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Daniel Akerson, GM's new CEO

Akerson pushed GM to boost production of the highly anticipated upcoming Chevy Volt electric vehicle.  (Source: GM-Volt)
Questions of leadership remain, but the company does appear to be recovering

Amid a round of disappointing earnings reports from Cisco and others, General Motors actually had some good news to report yesterday.  Following it's May report of an $865M USD profit -- its first profit since Q2 2007 -- GM has posted an even bigger profit, announcing a net income of $1.3B USD on a revenue of $33.2B USD.

GM is also sitting on a stockpile of $32.5B USD in cash -- leftovers from bailouts received from the U.S. and Canadian governments, in addition to revenue for the sales of its laggard brands like Hummer.

That was the good news.  The somewhat troubling news for GM was its announcement that CEO Ed Whitacre was stepping down.  The quiet Texan had masterminded the company's turnaround drawing on his long history of success as a senior executive, and eventually CEO at AT&T.

The news reportedly stunned GM insiders.

Equally surprising, perhaps, is the choice for his successor.  Whitacre will be replaced by former Nextel CEO Daniel Akerson.  Akerson, currently a private-equity firm where he is a managing director with the Carlyle Group, currently serves on GM's board.

Akerson is a firm proponent of electric vehicles.  As public buzz and anticipation grew about the 2011 Chevy Volt, Akerson pushed hard for GM to increase production 50 percent.

Some are optimistic about the appointment.  As a board member, Akerson showed he wasn't afraid to sack people, pushing for Henderson's resignation.  Steven Rattner, former head of the White House auto task force, comments, "He's a no B.S. kind of guy, just like Whitacre.  His whole operating style is the antithesis of the old GM. It is hard for me to imagine a better choice."

But some fear that he's too much of a financial man and lacks the necessary experience to lead GM optimally.  Paul T. McCartney, a managing director of Heritage Search Partners Inc. in New York comments, "[His whole career] "has been focused on making the numbers as best as you can and [then] 'let's move on with the company in some other form.'  [He isn't] going to lay out the strategic future of General Motors."

From a purely statistical perspective, the odds merely of Akerson keeping his position seem slim -- GM has had four CEOs in just a year and a half.

However, it's critical that Akerson prove a decisive leader.  GM is on the verge of announcing a initial public offering of stock to repay the U.S. and Canadian governments.  That offering has now been put on hold as account executives responsible for it reportedly race to change the documentation -- something which gives you the idea of how unexpected Whitacre's departure was.

If Akerson can pull together and repay the government via a successful offering he will offer vindication to Democratic President Barack Obama and his predecessor, Republican President George W. Bush, who both chose to bet on GM, bailing the company out at the taxpayer's expense.  Such a success would certainly elevate Akerson into the annuls of automotive executive history.

However, if the IPO disappoints and GM falters, don't be surprised if Akerson becomes the latest GM chief to see the door slam behind him.





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RE: Well duh
By Quadrillity on 8/13/2010 11:15:01 AM , Rating: 5
Or....

GM would have been chopped up and divided among the other big moto comanies, a lot highly paid broom pushing union workers would have lost their job, and we would have been WAY better off down the road after fully recovering from the initial losses.

Failing business should fail, otherwise the free market is useless. NO business should be so integral and large that it would collapse an entire economy. I never keep all my eggs in one basket, I have 3 (count that right, 3) backup plans if my current (career) job fails me.

It's time that people learn to 1. have backup plans and 2. Let free market take it's course.

What's next? McDonalds goes belly up and we (the taxpayers) bail them out too? Where do we draw the line?


RE: Well duh
By FITCamaro on 8/13/10, Rating: 0
RE: Well duh
By Quadrillity on 8/13/2010 11:50:42 AM , Rating: 2
exactly... I don't understand for the life of me why this growing trend of nanny government is getting more popular every day.

If anyone reads the U.S. constitution, they should see that the majority of the document is describing what the government CAN NOT do. I don't know which is worse, too much control, or too little.


RE: Well duh
By inperfectdarkness on 8/13/2010 12:00:06 PM , Rating: 2
all of the small business that provide "feeder products" to GM for vehicle construction would eventually either go under or (more likely) find new life in contracting for whichever mfgs move in to fill the void that GM leaves behind.

the market can't tolerate a void; something will fill it. propping up GM is only artifically floating a company that should go under. when UAW goes under (along with their glut of $60/hr workers who can contractually only work 2-3 hours per day) the market will be much better off for it.

toyota has it right. $15/hr for unskilled labor--NON UNIONIZED--is sufficient.


RE: Well duh
By Reclaimer77 on 8/13/10, Rating: -1
RE: Well duh
By FITCamaro on 8/13/2010 12:23:33 PM , Rating: 1
Not even really a joke today.

He tried to exempt menthol cigarettes from the cigarette tax increase. Who smokes the most menthols?

Every major piece of spending legislation passed in the past 20 months has had provisions to give precedence to minorities. Even the health care bill had parts in it to effectively create affirmative action for medical schools.


RE: Well duh
By Masospaghetti on 8/13/2010 12:53:31 PM , Rating: 4
quote:
He tried to exempt menthol cigarettes from the cigarette tax increase. Who smokes the most menthols?


If what you are hinting at is true, wouldn't he really just be condemning them to a life of disease and premature death?


RE: Well duh
By danrien on 8/16/2010 9:57:44 AM , Rating: 2
quote:
If what you are hinting at is true, wouldn't he really just be condemning them to a life of disease and premature death?


Hahaha that is good.


RE: Well duh
By ClownPuncher on 8/13/2010 3:00:35 PM , Rating: 2
He must be part Mexican too.


