GM's outsider chairman steps to center of change

NEW YORK (Reuters) - When General Motors Co wanted to find a pitchman to sell the American public on the message that the automaker was coming out of bankruptcy better and different, it turned to a little-known figure.

In a series of TV ads that aired this fall, GM's newly appointed Chairman Ed Whitacre encouraged car buyers to give the company another chance.

GM's research showed viewers liked Whitacre's straight-talking manner and Texas drawl and found him believable as a leader for a car maker tarnished by decades of missteps on quality and a reputation for being out of touch.

"Central casting could not have done better," GM Vice Chairman Bob Lutz said at the time.

Now, Whitacre, 68, steps to center stage as acting GM chief executive after the abrupt resignation of Fritz Henderson on Tuesday.

An outsider in an industry long dominated by Detroit insiders, Whitacre assumed the chairman post at GM in July at the request of the U.S. Treasury.

A former chief executive at AT&T, Whitacre told reporters that he did not consider himself a car guy and knew little about the industry when he took the chairman post at GM.

But he quickly made a mark at GM by showing an independent streak, turning up unannounced to talk to factory workers or grilling white-collar staff on their roles and opinions.

United Auto Workers President Ron Gettelfinger said Whitacre had forced a change in the culture of a 101-year-old company long criticized for having a board that acted as a rubber stamp for management decisions.

Gettelfinger told Reuters in November that Whitacre had made a point of meeting him privately at a greasy spoon restaurant near GM headquarters for a different perspective on the automaker's problems.

PLAIN-TALK AND SPOT INSPECTIONS

"He is hands on. You never know where he's going to show up and he is apt to go out to one of these facilities basically unannounced, which in the industry, is unheard of," Gettelfinger said of Whitacre.

At one of his GM plant visits, Whitacre told UAW workers in Arlington, Texas that he believed the automaker should keep the Cadillac Escalade as a truck-based SUV rather than a car-based crossover, the plant's union representative said later.

That detailed discussion of vehicle planning surprised GM workers used to seeing such discussions carried on by senior managers and behind closed doors.

In the five months since he has served as chairman, Whitacre had also pushed the automaker to move more quickly toward profitability.

When he said that returning to profit and repaying U.S. taxpayers were the most important focus for the company last month, it was seen as an implicit rebuke of Henderson who had talked up the prospect of a 2010 relisting of GM shares.

Henderson was asked to step down by the board on Tuesday, a source briefed on the matter told Reuters.

"While momentum has been building over the past several months, all involved agree that changes needed to be made," Whitacre said in a statement he read at GM's headquarters.

Whitacre, who will now move to Detroit, has said that pressure on management at GM, which has lost $88 billion since 2005, would only ease once the company became profitable.

GM posted a loss of $1.2 billion in a bankruptcy-shortened third quarter, and warned of a tougher fourth quarter.

Analysts said the results underscored the pressure facing the automaker even after a $50 billion financing package that has made the U.S. government a 61-percent owner.

Led by Whitacre, GM's board had appeared at odds on crucial decisions in recent weeks including on whether to sell Opel, the automaker's European unit. Henderson had favored a deal but the board overruled him.

"It had become clear in recent months that the board and the CEO were not always on the same page," JP Morgan analyst Himanshu Patel said in a note for clients.

Potential GM investors will hope Whitacre can repeat his successes in rebuilding AT&T, which he led from 1990 to 2007.

Whitacre built the new AT&T by reassembling disparate regional telephone companies created with the breakup of "Ma Bell" more than 20 years ago through a series of high-profile, and sometimes risky, acquisitions.

Until now Whitacre has lived in Texas. He serves as an adjunct business professor at Texas Lutheran College.

(Additional reporting by David Bailey and Bernie Woodall in Detroit; Editing by Lincoln Feast)