GENERAL MOTORS posted its biggest quarterly profit in six years yesterday and chief executive Ed Whitacre stepped aside on the cusp of an initial public offering (IPO) expected to allow the US government to relinquish its majority stake.
Mr Whitacre (68), who has served just eight months as chief executive of the top US car-maker, said he would resign on September 1st, to be replaced by Dan Akerson.
Mr Akerson (61), was named to GM’s board by the Obama administration a year ago when the car-maker was restructured in bankruptcy, with the help of $50 billion (€38.9 billion) of US government funding.
A veteran deal-maker and a managing director of the Carlyle Group for the past seven years, Mr Akerson spearheaded some of the private equity firm’s biggest recent deals, including the buyout of energy company Kinder Morgan.
Mr Whitacre’s departure had been expected, but the timing of his announcement caught even GM insiders off guard, just a day ahead of GM’s expected filing for a landmark stock offering.
Mr Whitacre, who continued to commute from his home in Texas during his stint as chief executive of the Detroit-based company, had said repeatedly that he would be an interim leader.
“It was obvious that I was not going to be at GM for the long haul,” Mr Whitacre said at the end of a conference call to discuss the company’s second-quarter earnings.
“We have put a strong foundation in place, so I am very comfortable with my timing.”
Mr Akerson, also a former chief executive at Nextel, will become GM’s fourth boss in just a year and a half, underscoring the challenge in remaking the corporate culture of an automaker still in the early stages of a turnaround.
Analysts said Mr Akerson’s appointment answered a question about chief executive succession for potential investors and gave GM an executive with deep financial experience to lead the upcoming roadshow for a stock offering expected by late November.
“I think it’s a very good move to deal with the issue of succession planning,” said Jeremy Anwyl, chief executive of car industry tracking firm Edmunds.
Separately, GM posted a second-quarter profit of $1.3 billion in evidence of a turnaround driven by cost-cutting in its 2009 bankruptcy, and better sales in the United States.
The second-quarter profit was the largest since 2004, when the US car market was still booming with annual sales of near 17 million vehicles, and GM’s brands accounting for more than one in four purchases of new cars and trucks.
The results reflected a 47 per cent snap back in global production from the depressed levels of a year earlier, when GM began operating under bankruptcy.
Revenue rose to $33.2 billion from $31.5 billion in the first quarter, boosted by higher sales of more profitable new models such as the Chevrolet Equinox.
Analysts expect the company to use the results to build the case for a record stock offering and allow the US government to reduce its 61 per cent ownership stake.
Europe, where GM is still struggling to restructure its Opel unit, remained a notable weak link for the automaker, with an operating loss of $160 million. – (Reuters)
