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Posts Tagged ‘general motors bailout’

GM CEO Akerson Rejects Repaying Government for Losses

“The die was cast,” said executive.

by on Dec.17, 2013

GM CEO Dan Akerson said the government took the same risks as other investors.

Soon-to-retire General Motors Chairman and CEO Dan Akerson has said thanks, but no thanks, to suggestions the now-profitable automaker should pay back the roughly $10 billion the U.S. Treasury is believed to have lost on its 2009 bailout of the then-bankrupt automaker.

Speaking at the National Press Club in Washington, D.C., Akerson told his audience that the government took a risk like any other investor – including those wiped out when GM filed for Chapter 11 protection.  And, the CEO stressed, the bailout was far less expensive than the tens of billions of dollars in lost taxes and other revenues that would have been lost if GM had gone out of business.

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“I would not accept the premise that this was a bad deal,” said Akerson, who plans to retire on January 15, when his protégé Mary Barra becomes the first woman CEO at a major auto manufacturer. “The die was cast” when the government decided to take shares rather than make its investment in the form of a loan, Akerson emphasized.


GM Bailout Saved 1.2 Mil Jobs, According to New Report

Feds to sell off last stake by month’s end.

by on Dec.09, 2013

Bailout "put food on the table for 10s of 1,000s," says GM Pres. Mark Reuss.

The federal government bailout of General Motors spared at least 1.2 million U.S. jobs, according to a new report – and even though taxpayers will lose more than $9 billion on the rescue effort, that was more than offset by nearly $40 billion in additional taxes generated in just the year the government pulled the beleaguered automaker out of bankruptcy in 2009.

The white House has been rapidly selling off its final shares in what critics have called “Government Motors,” and expects to be completely out of the automotive business by the end of this month.  The most recent Washington forecast indicated taxpayers could lose $9.7 billion on the bailout, though the rapid run-up in GM stock this past month could trim that loss, analysts note.

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“Any complete cost-benefit assessment of the federal assistance to GM in its restructuring must consider the total net returns to the public investment,” declared authors Sean McAlinden and Debra Maranger Menk, in the study, “The Effect on the U.S. Economy of the Successful Restructuring of General Motors,” released today by the Ann Arbor, Michigan-based Center for Automotive Research, or CAR.


GM Paying Down Another $1 Billion in U.S. Debt

Maker also earmarking $192 mil for Canadian loans.

by on Mar.26, 2010

Why is this man smiling? Perhaps it helps that GM CEO Ed Whitacre plans to pay down another $1 billion in government loans.

With a goal of paying off its entire debt to the U.S. Treasury this year, General Motors has anounced it will write another $1 billion check to Uncle Sam by April 1 – and that’s no joke.  The maker also plans to send a $192 million debt repayment to Ottawa.

That would leave another $4.7 billion to be repaid to Washington for the bailout the maker received, last year, to keep it in business; GM has already repaid $1 billion.  And its goal is to be able to tear up the loan papers by June.

“GM has every confidence that the remainder of the loans will be paid in full by June 2010; five years ahead of schedule,” CEO Ed Whitacre said in a statement from the automaker.

For those trying to do the math, GM got $6.7 billion in federal loans during a financial crisis that ultimately led to its declaration of bankruptcy.  But the “new” General Motors also received billions more that was invested in the form of equity, the federal government now owning a full 61% of the reborn automaker.

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The Canadians tossed some of their own money into the hat and received a smaller equity stake, as well.

It’s clear that Whitacre and his team would like to say farewell to the government as soon as possible.  Though the CEO insists Washington has been a mostly hands-off investor, it has stuck its nose into the automaker’s Renaissance Center headquarters on more than a few occasions.


We Built Excitement: Pontiac Pulls the Plug

After 83 years, the last G6 reaches the end of the line.

by on Nov.30, 2009

"We Build Excitement"? Not anymore. The last Pontiac has rolled down the assembly line.

"We Build Excitement"? Not anymore. The last Pontiac has rolled down the assembly line.

