GM Makes Profit, Loses CEO

Earlier today, General Motors announced the good news that it turned a profit of $1.3 billion last quarter — oh, and CEO Ed Whitacre will be leaving at the end of the month.

Whitacre, who has only been sitting in the CEO seat for a few months, will be replaced by board member Dan Akerson on Sept. 1. He will remain on as chairman of the board until the end of 2010, at which point Akerson will take over that job as well.

According to Whitacre, who took some heat earlier this year for his ads proclaiming that GM had paid back the federal government in full, says he had never intended on growing old at GM:

It was my plan all along … to help return this company to greatness, and I didn’t want to stay a day beyond that.

The Whitacre-to-Akerson transition appears to be a passing of the baton, as opposed to a change in direction, for the auto giant.

“Ed and I share a common vision for the company, where it is today and where we hope to take it in the future,” said Akerson, who said it’s premature to discuss changed he might make once he’s the CEO. “I have to get my feet on the ground before I discuss that subject.”

GM is still 60.8% owned by the U.S. government. However, an IPO is expected from the company at any time; that would allow the feds to sell off at least some of its stock.

GM CEO Whitacre to step down as company posts $1.3B profit [USA Today]

Comments

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  1. Oranges w/ Cheese says:

    Damn. 1.3 billion.

    I wonder how much money they’re giving Mr. Whitacre for the convenience.

    • Mr.Grieves says:

      Mhmmm.

      Seems like a smart guy, cash in on a fat severance payment then relax until he can come to the aid of another ‘ailing’ company.

  2. smo0 says:

    “Quit while you’re ahead…”

    Nothing wrong with that…. can’t be blamed for the fallout that happens after….

  3. UCLAri: Allergy Sufferer says:

    I sincerely hope that GM manages to reinvent itself into a serious competitor. I want to see whatever’s left of our manufacturing base remain viable. I also want to see the Volt succeed, given the possibility for long-term influence on how we view auto technology.

    • Oranges w/ Cheese says:

      The absolutely hilarious thing is that they’re realizing now they hamstrung themselves by shutting down all their plants. Now they have no operating capacity. Haha.

      • UCLAri: Allergy Sufferer says:

        I don’t find it hilarious. I find it unfortunate, because thousands of people lost their jobs.

        GM’s decline was not funny. It was one of the saddest effects of the recent economic crisis. Bad management or not, it’s never funny to watch the American manufacturing base get gutted.

        They shut down that capacity because they were dying on account of it. Better that they did that than be in even more dire straits than they were at the time.

      • Traveshamockery says:

        New car demand was down by literally half in the US over the past couple years. Shuttering plants was one of the critical ways in which GM had to cut costs to return to profitability. There was simply way too much supply flowing into the new car market.

        As demand slowly returns, so will their manufacturing base.

  4. dougp26364 says:

    Who would want to stay in a job with a government controlled salary when there are other opportunities available?

    • UCLAri: Allergy Sufferer says:

      Ever seen the GS pay scales? They’re pretty damn good. I could handle a fat GS-13 job.

  5. ShruggingGalt says:

    Who would be crazy to buy shares of GM stock? Especially after the way the previous shareholders AND bondholders were treated.

    I think he’s bailing before it hits the fan….

    • UCLAri: Allergy Sufferer says:

      The shareholders and bondholders were treated how people holding equity and debt usually get treated in bankruptcies.

      They got reamed.

      What’s new about that?

      • JayPhat says:

        I believe hes pointing out the fact that the bondholders, who by law get first access to assets in bancruptcy filings, got the shaft because the administration prefered giving those assets to the union pension plan instead.

    • AllanG54 says:

      I guess you don’t have any idea how many companies have gone bankrupt and then sold new stock. A few airlines have done it, including Delta.

  6. blinky says:

    Double win, GM got rid of its highest ranking employee to admit that he knows diddly about cars. Now maybe it can pay the government back.

  7. TailsToo says:

    Tell me that they’re profitable when they’ve paid the taxpayers back. If you give me tens of billions of dollars, I can show a nice profit too.

    • GearheadGeek says:

      They’ve paid back the loan part. The bigger chunk wasn’t in the form of a loan, it’s in the form of equity and “New GM” needs to do a successful IPO in order to buy out the government’s interest.

  8. ChemicalFyre says:
  9. rpm773 says:

    “It was my plan all along … to help return this company to greatness, and I didn’t want to stay a day beyond that.”

    Seems a little premature to go riding off into the sunset, Tex.

    • drizzt380 says:

      He’s old. When I’m 69 I’ll ride into the sunset when I damn well please. And stay off my lawn.

      Its not like he ran GM into the ground. He got made CEO after it was in the ground.

  10. jeffjohnvol says:

    2 reasons he’s leaving (speculating)

    1) He wants to get the government out of there and be private again.
    2) He didn’t have a deficit. That isn’t kosher with the federal government.

  11. Buckus says:

    GM just needs to go ahead and die. Seriously. They say they’re making changes, roll out a few semi-competitive vehicles a few years back, then discontinue half of them and don’t bother updating the rest to be competitive. After they IPO, they’ll be back to pushing numbers to inflate the stock value and looking only at the next quarter when it takes 3 – 5 years to get a vehicle into production. GM Bailout part 2?

  12. GearheadGeek says:

    Whitacre was already retired when he was asked to step in at GM and help turn things around. They needed an outsider because one of GM’s biggest problems was that a huge portion of their upper management had never worked anywhere but GM, and got into executive positions more by political skill than business acumen.

    He said at the outset that he had no intention of staying on for the long haul, that his job was to shepherd the company though restructuring and turn the reins over to a long-term CEO.

  13. NumberSix says:

    Am I correct in assuming Akerson is another old white guy?

  14. Jamfish says:

    Mission Accomplished!

    /eyeroll

  15. FrugalFreak says:

    He is going where? I try not to do business where he has left his mark.

  16. hansolo247 says:

    Were they profitable on a GAAP basis???

    This is not a public company, so we’ll never know.

  17. Conformist138 says:

    “It was my plan all along … to help return this company to greatness, and I didn’t want to stay a day beyond that.”

    Translation:
    “People won’t bitch about my getting a huge severance package for less than a year of work if I leave when we’re profitable and take credit for it all.”

  18. Tallorder64 says:

    The US Government owns 60.8% of the stock but GM is going to ship thousands of jobs to Mexico in the next ten years. Way to go USA. I’m sure glad you’re watching out for American workers. BTW-Tell me again how much tax revenue you can expect from those Mexican workers in those Mexican auto plants.