Huffpost Business

GM's New CEO Announced: See The Details

Posted: Updated:

DETROIT — Ed Whitacre Jr. says the main reason he's taking over as permanent CEO of General Motors Co. is to bring stability to the top of the troubled automaker.

Whitacre, whose appointment was announced Monday, said although he's satisfied with the leadership team he's put in place, there's still work to do in sales and marketing, product development, purchasing and quality. Management experts say that means further changes and possibly more firings.

GM's board asked Whitacre to stay on as CEO after seven weeks of searching for a successor from the outside. Whitacre, a former CEO of AT&T Inc., doesn't expect any more big shake-ups, but said he plans to rearrange middle management, which totals about 23,000 people, mainly in the U.S.

Whitacre wouldn't name other candidates the board considered for CEO, but said he intends to stay two or three years, or "long enough to get it done." Details of his pay package will be released shortly. He now makes $350,000 a year as board chairman.

"The board looked at the potential candidates and decided that this place needs stability," Whitacre, 68, said at a Monday news conference. "We don't need any more uncertainty."

Had GM hired a new CEO, it would have been the automaker's fourth leader in the past year. The U.S. government, which owns 60.8 percent of the company following its Chapter 11 reorganization, ousted Rick Wagoner in March, then Whitacre replaced the next CEO, Fritz Henderson, on an interim basis in December.

Gerald Meyers, a former chairman of American Motors Corp. who knows Whitacre, said the move eliminates confusion among GM's ranks. Having an interim CEO paralyzes the organization because workers tend to lie low to wait for the permanent boss. But just because Whitacre is dropping interim from his title doesn't mean the search for a new CEO has ended.

Earlier this month the GM board hired Microsoft Corp. Chief Financial Officer Chris Liddell to take the same post at GM, and Whitacre said Liddell would be a candidate to take the CEO job. Whitacre said Monday that Liddell could still be CEO, but that's up to the board.

Whitacre often says in a folksy Texas drawl that he knows little about cars. But he's already shaken up the company by hiring Liddell, firing the Chevrolet and Buick-GMC brand managers, combining sales and marketing, consolidating control of GM's core North American market under one executive, and bringing in former lobbyists from AT&T.

Whitacre said he hadn't planned to become CEO when he was named chairman in July, but feels comfortable at the company and knows what changes need to be made.

GM also reiterated that it would repay the entire $8.1 billion loan portion of its debt to the U.S. and Canadian governments by June. GM repaid $1.2 billion in December, and Whitacre said the remainder would come in one payment, perhaps before June. After that, GM would still owe the U.S. government $45.3 billion, and it intends to repay much of it when GM stock is sold to the public, perhaps late this year.

Ron Bloom, who leads the Obama administration's auto task force, said GM decided to "commit irrevocably" to repay the loan before the end of June. Bloom called it "good news for the taxpayers, good news for the company."

The decision to permanently keep Whitacre was praised by James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Graduate School of Business. He's impressed with Whitacre's desire to shake up GM's culture of cumbersome committees that slowed decision making.

GM, he said, still doesn't understand where it fits into the world automotive market, what customers want and how its products relate to the competition.

"All layers of management at GM have been problematical," he said.

Whitacre was chairman and chief executive of AT&T and its predecessor companies from 1990 to 2007. During his tenure, he led the company through multiple acquisitions and sales, building it into a telecommunications giant.

He has told employees and reporters that he would rely heavily on former Wall Street analyst Stephen Girsky and Vice Chairman Bob Lutz for advice in running the company.


AP Auto Writer Dan Strumpf in New York and Associated Press Writer Ken Thomas in Washington contributed to this report.

Around the Web

Motor World: GM's new CEO Ed Whitacre gets cracking - Dec. 4, 2009

Meet GM's New CEO: Fritz Henderson - Deal Journal - WSJ

GM To Face Difficulties Recruiting New CEO -

Saab Loan Could Be Within Week After GM, Spyker Deal

Who would want to be GM's new CEO?