Reuss and Liddell seen as in-house front-runners

By Chrissie Thompson; Detroit Free Press ~ Aug 14, 2010

The next time General Motors changes CEOs, the bench will be deeper, industry observers say.

GM's last two CEO appointments -- CEO Ed Whitacre in December and now Dan Akerson, effective Sept. 1 -- called on former telecommunications executives largely because the automaker lacked internal candidates ready for a long turn at its helm. Akerson, 61, is expected to serve two to four years, allowing GM executives ample time to prove themselves.

The front-runners? Chief Financial Officer Chris Liddell and North American President Mark Reuss.

GM's directors selected Akerson this week after Whitacre told them he couldn't commit to staying much longer. The board wanted to tell investors who would lead GM for the foreseeable future before it filed for an initial public offering. GM is expected to register for the IPO next week.

In announcing the transition Thursday, Whitacre said his job was done: GM had returned to profitability. The next task falls to Akerson.

"Whitacre was the turnaround. The next one is the IPO," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "And once that occurs, I think we'll see a transition then to someone for the longer term."

Cole said he doesn't expect Akerson to stay much longer than a couple of years. Appointing a board member to a long-term CEO position might have discouraged people aspiring to run GM, he said.

People like Liddell. The 52-year-old CFO had that position at Microsoft for more than four years, but then left late last year to "expand his career beyond being a CFO," Microsoft said in a November statement.

In January, Whitacre said Liddell could be a candidate for CEO, if he performed well.

Liddell -- whose résumé includes a stint as CEO of Carter Holt Harvey, a wood- and paper-products company in his native New Zealand -- must keep GM's financials in shape through the IPO and any subsequent stock offerings, said Joe Phillippi, principal of AutoTrends Consulting in New Jersey. And to pass his test as CFO, Liddell must ensure GM has an investment-grade credit rating. (New GM has not been rated, but before it exited bankruptcy, it had Standard & Poor's worst-possible rating.)

Reuss, a 46-year-old engineer-turned-executive, has spent his first eight months in his role cleaning up messes in dealer relations and marketing. His challenge over the next few years is to shepherd GM through its product decisions as all automakers bet on future gas prices and scramble to meet toughening federal fuel-economy rules. But even if he succeeds, Phillippi said, he may only be a candidate for chief operating officer.

The plan to develop internal CEO candidates has been in place since this winter. That's when an executive search to replace eight-month CEO Fritz Henderson turned up no viable external candidates who would work for a failed Detroit company under the pay restrictions imposed on GM after it received federal aid.

While GM's appeal could change by the time Akerson moves on, Reuss and Liddell are widely considered favorites.

But who has the edge?

"It's probably a jump ball at this point," Phillippi said.