GM Abruptly Shifts Gears to Replace CEO

Dec. 2, 2009
Ed Whitacre takes top spot

General Motors ousted its chief executive in a surprise move on Dec. 1, signaling a team installed by the Obama administration is firmly steering the restructuring of the troubled auto giant.

CEO Fritz Henderson was ousted and replaced on an interim basis with company chairman Ed Whitacre, a former AT&T chief installed as chairman of a new board controlled in large part by the U.S. government. "Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change," Whitacre said, at a hastily convened press conference at GM's Detroit headquarters.

"While momentum has been building over the past several months, all involved agree that changes needed to be made. To this end, I have taken over the role of chairman and CEO while an international search for a new president and CEO begins immediately."

Reading from a statement, Whitacre said daily operations "will continue as normal."

"I remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks," he said.

Analysts said the move highlights the fact that GM is still controlled in part by the government and its auto task force set up to aid the troubled sector ahead of bankruptcies by GM and Chrysler.

"This does not come entirely as a shock," said analyst Michelle Krebs. "Ed Whitacre was the government's choice to lead the company and the automotive task force always appeared lukewarm about the idea of Fritz staying in the top job." Krebs added that in recent months, "the board and Henderson appeared as if they were not on the same page."

Henderson took the helm at GM in late March as the auto giant was headed toward bankruptcy. He replaced Rick Wagoner, who was forced out of the job by the administration of President Barack Obama.

A statement from the Obama administration said of the latest action, "This decision was made by the board of directors alone. The administration was not involved in the decision."

The announcement showed fresh turmoil at Detroit's largest automaker, which last month reversed course on a decision to sell its Opel/Vauxhall European operations and then saw a deal to sell its Swedish-based Saab division fall apart.

GM said two weeks ago it suffered a net loss of $1.15 billion in the period since emerging from bankruptcy in July. It said it is making progress toward reviving its fortunes, although it predicted more losses in the coming months.

GM said earlier on Dec. 1 that U.S. sales of cars and other passenger vehicles fell 2.2% from November 2008 to 151,427. The downturn followed an annualized rise of 4% in October.

The company is concentrating on its core brands of Chevrolet, Buick, GMC and Cadillac while winding down operations for Pontiac and Saturn and reaching a deal to sell the Hummer brand.

Copyright Agence France-Presse, 2009

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