlike with the Wagoner sacking, both the government and GM said Whitacre's exit was decided solely by the company.
"The board advised [the government] of the decision, but they did not have to approve it," said GM spokesman Greg Martin.
Treasury Department spokesman Mark Paustenbach agreed. "Today's management changes were commercial decisions made by the General Motors board of directors and as such did not require any government approval," he said.
Tough critic of GM
Like Whitacre, Akerson has a background in telecommunications, having held top jobs at Nextel, MCI Communications and XO Communications. He joined the Carlyle Group in 2003 and is head of its global buyout division and a member of the firm's executive committee.
He became the chief architect of GM's bankruptcy after he was put on the GM board by former government "car czar" Steve Rattner a year ago, thanks to his experience in finance and turnaround management. Akerson was known as a tough critic of GM's internal attempts at a makeover, arguing that it did not go far enough to change the company's sluggish culture.