Having read H. Roger Grant's Death of an American Railroad, and discussed the Gary White departure with former EL employees from the management side, I wouldn't be too sure the departure of Gary White had anything to do with the hiring of his brother as CEO.
Wyer, Dick & Co., the consulting firm, was hired by Erie Lackawanna in October 1962 to study the road and make recommendations on how to stem rising losses. In H. Roger Grant's Death of an American Railroad, in an interview with one of the consultants, Charles Shannon told Grant there was a lot of friction between the consultants and Gary White who was the operating vice president. White did not want to implement many changes. He was old-school; his attitude was, "We need more traffic, that will solve everything." He was also from the Erie side and supposed to be very hostile to former Lackawanna people. The final straw, according to Shannon, was Gary White refusing to close or consolidate station agencies. White was forced out as operating vice president effective March 31, 1963 (as stated above) and replaced by Fred Diegtel as operating vice president on April 9. The decision to try and recruit William White was apparently agreed upon at a meeting between Wyer, Dick people and the executive committee of the board of directors that month, April 1963.
It was not until May 3, 1963 that William White asked ICC permission to serve as EL Chairman and CEO while simultaneously serving as Delaware & Hudson's Chairman. Permission was granted and White took over Erie Lackawanna on June 18, 1963.
Ironically, Fred Diegtel was from the Lackawanna and served as operating vice president throughout William White's tenure on Erie Lackawanna.