General Motors Corp
The No. 1 U.S. automaker, which filed for bankruptcy on June 1, plans to undertake a quick sale process that would allow a much smaller company to emerge from court protection in as little as 60-90 days.
GM said the new chairman will take over when the smaller, restructured company is formed in the next few months. The automaker's current interim chairman, Kent Kresa, will continue to serve in that position until then.
Kresa, former chief executive of Northrop Grumman Corp
Whitacre and Kresa, along with current board members Philip Laskawy, Kathryn Marinello, Erroll Davis Jr, E. Neville Isdell and Chief Executive Officer Fritz Henderson, will serve as the nucleus of the restructured company's board, GM said in a statement.
The six other members of the current board will most likely retire, according to the automaker.
GM has retained executive search firm Spencer Stuart to find directors to serve on the board of the new company that it expects to emerge from bankruptcy,
A selection process is currently under way for four more directors to serve on the board and announcements may come as early as next month.
Also, the Canadian government and the new UAW Voluntary Employee Benefit Association will each be nominating one director, bringing the total number of directors of the reorganized company to 13.
KNOWN DEAL MAKER
Whitacre, 67, retired from AT&T in 2007 after seeing the largest U.S. telecommunications service provider through seven large acquisitions over a decade.
The Texas-born executive, who spent 44 years with AT&T, was the telecommunications industry's best-known deal maker. His biggest deal was AT&T's $86 billion acquisition of BellSouth Corp in 2006.
The appointment of Ed Whitacre as chairman represents a very auspicious beginning for the New GM, said Kresa, adding that the search firm Spencer Stuart identified Whitacre as a candidate.
The U.S. Treasury was the ultimate decider in the decision to appoint Whitacre as chairman, Kresa told reporters on a conference call.
He also said new GM board members, on the company's emergence from bankruptcy, will be restored to a more normal level of pay compared with the $1 per year they currently earn.
The U.S. government is set to take a 60 percent stake in the new GM in exchange for the $30 billion it intends to provide in financing for the automaker's bankruptcy and for the New GM that will be created to take over its best assets.
But Obama administration officials have said they intend for the government to leave key operational decisions to GM's management and board.
Under Wagoner, GM's board had faced criticism for failing to press harder for strategic and senior-management changes, especially over the past four years as the automaker's problems mounted. GM cut more than $9 billion of annual costs in a series of restructuring steps that failed to halt its decline.
(Reporting by Poornima Gupta, editing by Matthew Lewis)