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Automotive Industry
AUTOS: GM CEO Steps Down As Profits Rise
Whitacre leaving top spot Sept. 1; automaker reports strong quarterly sales and profit.
Bob Golfen  |  Posted August 12, 2010   Detroit, MI
Workers complete final assembly of a Chevy Equinox at the CAMI plant in Ontario. Strong sales of the crossover SUV helped lift GM's second-quarter results. (Photo: Chevrolet)
General Motors CEO Ed Whitacre said today that he was stepping down from the helm on Sept. 1, timing his announcement to coincide with GM’s report of a strong second-quarter net income of $1.3 billion on increased production and sales of new vehicles in the U.S. and China.

Whitacre’s replacement will be Daniel Akerson, 61, a GM board member since July 2009 and like Whitacre, a longtime leader in telecommunications. Whitacre, who had planned his tenure at GM to be brief, will continue as board chairman through the end of the year, he said.

“My goal in coming to General Motors was to help restore profitability, build a strong market position, and position this iconic company for success,” Whitacre said. “We are clearly on that path. A strong foundation is in place and I am comfortable with the timing of my decision.”

Daniel Akerson, who will take over as CEO of General Motors in September, has been a board member since July 2009. (Photo: General Motors)
The CEO replacement and earnings announcements come amid speculation that GM will file for its first initial public offering within the coming days, according to the industry analysts at Edmunds.com. The analysts see mixed messages in GM’s results, with high incentives and deep discounts helping to drive sales.

“While the company has good news today, it’s hard to look at this data and see a definitive trend. Reestablishing credibility is achieved quarter by quarter,” said Edmunds.com CEO Jeremy Anwyl. “They’ve done a good job one year out of bankruptcy, but the job is not done and competition from Ford, Hyundai, Volkswagen and others is getting more intense.”

Akerson will be the fourth CEO at GM in the past 18 months, which included bankruptcy and a $50 billion federal bailout that resulted in the government owning 61 percent of the automaker. GM hopes to raise $12 billion to $16 billion in the IPO, which would be the second largest in U.S. history behind Visa’s 2008 offering of $19.7 billion.

GM plans to sell 20 percent of the government stake, which would reduce the U.S. Treasury to a minority owner, according to an Automotive News report.

GM’s second-quarter report showed a gain of $865 million in net income from the first quarter with total revenue of $33.2 billion, a 44 percent increase from the same quarter last year.

Strong sales of Buicks in China as well as the popular Chevy Equinox in the U.S. were credited with helping achieve the positive sales results.

"I am pleased with our progress on achieving our business objectives,” said Chris Liddell, GM vice chairman and chief financial officer. “We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow.”

Whitacre, the former chairman of AT&T, became GM’s CEO in December to replace longtime GM executive Fritz Henderson, who took the position when the automaker emerged from bankruptcy in July 2009. Henderson moved into the top position when Rick Wagoner was ousted by the government during bankruptcy proceedings.

Henderson was similarly removed from his position, and Whitacre started out as temporary CEO, later made permanent by the GM board.

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