General Motors Chairman Ed Whitacre announced late this afternoon that the Board of Directors had accepted the resignation of CEO Fritz Henderson, after what Whitacre said was a “hectic day.”
Whitacre takes over the job while a search for a new GM Company president and CEO is initiated.
Whitacre said it was time to accelerate progress toward returning to profitability and “repaying the American and Canadian taxpayers as soon as possible.”
(Who pushed Henderson? Click Here for TheDetroitBureau.com’s inside analysis.)
In its first quarter since emerging from bankruptcy last July, GM reported a $1.2 billion loss under Henderson’s leadership.
GM’s business results and their trend, as well as the size of the global auto markets are all key to the pricing – and crucially, the acceptance – of an impending public stock offering of GM Company, which could come as soon as next year.
It is the eventual public sale of the stock that will determine how much of a return, — if any — taxpayers will realize on their investment.
However, creating a market for the new stock when the United Auto Workers Union and the Canadian and U.S. governments all want to sell large blocks as soon as possible will be difficult task.
The U.S. Government, whose taxpayers via $60 billion in support hold a majority interest in the reorganized company, was informed this afternoon after the board’s decision, according to a GM spokesperson.
He also said it was in the “best interest of the company at this time “that Henderson depart given “where we are at this point.”
In spite of ongoing media speculation about his immanent firing, Ray Young remains, for the moment, Chief Financial Officer. Robert Lutz also remains as the head of marketing. GM’s sales year-to-date are down 32% in market that is off about 24%.
The latest move confirms the lack of confidence in the competence of GM’s inbred management that the U.S. Treasury Department’s Auto Task Force head, Steven Rattner, had observed after meeting with the previous Chairman, Rick Wagoner and his team.
Wagoner was subsequently fired as a condition of further government assistance to the bankrupt firm, which was bleeding cash at an unsustainable rate.