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In a surprise move, following General Motors' second-quarter earnings release in which the automakerrevealed that it banked $1.3 billion, GM CEO and Chairman Ed Whitacre resigned.
Although the timing of the move came as a surprise (right after the release and upon what is likely to be the eve of the firm's IPO, for which Morgan Stanley and J.P. Morgan will serve as lead underwriters*) Whitacre had previously announced that he would step down once GM was back on track. And today, Ed reiterated this sentiment, saying, "It was my plan all along to help return this company to greatness and that I didn't want to stay a day beyond that."**
Whitacre's successor will be Carlyle Group Managing Director Daniel Akerson, currently a GM board member as well as a board member of American Express and Booz Allen Hamilton. Akerson has a pretty solid resume: he was formerly the CFO, COO and president of MCI; worked as a partner at private equity firm Forstmann Little; and served as CEO for General Instrument, Nextel Communications and XO Communications.
Whitacre will take over chief duties on September 1st, at which time he'll become the fourth GM CEO in less than two years. Any bets on who'll be the fifth?
*The GM IPO is expected to be a giant offering, upwards of $15 billion, but since the deal is a government one (the U.S. still is the main GM shareholder), Morgan Stanley and J.P. Morgan will be earning below-market fees: for their efforts, the two banks will likely take home 0.75% of the entire deal value, and not the approximately 3% that underwriters typically earn for working on deals of this size. In fact, the fee is so small that one insider on the deal told The Wall Street Journal, "If it wasn't the government, we wouldn't have done it."
**Although GM did have a solid quarter, increasing sales by 13 percent, the industry worldwide increased by 14 percent, and main competitor Ford Motor saw a more than 20 percent rise in sales; to boot, GM is still, to say the least, struggling overseas.
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