GM back in black as boss heads for exit

City A.M. Reporter
General Motors (GM) posted its biggest quarterly profit in six years yesterday and chief executive Ed Whitacre stepped aside on the cusp of an IPO expected to allow the US government to relinquish its majority stake.

Whitacre, who has served just eight months as chief executive of the top US automaker, said he would step down on 1 September, to be replaced by Dan Akerson, a GM board member and a managing director at private equity firm The Carlyle Group.

Whitacre’s departure had been expected but the timing of the announcement was a surprise and came just a day ahead of GM’s expected filing for a landmark stock offering. Whitacre, who continued to commute from his home in Texas during his stint as chief executive of the Detroit-based company, had said repeatedly that he would be an interim leader at GM.

“It was obvious that I was not going to be at GM for the long haul,” Whitacre said. “We have put a strong foundation in place, so I am very comfortable with my timing.”

Akerson, a former boss at Nextel, will become GM’s fourth chief executive in just a year and a half, underscoring a continued challenge for an automaker analysts see as still in the early stages of a turnaround.

Separately, GM posted a second-quarter profit of $1.3bn (£834m) in evidence of a turnaround driven by cost-cutting in its 2009 bankruptcy and better sales in the US. The second-quarter profit was the largest since 2004, when the US car market was still booming.