RE: Well duh
By hr824 on 8/13/2010 3:49:19 PM , Rating: 1
You think that was funny eh? Not to surprising though, racist always think their racist jokes are funny to everyone. I assure you that I don't secretly think your so called joke is funny at all.


RE: Well duh
By Quadrillity on 8/13/2010 4:07:54 PM , Rating: 1
race jokes are race jokes... It's obvious he wasn't being offensive if he points out the fact that he is making a joke about it. Too many people get offended when others make stereotype jokes. Lighten the f*** up dude...

I'm white. Go ahead and make all the white jokes you want to, and I'll sit back and enjoy them because I bet none of them apply to me. See how easy that is? And I'm being serious, send your best white jokes.


RE: Well duh
By Reclaimer77 on 8/13/2010 5:25:32 PM , Rating: 5
quote:
You think that was funny eh? Not to surprising though, racist always think their racist jokes are funny to everyone. I assure you that I don't secretly think your so called joke is funny at all.


Nah I just knew when I made it some miserable joyless uptight loser such as yourself would bite. Ahhh, you made my day. Even after I made it blindingly obvious what I was going for, you still took the bait.

I notice you didn't make a post similar to this when everyone was making fat jokes in that other article. Why is it ok to pick on one segment of people and not another? You're a bigot, that's why :)

I just blew your mind. Now go ponder your misplaced judgment.


RE: Well duh
By hr824 on 8/13/2010 11:21:52 PM , Rating: 1
Who took the bait? That was easy, predictable, and fun all at the same time.


RE: Well duh
By MamiyaOtaru on 8/15/2010 4:36:39 PM , Rating: 2
LOL I TROLL U


RE: Well duh
By mindless1 on 8/13/2010 12:17:39 PM , Rating: 5
It is naive to think they could just be "chopped up and divided".

Yes auto sales would increase for the other manufacturers, IF you ignore the points made that other companies would go bankrupt too.

The US is never "way better off" losing GDP. You lack a basic understanding of reality, while the government plays the shell game with money all the time, in the end it is for a purpose, to keep people productive. No matter what else happens it is crucial to keep the citizens producing valuable goods.

Free market depends on that too, you have merely taken an oversimplified view without seeing that the "free market" environment depends upon the very goods and services you discount as being ok to lose. Who is next? You like the foreign automakers more, the ones that had their government subsidizing them all along so their bottom line artificially looked better than it really was?

The decisions made were based on expert review, not arm-chair quarterback knee-jerk reactions like yours.


RE: Well duh
By Reclaimer77 on 8/13/2010 12:21:26 PM , Rating: 2
quote:
The US is never "way better off" losing GDP. You lack a basic understanding of reality, while the government plays the shell game with money all the time, in the end it is for a purpose, to keep people productive. No matter what else happens it is crucial to keep the citizens producing valuable goods.


Except for one key fact. A large company like GM, failing, consumes more GDP and resources than they produce. That's why Chapter 11 exists. Jesus Christ, and I the only one in here right now that knows what that is!!??! I feel like I'm taking crazy pills!

quote:
The decisions made were based on expert review


As with everything this Administration does, the decision was based on politics. And nothing more.


RE: Well duh
By FITCamaro on 8/13/2010 12:26:40 PM , Rating: 2
Dude if you're ever in the Charleston area, I'm buying you a drink.


RE: Well duh
By Reclaimer77 on 8/14/2010 7:25:34 PM , Rating: 2
Hell it's only 3 hours away. Sounds like as good a place as any to take my gf to on a weekend trip :)


RE: Well duh
By FITCamaro on 8/15/2010 10:43:30 PM , Rating: 2
Just lemme know. Hit me up on gmail if you feel like making the trip.


RE: Well duh
By Quadrillity on 8/13/2010 12:45:24 PM , Rating: 2
quote:
It is naive to think they could just be "chopped up and divided".

Hoping on that is a hell of a lot better than throwing money at a failed company. MY money.
quote:
other companies would go bankrupt too.

Cry me a river, "eggs in one basket" applies here.
quote:
No matter what else happens it is crucial to keep the citizens producing valuable goods.

You are right, and this ONLY works efficiently when the free (conservatively regulated ) market is allowed to exist. You are somehow implying here that I actually believe that a utopian free market exists; it doesn't. So get over yourself.
quote:
The decisions made were based on expert review, not arm-chair quarterback knee-jerk reactions like yours.

I am sick and f****** tired of the whole "you don't have a Ph. D, so you are stupid" type mentality. I am smart enough to realize that forcing citizens to support a dying company is without a doubt the worst idea possible. I'm sorry that you are too shallow to see that government almost always has a black thumb. They F' up everything they touch.

I guess my traditional views of a constitutional government that was set up by our founding fathers is just too radical nowadays; shame on me.


RE: Well duh
By Solandri on 8/14/2010 3:41:33 PM , Rating: 2
quote:
It is naive to think they could just be "chopped up and divided".

I have no idea how this got rated up to a 5.

When a business files for chapter 7 bankruptcy (liquidation) and the parts get chopped up and sold, how much of it is bought by competitors for reuse and the amount you'll get from the sale is proportional to how functional the business was. If it was pretty close to breaking even but just couldn't make it, the parts will sell for near the full value of the business and nearly 100% of its parts will continue to live on under new owners. If it was a terrible scam shop with no hope of every becoming profitable, the parts will sell for near nothing or won't sell at all, and very little will live on.

It's contradictory to argue on the one hand that the business was worth saving, and on the other hand that it couldn't have been chopped up and sold. If you believe the business is worth saving, then by definition you believe it could have been chopped up and sold. If you believe it couldn't have been chopped up and sold, then by definition you believe the business is not worth saving.

Essentially, you are arguing that the parts are worthless but the whole has tremendous value. That makes absolutely no sense.


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