GM CEO steps down as profit revs up IPO engine

DETROIT (Reuters) - General Motors Co posted its biggest quarterly profit in six years on Thursday and CEO Ed Whitacre stepped aside on the cusp of an IPO expected to allow the U.S. government to relinquish its majority stake.

Whitacre, 68, who has served just eight months as chief executive of the top U.S. automaker, said he would resign on September 1, to be replaced by Dan Akerson.

Akerson, 61, was named to GM's board by the Obama administration a year ago when the automaker was restructured in bankruptcy with $50 billion of U.S. government funding.

A veteran deal maker and a managing director The Carlyle Group for the past seven years, Akerson spearheaded some of the private equity firm's biggest recent deals including the buyout of energy company Kinder Morgan.

Whitacre's departure had been expected, but the timing of his announcement caught even GM insiders off guard, just a day ahead of GM's expected filing for a landmark stock offering.

Whitacre, who continued to commute from his home in Texas during his stint as CEO of the Detroit-based company, had said repeatedly that he would be an interim leader.

"It was obvious that I was not going to be at GM for the long haul," Whitacre said at the end of a conference call to discuss the company's second-quarter earnings.

"We have put a strong foundation in place, so I am very comfortable with my timing."

Akerson, also a former CEO at Nextel, will become GM's fourth chief executive in just a year and a half, underscoring the challenge in remaking the corporate culture of an automaker still in the early stages of a turnaround.

Analysts said Akerson's appointment answered a question about CEO succession for potential investors and gave GM an executive with deep financial experience to lead the upcoming roadshow for a stock offering expected by late November.

"I think it's a very good move to deal with the issue of succession planning," said Jeremy Anwyl, chief executive of auto industry tracking firm Edmunds.

DRIVING THE TURNAROUND

Separately, GM posted a second-quarter profit of $1.3 billion in evidence of a turnaround driven by cost-cutting in its 2009 bankruptcy and better sales in the United States.

The second-quarter profit was the largest since 2004, when the U.S. auto market was still booming with annual sales of near 17 million vehicles and GM's brands accounted for more than one in four purchases of new cars and trucks.

The results reflected a 47 percent snap back in global production from the depressed levels of a year earlier when GM began operating under bankruptcy.

Revenue rose to $33.2 billion from $31.5 billion in the first quarter, boosted by higher sales of more profitable new models such as the Chevrolet Equinox.

Analysts expect the company to use the results to build the case for a record stock offering and allow the U.S. government to reduce its 61 percent ownership stake.

A successful GM IPO would provide the Obama administration with evidence that the unprecedented and unpopular intervention in the U.S. auto industry has been a financial success.

Europe, where GM is still struggling to restructure its Opel unit, remained a notable weak link for the automaker with an operating loss of $160 million.

North America had an operating profit of $1.6 billion. International operations, including GM's China joint ventures with SAIC and Wuling, had an operating profit of $672 million.

Despite GM's recovery over the past year, analysts say it still faces a challenge in winning back consumers because of the lingering stigma from its bailout and the "Government Motors" label from critics.

SNAPPING A LONG LOSING STREAK

GM lost about $88 billion between 2005 and 2009 when it was driven into bankruptcy by plunging sales and tight credit.

The last time the automaker had consecutive quarters of profits was in 2004, when it had a 26-percent share in a U.S. auto market that was near record-high levels.

GM's U.S. market share was just over 19 percent in the quarter that ended in June, down from almost 21 percent a year earlier when it was still selling the now-scrapped Saturn, Saab, Pontiac and Hummer brands.

GM's results show it is trailing its more successful and smaller rival Ford Motor Co, which posted a second-quarter profit of $2.6 billion, but ahead of Chrysler, which lost $172 million.

The turnaround in GM's North American operations was most striking from a year ago. In the most recent quarter, GM ran its North American factories at 93 percent of capacity, compared with 39 percent a year earlier.

Sources told Reuters on Wednesday that the largest U.S. automaker had secured a $5 billion credit facility, marking its return to the capital markets a year after it emerged from a government-funded landmark bankruptcy.

GM Chief Financial Officer Chris Liddell declined to comment when asked about the credit facility. He said the arrangement was "one of the building blocks" GM needed to restore its balance sheet.

(Additional reporting by Bernie Woodall in Detroit, Megan Davies in New York and John Crawley in Washington; Editing by Maureen Bavdek)

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