Ed Whitacre's Surprise Resignation Announcement

Yesterday's big news was GM Chairman Ed Whitacre's announcement that he'll be retiring in less than a month.

Timed to be on the day of GM's big earnings announcement, the best in years, I'm sure Whitacre is trying to continue his smoke-and-mirrors act of a few months ago, on which Paul Ingrassia, the Wall Street Journal's legendary auto sector reporter/executive, also commented at the time.

If you ask me, Whitacre knows this latest earnings pop is the best GM's going to see for a while. And Ed should know.

Having arranged the faux-debt repayment stunt in April, and seemingly presided over this past quarter's recent record earnings, Ed can make a quick exit, stage left, a la SnagglePuss, leaving his replacement holding a very large, public bag.

This was the subject of a couple of hot and heavy debates on CNBC yesterday morning and afternoon. The network trotted out its biased new contributor, Bob Lutz, who promptly gushed over everything Whitacre has done or said. Ironically, Lutz gave accolades to Whitacre for being a telephone guy, but turning around the failed auto maker, when auto execs could not.

Pardon me, Bob, but, uh, weren't YOU one of those inept auto execs? After all, you worked at every one of the Big Three.

This set Lutz up to crow about Whitacre's replacement being a non-car guy. In fact, he's another telephone veteran. No surprise there. And he's a former US Navy nuclear submarine officer. Lutz is a former fighter pilot, so he stressed the military connection. I'm not saying it's not something that is often helpful. But surely there have been inept corporate executives who were in the service.

Tom Labrecque of Chase Manhattan Bank comes to mind...... what a loser. See my point?

Anyway, Jeff Sonnenfeld of Yale's Management School concurred that Ed is running off the field and into the clubhouse before the game is over and the clock has run out.

As I surmised earlier in this post, one has to ask why a chairman would do this? Certainly not because things are about to get better. No, it's more likely that this is a lucky confluence of events.

If Art Laffer is right about the US economy collapsing next January, Whitacre's exit is nearly perfectly timed. By the way, unemployment claims were up by a surprising amount this morning.

GM isn't fixed. It's not an attractive investment. It's still an aged, ailing auto designer and assembler which was forced by the government to hand over large amounts of asset value to its unions. There's no way it's an attractive investment in an attractive sector.

I neither like nor respect Ed Whitacre. But give him credit for having a good sense of timing. Watch him prepare for the next act in his career.

The "it was doing fine when I left" phase.