Whitacre to Keep CEO Role, Says GM will Pay Back Loans by June
DETROIT — Edward Whitacre Jr. is keeping his post as both chairman and chief executive officer of General Motors, he announced to reporters Monday morning during a press conference at GM's Renaissance Center headquarters in Detroit.
He also said that GM will repay its loans from the U.S. Treasury and Canada/Ontario by June at the latest. And while acknowledging the "advanced talks" with Spyker in buying Saab, Whitacre said there was no deal to unveil at during the conference call.
As far as his decision to maintain his current role, Whitacre said his motivations "have not changed" and that he wants to continue to help GM in its stabilization. He didn't give a specific time length as to how long he would stay on the job, but would be there "for an adequate amount of time to get done what we need to get done."
"This is a great company. It has a terrific future and I'd like to be a part of it," Whitacre said to reporters. "I think the board looked at the potential candidates and decided that this place needed stability."
He added: "I certainly didn't come into this with that intention (to make it a permanent role), but as so often happens, you get in the middle of something and you start to like the people, you make some leadership changes, you feel comfortable with them, you feel very optimistic about the future … you sort of get pulled in."
GM's chief said he was pretty "well-set" as far as the top leadership team, but acknowledged the middle-level management could see some more rearranging.
"We have more work to do in the middle-level management," Whitacre noted. "Collapse is not the right word, rearrange perhaps is a better word."
He later added: "We have a lot of work to do everywhere, be it purchasing or development or quality. But I don't think you'll see any massive organizational changes. I think we'll be doing a lot of adjusting and fine-tuning from here on."
With regard to profitability, GM's CEO said he has been encouraged by the company's performance in January, both in its international operations and North America.
"Across the board, I think we have a lot to look forward to," he said.
And, GM may soon be looking forward to its initial public offering, something Whitacre called the next milestone.
"The timing of the IPO is contingent on a number of factors that need to be aligned before we go forward with that," he explained. "We want to initiate this as soon as possible, but we're only going to do it when the market conditions and internal conditions are right."
Additionally, as Monday night at midnight was the deadline for rejected dealers to file for arbitration, Whitacre was asked if there was a threshold, of sorts, where taking back a large number of dealers could slow the automaker's resurgence.
"I'm not sure it will weaken us. We'll just have to examine this and see the circumstances under which they were terminated and see what it looks like now and make some decisions going forward, but I'm anticipating we'll get through this and get through it real well … ," he noted.
"It's not going to slow our progress, I'm confident of that," Whitacre shared.
Reaction to Decision
Following GM's press conference, a few industry analysts offered their perspectives on Whitacre's decision to remain CEO.
Many seemed to suggest the decision was a smart one.
"His biggest challenge will be to break GM's silo thinking, and he is off to a good start," commented Jeremy Anwyl, CEO of Edmunds.com.
"Whitacre has proven himself to be a strong leader and fast learner," Anwyl added. "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."
Edmunds.com senior analyst Michelle Krebs emphasized how Whitacre maintaining his role is instrumental in the automaker's stability, something she said GM needs right now.
"I think keeping Whitacre in this role is a good plan. The last thing GM needs right now is its fourth CEO in less than a year," she explained. "More than anything, GM needs stability — stability in leadership, stability in direction — so that it can sell cars, boost market share, make money, get its financial house in order and go public again."
Meanwhile, James Bell, executive market analyst for Kelley Blue Book's Kbb.com, brought up the point that the respective chiefs of all Big 3 automakers are now "non-car guys."
As most know, Ford's Alan Mulally came to automaker from Boeing, and Chrysler chief Sergio Marchionne was an attorney before he joined Fiat in 2004, Bell pointed out.
"If any of these companies fail now or in the future, I can assure you that this particular 'car guy' credential for the job will be reintroduced as some sort of hindsight proof. But this will be unfair," Bell commented.
"Most of the devastating aches and pains that the Detroit 3 have endured over the last decade, including the bankruptcies of GM and Chrysler, were entirely self-inflicted thanks to insular and contrary cultures that chiseled away at their competitiveness," he continued. "Yes, the most recent economic tidal wave led to the ultimate filings, but the larger point is that GM and Chrysler already were highly weakened, leveraged and precarious … much like an ocean pier with a few broken legs and planks just before a hurricane."
The leadership of these three so-called "non-car guys" is pivotal in making sure this kind of thing doesn't happen again, Bell noted.
"These three 'outsiders' are now necessary to keep poisonous cultures from spreading again within these companies. The eternal battle between engineering, design, production and finance is great for creativity, but rarely able to police itself through to success," he continued. "Today's announcement by Mr. Whitacre should build confidence that GM is not falling back into bad habits anytime soon.
"And by the way, he also announced that all of the outstanding loans to the U.S. and Ontario governments will be repaid by June of this year. Progress is being made," Bell concluded.