Ed Whitacre, who is currently the Chairman and Chief Executive Officer of General Motors Company, has announced he will stay on permanently as CEO at the request of the board. He also said that GM plans to repay their government loans by June of this year.
Whitacre served as chairman and CEO of AT&T at one time, took his position as GM’s interim CEO on December 1, 2009 when Fritz Henderson was asked to resign.
Two sources familiar with the matter said that GM’s board of directors had been discussing the possibility of making Whitacre’s position permanent for some time in order to provide clear leadership for the company. Whitacre said that the final decision was made in a special meeting that took place last week.
Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey , said, This takes away an air of uncertainty and lends some stability. This move tells the troops that Whitacre is the boss and everybody should put on their helmets and march forward.
Along with the permanent spot comes the responsibility for overseeing the turnaround that began before Whitacre’s arrival at GM in July of last year. After replacing Henderson as GM’s CEO in December, Whitacre began shuffling senior executives and hired a new finance chief.
For the Chief Financial Officer position, Whitacre chose Chris Lidell, who had been serving as CFO of Microsoft Corporation. He also made changes in GM’s management team and brought on two new executives from AT&T to oversee the automaker’s lobbying activities.
Phillippi said, The question is how long will Ed stay around? Liddell is obviously a candidate for the CEO job. Whitacre said he’ll remain in the position an adequate amount of time, possibly two or three years.
When Whitacre was brought on as interim CEO, some of his associates speculated that he might remain in the position as permanently.
Erich Merkle is president of Autoconomy LLC, an advisory firm in Grand Rapids, Michigan. He believes that the restructuring that GM underwent last year gives Whitacre an advantage over Ford Motor Company, which is currently led by CEO Alan Mulally.
Merkle said, The new CEO at GM will have an easier job than Mulally, given what the bankruptcy and government rescue has done to trim dealers, close plants and fix the balance sheet. Sure, GM can turn a profit, but will it be viable for the longer term? It’s too soon to know. That depends on whether the changes Whitacre is making are the right changes.
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