GM names Edward E. Whitacre permanent CEO
General Motors Co. named Chairman Edward E. Whitacre Jr. its chief executive Monday, consolidating its two top positions in a wiry 68-year-old Texan known for his deal making in the telecommunications industry.
The automaker also said it would pay down a $6.7-billion loan from the government earlier than planned. GM said it would repay $5.7 billion in government bailout money by June 30. The payment follows $1 billion that GM repaid last month. The loan was not due to be repaid until 2015.
“We think it’s good news for the taxpayers, good news for the company,” said Ron Bloom, a senior advisor on auto issues to Treasury Secretary Timothy F. Geithner.
But the loan was only part of the $49.5 billion the government has invested in GM since late 2008. Most of that was converted into common stock, giving the federal government a 60.8% ownership stake in the company. The Obama administration hopes it can begin selling that stock in the last half of this year if GM launches an initial public offering, as the company plans to do.
Whitacre said one of his goals would be to sell GM’s stock in a public share offering so that the government would be able to divest its investment in the company.
GM is continuing its efforts to wind down its Saab division, the Swedish car brand, Whitacre said at a news conference Monday. But Saab still might avoid termination, unlike the Pontiac and Saturn brands that GM has killed as part of shrinking the company to focus on its Chevrolet, Buick, Cadillac and GMC nameplates.
Whitacre said GM was in “advanced talks” with Dutch supercar maker Spyker Cars but that there was no deal to announce.
The announcement of Whitacre’s added position ended a brief search for a new CEO that began when the board fired longtime insider Fritz Henderson in early December. Whitacre had been interim chief executive since then.
He joins Ford Motor Co. CEO Alan Mulally as the second industry outsider to head a Detroit automaker, and is seen as aggressively rebuilding the company to become a more effective competitor to Ford and a host of foreign manufacturers.
“His biggest challenge will be to break GM’s silo thinking, and he is off to a good start,” said Jeremy Anwyl, CEO of auto information company Edmunds.com. “Whitacre has proven himself to be a strong leader and fast learner. As he reviews the business, he’s grilling people on why they do things that they do, the way they do, as only an outsider can.”
Turning around GM, which filed and later emerged from bankruptcy reorganization last year, will be difficult, said Logan Robinson, a former general counsel for auto parts giant Delphi Corp. and now a law professor at the University of Detroit Mercy.
“Every individual who thinks about making a car purchase has to weigh what direction this company is headed,” he said.
They will be considering such factors as GM’s “reputation for being indifferent to quality,” the fact that most of its shares are now owned by the federal government, its bankruptcy filing and its penchant for “difficult relationships with all of its constituencies from the dealers to the union,” Robinson said.
Robinson said he wasn’t surprised Whitacre wound up with the CEO title.
“He built a large company in telecom. He’s been successful before and he’s convinced he can do it again,” Robinson said.
But Whitacre said he didn’t agree to join GM as a non-executive chairman with the intention of taking full control of the automaker’s daily operations.
“But as often happens you get into the middle of something and you like the people, you make some leadership changes . . . you get pulled in. One thing led to another, and here I am,” he said.
He said the board wanted to end the churning of top executives at GM and asked him to take the position last week.
“This place needs some stability. I guess that’s me,” Whitacre said.
Whitacre became temporary CEO in December after the board pushed out Henderson, who himself had been on the job for only eight months. Henderson had been named to GM’s top job in March after his predecessor, Rick Wagoner, was ousted by President Obama’s auto task force.
Upon taking the chairman’s post last year, Whitacre conceded that he knew almost nothing about cars. On Monday, he reported that he had taken a keen interest in the business.
“I like what I see here. I like the people. I like our products. I enjoy working here. We are all motivated for the right reasons: that is, to design, build and sell the world’s best vehicles,” Whitacre said.
Whitacre, whose nickname is “Big Ed” and whose hobby is killing rattlesnakes on his Texas ranch, made his name turning a small regional telecommunications company, Southwestern Bell Corp., into the national giant that is AT&T.
Times staff writer Jim Puzzanghera in Washington contributed to this report.
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