Editor’s note: This article was first published in September 2010. It was written on 4 September 2010, and Whitacre’s age of 68 is as of 2010. GM had announced on 12 August that he would step down as CEO on 1 September, so the rumors mentioned were already confirmed.
Ed Whitacre is an example of how a company can get back on its feet thanks to its top executive, in this case its CEO, Ed Whitacre. General Motors has been reborn after so many years mired in outright bankruptcy.
Thanks to the government, GM has managed to return to the market; had it not, more than 200,000 direct jobs and more than a million indirect jobs would have been lost. GM announced it would go public again after releasing its first-half results.
Ed Whitacre has delivered 1.3 billion in profits for the company. His vision for the future, his push into new markets and his cuts to the pay of non-productive staff are some of the measures Whitacre took to increase profits.
He fired four of the company’s most senior managers, which didn’t go down well at GM, but time has shown he did the right thing. If we’re paying people only to think, at least that thinking should produce profits.
However, it isn’t all good news for General Motors. Right after it announced its remarkable profits, the likes of which it hadn’t seen in decades, and with stock market analysts strongly recommending GM and encouraging people to invest in it, rumors emerged that Ed Whitacre was considering leaving the company.
For now they’re only rumors, but they’re enough to make investors in the United States lose confidence in GM’s future profitability.
For his part, Whitacre has said publicly that he joined GM to improve the company, which has a prosperous future, and that he has laid down the guidelines for how the work should be done, so with or without him, he says, GM will pull through.
Nevertheless, until it’s clear whether Ed Whitacre will stay at GM or leave, the most conservative investors prefer not to take the risk.
As we can see, a CEO can make all the difference to a company’s future. In this case we don’t know what GM’s future will be, but everyone knows that GM’s hopes rest on 68-year-old Ed Whitacre.
Further reading
- What companies look for in an executive
- Quotes from the world’s best investor, Warren Buffett
- Hiring a leader for your business: the qualities of a good boss
Featured image: Crisco 1492, Public domain, via Wikimedia Commons.
