Thursday, 12 August 2010

GM CEO steps down on cusp of IPO filing

DETROIT (Reuters) – General Motors Co Chief Executive Ed Whitacre resigned on Thursday in an abrupt shift that came as the automaker hit the homestretch in preparing a stock offering to pay back its controversial bailout.
Dan Akerson, 61, a veteran private equity investor little known in the auto industry, replaces Whitacre as of September. Akerson had been appointed by the Obama administration as one of the directors meant to safeguard the government's $50 billion financing to restructure GM.

Whitacre's departure had been expected, but the timing of his announcement caught even insiders off guard, a day before the top U.S. automaker was expected to file the paperwork for a landmark stock offering just over a year after its emergence from bankruptcy.
Whitacre, who continued to commute from his home in Texas during his stint as CEO of the Detroit-based company, had said repeatedly he would be an interim leader.
Akerson, also a former CEO at Nextel, becomes GM's fourth chief executive in just a year and a half, underscoring the challenge in remaking an automaker still in the early stages of a turnaround.
"We still have important work ahead of us, but I am confident that we are building the foundation for GM's long-term success," Akerson said in a hastily arranged appearance at the end of a conference call to discuss the automaker's second-quarter earnings.
The question of Whitacre's tenure was raised at a GM board meeting about two weeks ago when former director Kent Kresa, 72, tendered his resignation, according to a person with knowledge of the private proceedings.
Kresa had been on the GM board since October 2003 and had reached the mandatory retirement age.
At the same meeting, Whitacre, 68, made it clear that he wanted to step down as CEO at the end of the year, about a month after GM is expected to launch an IPO on track to be one of the largest ever.
Board members asked Whitacre if he would consider committing to a longer term, but when he would not, the board turned to Akerson, who had been a candidate for the CEO post after the 2009 departure of former CEO Fritz Henderson, according to the person.
The U.S. Treasury said GM's board made the decision on the CEO change. Officials who asked not to be named said that there had not been any tension between Whitacre and the Obama administration on the direction of GM.

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