Image: Edward Whitacre Jr.
Carlos Osorio  /  AP file
General Motors Corp.’s Edward Whitacre addresses the media during a news conference at the company’s headquarters in Detroit.
Image: Paul A. Eisenstein, msnbc.com contributor
By
msnbc.com contributor
updated 12/28/2009 3:14:16 PM ET 2009-12-28T20:14:16

Don’t ask Ed Whitacre to rush, certainly not as chairman and acting CEO of General Motors Corp. Even the Obama administration is learning that.

The automaker’s bankruptcy, and the government’s multibillion-dollar bailout, has left the U.S. Treasury as GM’s largest shareholder. And while the White House has largely stayed true to its word, not interfering in the automaker’s day-to-day operations, it's clear the administration would like GM to go public as quickly as possible, hoping to get taxpayers’ money back.

But sitting in the automaker’s boardroom overlooking the icy Detroit River, Whitacre made clear in a recent interview that he isn’t about to be pinned down.

“I don’t have a specific time for the IPO (initial public offering). There have to be results,” in the form of improving sales and strong revenues, he asserted. “When we get all that done, we’ll start talking about an IPO. ... I’m a flexible guy and this is a flexible board.”

The plain-speaking executive is the point man in the effort to revive an icon of American industry that emerged from bankruptcy last July only with the help of billions of dollars in federal aid.

Whitacre was a surprise appointment when he was named chairman of the “new” GM’s board of directors in June by the Obama administration, which oversees the government’s 60 percent stake in the automaker.  He was elevated to acting CEO Dec. 1 when he and the board ousted GM lifer Fritz Henderson after only eight months in the top spot.

Whitacre was well-connected politically as a longtime major fundraiser for the Republican Party. But prior to his appointment in June he had no experience in the auto industry besides “I’ve always owned GM vehicles,” as he noted during a recent interview.

A call from Washington
At 68, Edward Whitacre Jr., is a long way from Texas, where he started his career as a facilities engineer with Southwestern Bell in 1963, rose to head the most powerful of the so-called Baby Bells, SBC, and then masterminded the plan that helped reconstitute its former parent, AT&T.

By early 2009, the Texan had more or less retired, though he remained active on various boards and with a number of charities. Then came the call from Washington.

Video: 10 years of change in auto industry “I had a pretty good life,” Whitacre says. “It hit me cold (and) I said, ‘No, it’s not me.’” But the pressure from the White House was heavy and eventually wore down Whitacre’s opposition. It was, he explained, “a decision of my conscience. If I can help, that’s why I’m here.”

The company Whitacre took over had just marked its centennial, which coincided with the collapse of the U.S. auto market, revealing decades of mismanagement, lousy products and the withering impact of foreign competition. Once the nation’s largest corporate employer and the world’s largest automaker, GM had run up massive debts and liabilities that a seemingly endless string of turnaround strategies couldn’t fix. With the car market collapsing, the once-proud maker had to go, corporate hat in hand, to Washington pleading for a bailout.

The Bush administration offered just enough to keep GM going and then handed the problem off to the new Obama White House. The deal required the automaker to declare Chapter 11 to wipe out most of its debt and initiate a draconian restructuring that eliminated half of its North American brands and fired a third of GM’s U.S. dealers.

But as Whitacre quickly discovered, there was still too much business-as-usual among senior managers. That included Henderson, who had been appointed CEO by the Obama administration after it ousted chairman and chief executive Rick Wagoner in March.

“The board and Fritz wanted to go in different directions,” Whitacre said, when asked why the popular CEO was forced out.

Pressed, Whitacre admitted there was a disagreement over Henderson's plan to sell GM’s huge European subsidiary. “I felt we should have Opel," Whitacre said.

In the end, GM kept Opel and jettisoned Henderson.

That meant Whitacre has had to take on Henderson’s day-to-day duties, a significant shift from the relatively modest chores he signed up for.

Whitacre leads many new faces
But if anyone expected the 68-year-old executive to serve as a caretaker in his role as acting CEO, he’s proving them wrong. He’s working aggressively to reshape the company, aiming to cut through its crippling bureaucracy to create a flatter, leaner, faster enterprise.

That means a lot of new faces in the executive suite. “Out of the top 50 managers at GM when I joined the company (in 2001) only two of us are left,” said Vice Chairman Bob Lutz.

New and old, the current management team knows that each and every one is on a short leash. Whitacre is a performance-driven manager.

In a Web chat with reporters this month, Whitacre was asked how long the newly appointed execs have to show results before they are replaced. “Not long,” he typed back, in typically terse fashion. He followed up with a smiley face icon.

“He’s certainly shaking things up, which is what the board wanted and the government wanted,” says auto analyst Joe Phillippi of AutoTrends Consulting.

'The polar opposite'
Whitacre “is the polar opposite of what GM has operated like for decades, with people wanting thick folders full of slides and numbers justifying whatever they want to hear … and then still coming up with the wrong decision,” Phillippi said.

That’s crucial in an industry that is operating at a pace more akin to the telecomm or electronics world rather than the traditionally glacial pace of change of the auto industry, said Phillipi.

Can Whitacre maintain the pace? He has a reputation for being good at delegating, letting his senior managers do the heavy lifting. Where Whitacre has been working hard is to ensure that he gets a better feeling for GM and the broader automotive business.

“I don’t feel isolated or insulated,” Whitacre said. He added he has an “open elevator policy,” and noted that he has been spending a lot of time on the road, meeting with dealers, field managers and workers, and even putting in a brief stint on an assembly line installing a bumper.

Not all buy into the image Whitacre and GM’s skillful PR machine are crafting. His decision to star in a series of ads promoting the company’s money-back guarantee program was almost universally panned. One source who has known and worked with Whitacre over the years, discounted the executive’s folksy, aw-shucks image. “He can be arrogant and doesn’t always like to listen," said the source.

But one thing everyone agrees on is that Whitacre doesn’t have to say much to prove he’s a formidable force.

How long the one-time engineer will continue serving a dual role is unclear. GM is searching for a permanent chief executive, and some believe GM’s new Chief Financial Officer Chris Liddell, an outsider hired away from Microsoft, could eventually get the job. But others wonder if Whitacre might covet the job more than he lets on, even if he’s not being paid for his CEO duties. (He does earn $350,000 a year as board chairman.)

Serving as chairman was a demanding but not especially time-consuming job, says Whitacre, requiring him to fly into Detroit once a month and spend a few more hours on the phone each week. Now, he lamented, he’s a virtual captive within the Renaissance Center, GM’s downtown Detroit headquarters.

So far, Whitacre admitted, he’s failed to master the center's odd layout of interlocking circles, so he still has to ask strangers and security guards for help finding the executive elevator. Many days, he simply shuffles from the complex’s Marriott Hotel to his office on the 39th floor of the 300 Tower.

Nonetheless, it doesn’t seem like Whitacre is in a rush to step back to being just non-executive chairman. “I am enjoying it, I will say that,” he said of his CEO duties.

For Ed Whitacre, that’s enough said.

© 2013 msnbc.com.  Reprints

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
13.79%
Cash Back Cards 17.80%
17.78%
Rewards Cards 17.18%
17.17%
Source: Bankrate.com