Print 58 comment(s) - last by PaterPelligrin.. on Aug 24 at 1:22 AM

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.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Well duh
By Quadrillity on 8/13/2010 1:20:07 PM , Rating: 2
So you think tax money should be used to violate our established laws and regulations of a free market economy? You think it's the governments job to babysit?

RE: Well duh
By Lerianis on 8/13/2010 5:54:41 PM , Rating: 1
The free market doesn't work without regulation. Some of regulation is (when speculators are driving up prices illegitimately) to use government dollars to stave that off.

The free market simply DOESN'T WORK in the real world. In a perfect world, it does but in the real world, we have too many people out there who are willing to scam other people out of their money for it to work.

There comes a time where you have to realize that some nationalization/socialization is necessary and good for the 'free market'.

RE: Well duh
By Reclaimer77 on 8/13/2010 6:10:12 PM , Rating: 3
The free market simply DOESN'T WORK in the real world.

What? It's been working since day one of this countries founding. Since the dawn of the Industrial Revolution. And beyond. How anyone living in this country can say it doesn't work, while reaping all the benefits of it, is beyond belief.

If anything only works in a "perfect world" it's socialism.

RE: Well duh
By MadMan007 on 8/14/10, Rating: 0
RE: Well duh
By LoweredExpectations on 8/14/2010 2:56:22 AM , Rating: 3
Every successful economy is a capitalist-socialist hybrid. There isn't a purely capitalistic economy anywhere on earth that isn't humanized through some degree of socialist regulation.

The free market as the corporate fanboys and market fundamentalists understand it hasn't existed since 13 year-old kids slaved for room and board in sweatshops in Victorian England. Nothing like a bloody revolution to convince the guys with the money that maybe they'd live longer if the people who worked in their factories had a few rights.

People who think businesses will always do the right thing if left completely alone amaze me. The people who worship business are also the same people who accuse everybody else of immorality and stupidity; aren't companies just groups of people who've banded together to pursue profit? how does that make them suddenly so saintly and virtuous that they can always be blindly trusted to do the right thing? You'd have to be pretty blinkered to not see the damage businesses can do if left unregulated.

RE: Well duh
By FITCamaro on 8/14/2010 9:35:11 AM , Rating: 2
No one is advocating for a complete lack of regulation.

But to say we have a free market today(as Obama often has) is like saying I'm free to do whatever I want when there's a guy with a gun pointed at my head watching every step I make, ready to pull the trigger if I do something he disagrees with.

Is some regulation good? Yes. Is the level there is today good? No.

Businesses are weighed down by the bureaucracy they have to deal with in order to do business. Look at this latest financial regulation. Businesses now have to provide detailed reports of suppliers they bought over $300 worth of stuff from. $300!!! That means more paperwork, potentially another paper pusher to deal with it who does nothing to add to their bottom line or productivity, and probably higher taxes.

There is absolutely no life in the economy unless you work in the government or a sector of the economy that exists because of the government like the solar energy market. Probably 90% of solar out there is only being built because the rest of us are paying for it. Sure some people put it on their homes because they want to. But you have to wonder if they'd bother if not for the massive tax credit and other subsidies on it. 50-60% of the cost is subsidized by the rest of us. If not for that the break even point would be in 25-30 years instead of 5-10.

RE: Well duh
By Quadrillity on 8/13/2010 6:10:24 PM , Rating: 2
Please do us all a favor an read the actual discussion before jumping in at last minute. My stance on these things have already been posted.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

Most Popular ArticlesAre you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Leaked – Samsung S8 is a Dream and a Dream 2
September 25, 2016, 8:00 AM
Yahoo Hacked - Change Your Passwords and Security Info ASAP!
September 23, 2016, 5:45 AM
A is for Apples
September 23, 2016, 5:32 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki