General Motors Co. is getting its fourth chief executive officer in 18 months as the suddenly profitable auto maker continues its dramatic return from near-extinction and prepares to sell itself back to investors in a stock deal worth as much as $16-billion (U.S.).
Carlyle Group managing director Dan Akerson, 61, will succeed Ed Whitacre, 68, as CEO on Sept. 1 and chairman by year end, bringing what analysts called coach-style leadership and financial credibility on Wall Street to the company.
Mr. Whitacre, who spent just nine months at the helm, declared his job done at GM Wednesday after quickly returning the company to profitability in the year after it emerged from a $50-billion government bailout and bankruptcy protection.
"We've positioned the company for success. Things look good," Mr. Whitacre assured analysts and reporters on a conference call.
Analysts said the company's fortunes look bright enough after two straight profitable quarters that GM can move ahead with IPO. It has a fresh face in charge and a vastly better story to tell.
"You need a really good story and a receptive investor community," said industry analyst Joe Phillippi, who heads Auto Trends Consulting Inc. in Short Hills, N.J. "How receptive investors will be to GM remains to be seen."
A GM IPO would likely rank as the second largest in U.S. history, behind Visa Inc.'s $19.7-billion initial offering in March, 2008.
It would also pave the way for GM to emerge from government stewardship. The Canadian, Ontario and U.S. governments own a combined 61-per-cent stake in the company. Mr. Whitacre said recently the company will always bear the stigma of "Government Motors" as long as taxpayers own the company - comments that apparently irked the White House.
Mr. Phillippi said he expects the three governments to sell their GM stakes gradually - perhaps in several tranches - until they no longer hold any shares.
The company reportedly wants to sell at least 20 per cent of the governments' stake, taking the federal, U.S. and Ontario governments' ownership below 50 per cent and a clear majority. So far, the three governments aren't saying how much they would sell. And any decision might well depend on the price of the deal and whether they can recoup all the taxpayers' money sunk into the company.
Mr. Whitacre acknowledged Wednesday he was never in it for the long haul, and told the GM board as much when he took the job. "It was my plan all along to help return this company to greatness and that I didn't want to stay a day beyond that," he said.
Greatness may be a stretch for what was once the largest company in the world. But Mr. Akerson, a member of GM's board for the past year, takes over a company that's undergone a remarkable transformation and appears poised to rack up big profit numbers as car sales rebound, according to David Cole, chairman of chairman of the Center for Automotive Research in Ann Arbor, Mich.
"They're building a real earnings machine at GM," Mr. Cole said, pointing out that the company is making money at what are "Depression-level" industry car sales.
In the months since its quick journey through bankruptcy court, GM has slashed as much as $6,000 off the average cost of producing its vehicles, giving the auto maker a rare cost-advantage over key rivals, Mr. Cole pointed out.
"The magnitude of this turnaround is incredible," he added.
In Mr. Akerson, GM is getting a veteran private equity expert with a knack for orchestrating successful corporate turnarounds, particularly in the high tech and telecom industries, where he did stints as CEO of General Instrument Co., XO Communications and Nextel Communications. But Mr. Cole said Mr. Akerson isn't a complete stranger to the automotive business because he worked on Carlyle Group's purchase of Allison Transmission from GM in 2007, along with Toronto-based Onex Corp.
But Bob Lutz, a former vice-chairman of GM who retired earlier this year, said in an e-mail to the Associated Press that Mr. Akerson doesn't need auto experience to run GM because it has a solid management team of industry experts. But he does need to listen to that team, Mr. Lutz said
"He's very strong, very opinionated, not always right, and needs to work on listening skills," Mr. Lutz said.
Mr. Whitacre, who was already well past normal retirement age when he joined GM, probably wasn't the right guy for the rigours of an exhausting IPO road show to pitch the company to investors, Mr. Cole said. "I wouldn't blame him at all, given the rigours of what's ahead," he said.
On Wednesday, GM said it posted profit of $1.33-billion in the second quarter as vehicle sales and production increased, up from $865-million in the first three months of the year. Revenue increased 44 per cent from a year ago to $33.2-billion on growing sales of the Buick Excelle in China and the Chevrolet Equinox in the U.S., the company reported Wednesday.
GM lost $88-billion in the five years before it filed for bankruptcy protection last June.
Name: Daniel F. Akerson
Education: Bachelor's degree in engineering from the U.S. Naval Academy; masters in economics from the London School of Economics.
Personal: Married with three children.
Professional experience: Mr. Akerson will take over as CEO of General Motors Co. on Sept. 1. He joined the auto maker's board of directors in July, 2009. He is currently a managing director and head of global buyout at The Carlyle Group, a private equity firm headquartered in Washington, D.C., which he joined in 2003.
From late 1999 to 2003, he was chairman and CEO of XO Communications Inc. He was chairman of Nextel Communications Inc. from 1996 to 2001 and was CEO between 1996 to 1999.
He was CEO of General Instrument Co. from 1993 to 1995. Between 1983 and 1993 he held several roles at MCI Communications Corp., including executive vice-president, president, chief financial officer and chief operating officer.
Mr. Akerson served in the U.S. Navy from 1970 to 1975 on a destroyer. He sits on the board of American Express Co., Booz Allen Hamilton and Freescale Semiconductor.
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