It's the right time, but I have a lot of respect for Looyd Carr. He was great for college football and I hope his legacy gets the respect it deserves.
Let the speculation begin on who replaces him. The obvious choice is Les Miles, but I don't think Michigan will go after him. His temperament doesn't mesh well with the Michigan culture. Plus, he's psychotic. Michigan fans should want no part of this guy.
Some might say he shouldn't want the job, but there's a few reasons why he would beyond his attachment to the University. First, he's not very popular down there in Baton Rouge. Many of the fans give Pelini more credit than Miles and they say he's just riding the coat tails of Saban's recruits. They also think he's lost too many game they should have won. Not saying I agree, just that he's not as beloved there as one would think given his success.
Second, I'm not sure how well he's recruited, but afte this year, Saban's recruits will be gone and the south is tough to recruit. Recruiting in the midwest with Michigan's name I would think would be a little easier.
Another obvious choice would be Jim Harbaugh. The only problem is some might wonder if he's ready for the big time yet. He hasn't had the success yet you could command from a coach for Michigan. I think he's a long shot.
They might consider going after Bob Stoops. Some might ask why he would leave OU. First, Michigan has got to be one of the most appealing college coaching jobs out there. Stoops grew up in Big Ten country in Ohio and he's done about as much as he can do in Oklahoma. He's hit a plateau there and I think he'd be much better suited to contend for National Titles at Michigan. I could be WAY off on his interest, but I think he might just be.
Jeff Tedford from Cal would be a good choice. He's done good work at Cal, but he's always going to play second fiddle to USC and Cal isn't the sports school that Michigan is. He'll never have the resources at Cal that he would at Michigan. The only downside is that he's never shown he knows how to build a defense.
Even Bo Pelini from LSU might be a candidate. He played at Ohio State, and the last time they got a guy with Ohio State ties, he did OK, IIRC. He's defensive minded and Michigan has historically gone after defensive minded coaches.
Heck, Mar D'Antonio might even be considered. I doubt it, but he wouldn't be a bad choice. If this were to happen, Michigan State might become as big a rival as OSU.
Some people have suggested Lloyd Carr, but he might too old at this point. they might be looking for someone who will be around longer. Plus, I've heard Chow is a pretty polarizing individual and has no interest in doing the "non-football" things required of coaches, such as schmoozing alumni, etc... He doesn't like dealing with university beauracrats. That won't go over very wel in Ann Arbor. My understanding is this is why someone with a record like his has never been a head coach.
I've also heard Ron English, but I think they need to go outside. English isn't ready yet, IMO.
Of course, they could go after an NFL coordinator as well.
My money is on Tedford. That's who I think will ultimately get the job.