FRIDAY, AUGUST 13, 2010
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Economy & Business General Motors chief Whitacre to exit Sept. 1, remain chairman gm from A1
wanted company assets, such as Saturn and Saab, and was crit- icized 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 Whit- acre, who will exit as chief exec- utive 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 Fri- day, with the launch itself coming later this year, according to sourc- es close to the situation who spoke on the condition of ano- nymity because the company has not yet filed. The government owns 61 per- cent of GM, which is hustling to shrug off the “Government Mo- tors” tag. GM has paid back $7 bil- lion of a government aid package worth $50.7 billion. The remain- der 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 sack-
ing, both the government and GM said Whitacre’s exit was decided solely by the company. “The board advised [the gov- ernment] of the decision, but they did not have to approve it,” said GM spokesman Greg Martin. Treasury Department spokes- man Mark Paustenbach agreed. “Today’s management changes were commercial decisions made by the General Motors board of directors and as such did not re- quire any government approval,” he said.
Tough critic of GM
Like Whitacre, Akerson has a background in telecommunica- tions, having held top jobs at Nex- tel, 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 turn- around management. Akerson was known as a tough critic of GM’s internal attempts at a make- over, arguing that it did not go far enough to change the company’s sluggish culture. “There are remarkable oppor- tunities ahead for the new GM,
and I am honored to lead the com- pany through this next chapter,” said Akerson, who was recruited to Carlyle by close friend and Car- lyle co-founder William E. Con- way Jr. because of Akerson’s front- line operations experience. “I knew he was a leader,” said
Conway, who called Akerson “one of the real stars of American busi- ness.” They met 28 years ago at MCI Communications, where Conway was the chief financial officer and Akerson, a 1970 graduate of the U.S. Naval Academy who served five years on a destroyer, ran one of the telecommunications com- pany’s big divisions. “People follow him. He is good
at hiring and firing. He knows how to build a business. Opera- tions. Finance. He had really done it. I thought he would be a big plus for Carlyle,” Conway said. Akerson lives in McLean, where he just built a new home. He is likely to keep the home, but leav- ing Carlyle for the job of chief ex- ecutive at General Motors will probably be a financial sacrifice. As a Carlyle managing director, Akerson makes millions a year. He is unlikely to match that com- pensation at GM, which will be under close scrutiny for years be- cause of the taxpayer bailout. While Conway bemoaned the loss, he said that no one — includ- ing himself — is irreplaceable and that Carlyle has a deep bench of candidates to succeed Akerson.
‘Big surprise’
Whitacre’s resignation stunned auto analysts. “It was a big surprise, and it caught everybody off guard,” said Jeremy Anwyl, chief executive of the auto Web site
Edmunds.com. “But when you step back, it makes all kinds of sense.” Anwyl said that part of an IPO is the “road show” — when the company’s top exec- utives travel the country, seeking investors. “If you’re doing a road show, investors are entitled to know who the managers are for the foreseeable future. Instead of dodging the question of succes- sion planning, GM is answering it in the most tangible way.” Whitacre’s short tenure raises a question: If his plan all along was to be a transitional leader, why did the board fire the previous transitional leader, Henderson? “At the time, Fritz provided nec-
essary leadership continuity as the company went through a pe- riod of great change,” GM’s Martin said. “But the board eventually decided that a new direction was needed to drive the company to a new level of urgency and decisive- ness not previously seen.”
Once the backbone of Amer- ican manufacturing, GM — like its nearby rival, Chrysler — now stands at a turning point. One year ago, both companies were emerging from government- backed bankruptcy on unsteady legs. Chrysler survived liquida- tion with a hasty marriage to Ita- ly’s Fiat, which now owns 20 per- cent of the company and has man- agement control. The government took a more direct interest in GM,
first sacking Wagoner, who is now a Washington Post Co. director, and taking a 61 percent owner- ship stake in the company. Ford was the only one of Detroit’s Big Three to pass up a government handout.
Earlier this week, Chrysler said
that it narrowed its second-quar- ter losses and that it plans to bring a small and popular Fiat model to the U.S. market later this year. GM, thanks to cost cutting
and solid sales among its four re- maining brands — Chevrolet, Cadillac, Buick and GMC — swung to second-quarter profit- ability.
At GM, even though 14 of 15 top
executive jobs have turned over during the bankruptcy, much of the lower management remains, raising questions about just how much the company has changed. “There is still clearly work to be done in stability and credibility,”
said
Edmunds.com’s Anwyl. Much will depend on the fate of
the 2011 Chevrolet Cruze, the first mass-produced new vehicle rolled out by the new GM. Starting at less than $17,000, the Cruze en- ters the crowded and competitive field of high-mileage compact family sedans, going up against Toyota, Honda and several other automakers.
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