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Published: Saturday, 1/30/2010

GM's promising new boss

The identity of General Motors' chief executive is of obvious importance to northwest Ohioans, given the automaker's vital presence in this region. Ordinarily, it might be unsettling to recall that GM's new CEO conceded just last summer: "I don't know anything about cars."

But Edward Whitacre, Jr., who removed the "interim" designation from his CEO title this week, appears to be a leader capable of bringing stability to the troubled company even as he shakes up GM's insular bureaucracy.

The Obama Administration installed Mr. Whitacre, a retired chairman of AT&T, as GM chairman last year as the company emerged from a humiliating bankruptcy. The White House had forced out longtime GM CEO Rick Wagoner; his successor, Fritz Henderson, quit under board pressure last month. Mr. Whitacre fills the vacancy created by the departure of Mr. Henderson, another GM insider.

Mr. Whitacre has made a solid start in his permanent post by pledging early repayment of $5.7 billion in loans to GM from the U.S. government. Taxpayers have invested $50 billion, willingly or not, to bail out the company. GM's goal now must be to get the government out of the company as soon as possible, by working effectively to become a publicly traded concern.

The new CEO also has predicted audaciously that GM will return to profitability this year. The company's decision to sell or close four of its weak brands, while focusing on the surviving Chevrolet, Cadillac, GMC, and Buick brands, already is paying off in rising sales. This week, GM found a buyer for its faltering Saab brand.

Reviving GM will be tough. GM's U.S. market share, which at its peak exceeded 50 percent, is now about 20 percent.

The company has to persuade consumers, in America and around the world, that it is building fresh, affordable, appealing, fuel-efficient cars they want to buy. The Chevrolet Volt electric car, scheduled to go on sale this year, will test that proposition.

The quality of GM vehicles is generally quite high. But the economy remains weak for auto sales and industry competition is fiercer than ever, despite Toyota's current and uncharacteristic spate of safety-related problems. GM has alienated hundreds of its dealers, in Ohio and elsewhere, in its necessary but clumsy effort to rationalize its retail network.

Still, Mr. Whitacre has indicated both the willingness and ability to master the ins and outs of his new industry. He is weeding out holdover GM executives with more tenure than talent, while promoting other insiders who show genuine ability. At the same time, he is bringing skilled leaders to GM from more-successful companies. The automaker's new chief financial officer, for example, came from Microsoft.

And as Ford Motor Co. CEO Alan Mulally has shown, long experience in the auto industry need not be a prerequisite to effective leadership of a car company. Ford made a profit last year, for the first time since 2005 - a performance for GM to emulate.

Most important, the 68-year-old Mr. Whitacre has made a commitment to remain CEO long enough to restore stability to the company. That's the kind of decisive, confident leadership GM needs right now.



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