GM CEO To Step Down As Company Posts Profit
MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block.
Let's start with the good news. General Motors says it made $1.3 billion in the second quarter. That's way better than its first quarter profit of $865 million. And by the way, its CEO Ed Whitacre is leaving as of September 1st. A lot of people in the auto industry saw that second announcement as the bad news today. They worry that it's not good for GM and its initial public stock offering, which is just around the corner.
Michigan radio's Tracy Samilton reports.
TRACY SAMILTON: At the end of an earnings conference call for analysts and media, GM's CEO Ed Whitacre chimed in. His news, he'll turn over the CEO reigns as of September 1st to GM board member Dan Akerson. Whitacre says everybody knew, including the board, that he wasn't in this for the long haul.
Mr. ED WHITACRE (Former CEO, GM): My goal in coming to General Motors was to help restore profitability, build a strong market position and prepare this iconic company for success. Today we are clearly on that path.
SAMILTON: On the path? Yes, agrees Aaron Bragman, an auto analyst with IHS Automotive. But he's concerned that this change could really hurt GM, which has had three other CEOs in just the past year and a half, while it's recovering from a bruising bankruptcy. Especially because GM is preparing to announce an IPO an initial public stock offering that will enable the U.S. Treasury to get at least partly out of the business of owning an auto company.
Mr. AARON BRAGMAN (Auto Analyst, IHS Automotive): To announce this days before announcing the IPO, which is the ultimate goal here for restructuring GM and getting it back public again is, frankly, bizarre.
SAMILTON: Gerald Meyers, a former CEO of American Motors Corporation puts it even more bluntly.
Mr. GERALD MEYERS (Former CEO, American Motors Corporation): It's a mistake.
SAMILTON: Meyers says the potential investors in GM are likely to be shocked. And whatever you do, he says, don't shock the investors. He doesn't care if Whitacre, a long-time Texas native who came out of retirement to run GM, wanted to get back to the ranch.
Mr. MEYERS: Once he took the job, he didn't have any choice but to see it through, and he is not seeing it through. And I'm disappointed. I know Ed, he isn't that kind of guy.
SAMILTON: Many of the GM dealers contacted for this story today were getting the news for the first time from a reporter, and they weren't happy about that, nor about the change in leadership.
For his part, dealer Richard Genthe says he's not worried. Genthe doesn't know anything about Whitacre's successor, Dan Akerson, a senior executive at Carlisle Group. But he's confident that GM is now leaner and more focused on making great vehicles.
Mr. RICHARD GENTHE (Dealer): This is the type of talk that I hear, talk that I hadn't heard before. So that all bodes very well for us and I'm very optimistic.
SAMILTON: Ed Whitacre will stay on as GM's board chairman until the end of the year. Dan Akerson will assume that role as well once Whitacre leaves. Meanwhile, analysts expect GM to announce an IPO within days. The success of that IPO will determine how soon GM can lose the embarrassing nickname: Government Motors.
For NPR News, I'm Tracy Samilton in Ann Arbor.
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