General Motors Chief Whitacre Sees IPO As His Exit Sign
Since he became chief executive of General Motors in December, Edward E. Whitacre Jr. has lived for the day that G.M. would become a public company again and shed the stigma of government ownership.
Now that G.M. has finally filed for its initial public offering, Mr. Whitacre is hoping consumers will quickly forgive and forget its $50 billion bailout by American taxpayers.
“It’s getting better, but there’s still a substantial number that’s unhappy with the government bailing us out,” Mr. Whitacre said in an interview on Thursday. “This helps, but it still has a ways to go.”
Mr. Whitacre, somewhat reluctantly, will not be around to enjoy G.M.’s metamorphosis from a government-owned entity to a public company.
He will step down as chief executive on Sept. 1 and as chairman at year’s end, turning both jobs over to Daniel F. Akerson, a former telecommunications executive who was one of several new G.M. directors picked last year by the Obama administration to oversee the automaker’s revival.
Mr. Whitacre, the 68-year-old retired head of AT&T, said he was leaving because prospective investors needed to know that G.M. had a long-term leader in place beyond the stock offering.
“I’m sad about it,” he said. “But if I stay through the I.P.O., I think I’d be obligated to stay a long time beyond that. And that’s not what I came here for.”
Mr. Whitacre said the exact timing and size of G.M.’s stock offering had yet to be decided. But he expects strong interest in G.M.’s plan to sell preferred shares as well as its creation of a market for its common-stock shareholders — including the Treasury Department — to sell off their holdings.
“I would think so, because this company is going to make a lot of money,” he said.
Last week, G.M. announced a second-quarter profit of $1.3 billion, its strongest quarterly performance in six years. Analysts credit much of its turnaround to the forceful leadership of Mr. Whitacre, who stripped down G.M.’s organizational chart, replaced dozens of executives and tried to instill confidence in employees that they were working for a winner in the marketplace again.
“Whitacre brought stability to G.M. and a sense of confidence that it badly needed, after going through bankruptcy,” said David Cole, head of the Center for Automotive Research in Ann Arbor, Mich.
Mr. Akerson, a 61-year-old partner in the Carlyle Group investment firm, has a tall task filling the big — size 14 — shoes of Mr. Whitacre.
G.M. has yet to make Mr. Akerson available for interviews, partly out of deference to Mr. Whitacre during his last weeks on the job. In turn, Mr. Whitacre has been circumspect about setting an agenda for his successor.
The two executives were working together on Thursday at G.M.’s headquarters in downtown Detroit, and Mr. Akerson is beginning to meet with crucial members of the automaker’s revamped management team.
“He’s obviously been successful and he’s run a number of companies, so this is a good choice,” Mr. Whitacre said of Mr. Akerson. “It’s just logical. He’s been involved in this pretty deeply on the board.”
G.M.’s vehicle sales in the United States have increased 13 percent so far this year, slightly trailing an overall increase in the market, which is about 15 percent through July. Mr. Whitacre left little doubt that he expected Mr. Akerson to continue emphasizing better sales and marketing as G.M.’s top priority.
“The thing this company has to do is keep selling its vehicles,” Mr. Whitacre said. “That’s his No. 1 challenge, is to stay focused on that.”
That effort should gain immediate momentum, he said, once the government begins selling off its 61 percent ownership stake in the company.
“It’s been our top objective to pay the taxpayer back and have the government not be involved in any way, shape or form with this company,” he said. “We’ve improved our reputation quite a bit, but we still have a long way to go.”
Mr. Whitacre has often said he joined G.M. as a public service, first as a board chairman handpicked by the Obama administration and then as chief executive. As he enters the final stretch of his commitment, he said he would most miss the passion of G.M.’s employees to restore the battered automotive icon to its former status as an industry leader.
He said G.M. had a “strong chance” of one day reclaiming from Toyota its title as the world’s largest carmaker and expressed regret that he would not be in Detroit to see it happen.
“Leaving is bittersweet for me,” he said. “But it’s time.”