DETROIT — In a surprising development, GM’s chairman and chief executive, Edward Whitacre Jr. announced Thursday that he would step down as chief executive on Sept. 1 and be succeeded by Daniel F. Akerson, a G.M. board member and a managing director of the Carlyle Group. þþMr. Whitacre will stay on as chairman until year end, when Mr. Akerson will assume that role as well. þþ“We’re going to have a smooth, seamless transition here,” Mr. Whitacre said. þþThe announcement came shortly after General Motors said that it earned $1.3 billion in the second quarter and cited sustained progress in rebuilding operations after emerging from its government-sponsored bankruptcy last year. þþMr. Whitacre, the retired chief of AT&T, had previously expressed a desire to leave G.M. once the company stabilized, but the timing of his announcement was a surprise, as was the choice of Mr. Akerson, a former chairman of Nextel Communications, as his successor. þþMr. Akerson said on the conference call that he did not anticipate major changes in strategy when he takes over from Mr. Whitacre. “We share a common vision for the goals and objectives of this company,” Mr. Akerson said. þþThe quarterly profit marked G.M.’s strongest financial performance since 2004, and set the stage for the automaker to file for an initial public offering, possible as soon as Friday. It was G.M.’s second consecutive quarterly profit. þþThe automaker’s results were a marked improvement over the $865 million profit in the first quarter. Revenue also rose in the quarter, to $33.2 billion, from $31.5 billion in the first. G.M. did not report second-quarter results a year ago because it spend part of the period reorganizing under bankruptcy protection. þþThe second-quarter profit was driven by strong results in G.M.’s core North American business, which had lost money for several years leading up to its bankruptcy filing. þþGM said it had earnings before interest and taxes of $1.6 billion in North America during the quarter, a 33 percent improvement over its first quarter performance. The company’s European unit lost $200 million in the quarter, and its other international operations earned $700 million. þþThe automaker also added to its cash reserves in the quarter, another sign of its improving financial stability. Cash flow from operations, excluding capital expenditures, totaled $2.8 billion in the quarter. G.M. ended the period with $32.5 billion in cash and marketable securities. þþG.M.’s chief financial officer, Christopher Liddell, said that the company was hitting its internal targets as it prepared for an initial offering of stock. þþ“I am pleased with our progress on achieving our business objectives,” Mr. Liddell said in a statement. “We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow.” þþG.M. has also secured a $5 billion credit facility from several banks, including JPMorgan Chase and Morgan Stanley, to support its operations, according to people briefed on the company’s plans who were not authorized to speak publicly. þþThe success of the stock offering will determine how much money American taxpayers will recoup from the $50 billion government bailout of G.M. The automaker repaid $6.7 billion in Treasury Department loans in April. But the balance of the loan package was converted to a 60.8 percent equity stake in the automaker. þþOther major shareholders in the company include a health care trust for retired auto workers, G.M.’s former bondholders and the government of Canada. þþMr. Whitacre has said the automaker is eager to separate itself from government ownership, which executives believe is hurting the image of its products with consumers. “We don’t like this label of Government Motors,” Mr. Whitacre said last week. þþG.M.’s recovery in the marketplace has been gradual, but steady, since the company emerged from government-sponsored bankruptcy last summer. þþA new board of directors selected by the government replaced the chief executive, company veteran Fritz Henderson, with Mr. Whitacre, the board’s chairman and the retired head of AT&T. New executives were also named in top financial, marketing and operational jobs. þþDespite eliminating four of its eight brands, the automaker has increased sales in the United States by 13 percent this year compared with the first seven months of 2009. But industrywide sales have gained 14.8 percent, with G.M.’s cross-town rival, the Ford Motor Company, increasing sales by nearly 23 percent. þþG.M. executives say they are hopeful that a public offering of stock will provide a fresh start with consumers as it releases several new products, including its first plug-in hybrid vehicle, the Chevrolet Volt. þþWith its results, G.M. joins the two other Detroit automakers in reported stronger quarters. þþFord reported a $2.6 billion second-quarter profit last month, its fifth consecutive quarterly profit and its best earnings report since 2004. Revenue rose 17 percent, to $31.3 billion. Ford earned $2.1 billion from its automotive operations, including $1.9 billion in North America, in contrast to losses of $1.1 billion and $899 million a year ago, respectively. þþAnd Chrysler reported a narrower loss earlier this week. The automaker lost $172 million in the second quarter, mostly because of the interest it was paying on its government loans, but had operating income of $183 million. The overall loss was $25 million less than in the first quarter and far smaller than its fourth-quarter loss of $2.7 billion. þþThe Japanese rival Toyota reported a $2.2 billion profit in the quarter. þ
Source: NY Times
