BREAKING: Ed Whitacre To Step Down As GM Chairman/CEO

Edward Niedermeyer
by Edward Niedermeyer

GM Chairman/CEO Ed Whitacre just announced during GM’s Q2 financial conference call that he will step down as CEO on September 1, and as Chairman at the end of 2010. GM board member Dan Akerson will take over both of Whitacre’s position. Whitacre called Akerson “very involved” and said he expects a smooth transition. Whitacre planned to leave after “returning GM to greatness,” and says that “with a good foundation in place,” he’s ready to leave. The board’s been aware of Whitacre’s plan, and the board was ready to act when Whitacre said he was ready to step down. Akerson says he and Whitacre “share a vision” for GM, so instead of setting an agenda now, he’s focusing on a smooth transition. Akerson noted that Whitacre “had made some management changes” already, and he’s confident in his “deep bench.” The major transition, he says, “is me,” because he needs to gain a day-to-day, operational perspective on the business.

All told, Akerson, who was Head of Global Buyout for the Carlyle Group before joining GM’s board in July of last year, seems to not have a clear agenda developed for his leadership of GM. Whitacre, it seems, was but the hatchet man, and having shaken up management, Akerson seems content to keep GM rolling along the path that Whitacre has laid out. Like Whitacre, he does not have industry experience, and a transition period in which he becomes familiar with day-to-day GM operations seems inevitable. Whether he eventually takes GM in a new direction won’t likely be clear until he has at least assumed the CEO job, as he notes that “Ed is still in charge right now.”

Whitacre emphasized that GM’s board knew that he didn’t plan on staying, and yet no effort appears to have been made to find a CEO from outside the organization. Why Akerson was selected was not clear, other than that he allowed the board to make an easy decision and a smooth transition. Overall, the perception seems to be that GM is profitable and under control, and that settling into cruise control makes perfect sense at this point. With GM making money in a weak market environment, and with 30-40 percent more production capacity available without a strong ramp-up in fixed costs, there’s a certain case for this perspective. On the other hand, Opel and Daewoo are still in deep trouble, unfunded pensions loom, and GM’s North American fleet sales are clearly being boosted by incentives and daily rental fleet sales. Akerson is going to have to show something other than a caretaker’s perspective if GM’s turnaround is going to overcome these obstacles.

Edward Niedermeyer
Edward Niedermeyer

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  • Blowfish Blowfish on Aug 13, 2010

    Wonder if he had missed the German imports?

  • BklynPete BklynPete on Aug 13, 2010

    I agree with Buickman that Whitacre deserves credit for instilling accountability and making tremendous strides in this country's 2nd most impossible bureaucracy (I'd rank the Federal Govt. as #1). I don't like the mindless GM-bashing that goes on here, but the skeptic in me is suspicious of the announcement's timing. Sure, I can accept that Big Eddie never intended to stay all that long. But 14 months? C'mon! I'm getting the same queasy feeling as seeing Bush in a jumpsuit declaring "mission accomplished," followed by High Fives and chest-thumping. Seriously, if Big Eddie really wanted to get the job done, why not go through the IPO, the Cruze and Volt launches, getting Europe sorted out, and the finding of a genuinely suitable long-term successor? The guy's rich and retired, and he's not in any rush to go elsewhere. If things are so hunky-dory at RenCen, who cares if he commutes from Texas for another year? I fear the 3rd and 4th quarter earnings will show some ugliness that Whitacre's looking to distant himself from. I really, REALLY hope I'm wrong, but Daanii2's liposuction comment may prove to be a fair one.

  • Verbal Here's a little tale about long-term Tesla ownership.In 2017 my buddy bought a three year-old Model S for $68k, which was the going rate at the time. He kept it garaged and treated it with kid gloves. It looked and ran virtually like new. The only problem he ever had with it was some kind of recurring issue with the driver's door handle. He never had to replace the brakes.A couple months ago, at ten years of age, the original battery finally bricked. Tesla quoted him $17k to do a battery replacement. But! If he replaced the battery, they would give him $11k in trade on a new Tesla!!! You don't have to be a math genius to see that those are crooked numbers.Using aftermarket parts is a non starter. Rebuilt batteries can be sketch. And the cap that goes on the battery is a Tesla-only part.Most people don't have $17k burning a hole in their pocket for a car repair. What are you going to do? Ask your credit union for a $17k loan to put a new battery in your ten year-old car? Good luck with that.A local auto recycler quoted him $1000. The recycler said that if he replaced the battery, the car would have a resale value in the low $20k's. That wouldn't give him enough headroom to make it worth his while. He said there are 150,000 dead Teslas in the national inventory (don't know where he gets this figure). And there's no demand for used Tesla parts, since most Tesla owners seem to treat their cars well. So Teslas with dead batteries have marginal scrap value.Thus, my friend's Tesla, with 80k miles on the clock and in excellent condition, with a dead battery, was scrapped. During his ownership, the car depreciated by around $800 a month.He saved a lot of money by not paying for gas, oil changes, tune ups, and consumables. But in the end, all those saving were erased by huge depreciation.Welcome to long term Tesla ownership, folks.(Cue the wailing and rending of garments from the Tesla fanboyz.)
  • Aja8888 My BIL had one of these years ago. great car!
  • Wjtinfwb Job cuts and EV's... is that a winning strategy? You're locked in to substantial labor expense after the UAW agreement signed a few months ago. And EV's ain't exactly flying off the shelves en masse. Get the new Charger out already, it's been teased more than the Bronco and Supra were combined. Get a real Hybrid option out for the RAM trucks and big Jeeps that consumers will buy. Consider bringing back a Gen 3 Hemi with an aluminum block, direct injection and perhaps a Hybrid option to counter the Toyota debacle and get a jump on GM. Dump the Hornet and build Dodge a version of the Jeep Compass they can actually sell. A Dodge with Alfa bones isn't compelling to either brands fans. Fix the Durango's oil cooler problems to avoid alienating police departments nationwide. Do you want every cop in the US driving an Explorer? Freshen up the Pacifica and get Chrysler a cool sedan or wagon that can create a buzz like the 300 did more than a decade ago. And fix your dealers, they are by a large jackasses. Plenty of opportunity for improvement.
  • 3-On-The-Tree True that’s the worst beat down in history.
  • Jalop1991 Tesla has made getting repairs a real headache for some owners, as the automaker hasn’t allowed them to get work done at third-party shops. That policy has led owners to seek  class-action status against the company,So, move next to the airport then complain about the noise.Got it.