It’s a cliché we seldom think twice about, but when workers at the General Motors’ Orion Township assembly line finished up a white G6 sedan, just before the long holiday break, last Wednesday, it really was the “end of the line.”

More than a century after the first time the name of the powerful Michigan Indian chief was used on a car – and 83 years after GM formally adopted the brandname – the last Pontiac automobile was getting ready to be shipped to a dealer.

There were no banners commemorating the event, nor the black crepe bunting that might have more appropriately served to mark the sad occasion.  It was little more than business as usual.  Or, if you prefer, business as it’s become for post-bankruptcy General Motors.

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For more than a decade, the automaker’s top management, notably former CEO Rick Wagoner, forcefully resisted calls to kill Pontiac and several other troubled GM brands in a bid to curb expenses and focus on the core marques most likely to survive.  They had given in just once, and the long and costly process of killing off the once-successful Oldsmobile had proved so hard, Wagoner confided in a close friend, “I never want to go through that again.” (more…)

Is 13 a Lucky Number for GM’s Board?

With a lot of help from the U.S. Treasury, General Motors Company has a new governance structure.

by on Jul.23, 2009

Over to you Fritz, if the government actually lets you run the company.

Over to you Fritz, if the government actually lets you run the company.

The reorganization of General Motors finally caught up with the speed of its bankruptcy sale two weeks ago when the final appointments to its U.S. Government  vetted  Board of Directors  were announced this afternoon and most its new executive committee were  named.

The Executive committee will run the recovering company, and it replaces two previous boards, the Automotive Strategy Board and Automotive Product Board. Led by GM Company CEO Fritz Henderson, executive committee membership includes:

  • Bob Lutz, vice chairman, marketing and communications;
  • Tom Stephens, vice chairman, global product development;
  • Nick Reilly, executive vice president, GM International Operations;
  • Ray Young, executive vice president, chief financial officer;
  • Tim Lee, group vice president, global manufacturing and labor relations;
  • John Smith, group vice president, corporate planning and alliances, and secretary of the executive committee;
  • Mark LaNeve, vice president, U.S. sales;
  • Bob Socia, vice president, global purchasing and supply chain.
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“With these announcements, most of the new GM leadership team is in place,” Henderson said in a statement. “We expect to have the final round of announcements next week.”

At least six senior executives are retiring including Jonathan Browning, Troy Clarke, Gary Cowger, Michael Grimaldi, Maureen Kempston Darkes and Ralph Szygenda. More retirements are expected as the  company continues to pare its bloated executive ranks.

As Henderson previously noted, when announcing that senior management ranks would be trimmed by 35%, by year’s end, “We have a lot of good executives.  We just have too many of them.”


Chevrolet the “Main Dog” in GM Turnaround

CEO Henderson planning plenty of "experimentation," including eBay sales, to win back largely missing coastal buyers.

by on Jul.10, 2009

For all the effort that's gone into saving GM, its long-term viability comes down to one word, says CEO Fritz Henderson: "Chevrolet."

For all the effort that's gone into saving GM, its long-term viability comes down to one word, says CEO Fritz Henderson: "Chevrolet."

For all the financial wizardry, and the $50 billion in federal aid, that helped pull General Motors through bankruptcy, the company’s long-term success could come down to one word, “Chevrolet.”

You can’t cost-cut your way to prosperity, GM CEO Fritz Henderson made quite clear during a meeting with a handful of reporters, including  “Fantastic products” that can win back buyers “will drive everything,” the CEO stressed repeatedly.

As it filed for Chapter 11 protection, on June 1st, the troubled automaker held a market share of just over 20%.  But that included all eight North American divisions, four of which — Hummer, Saab, Saturn and Pontiac — will either be dropped or sold off.  Yet the automaker’s reorganization plan projects it will be able to maintain a share of somewhere between 18 and 18.5%, numbers that have raised concerns among many industry observers.

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Henderson defended that optimistic forecast, noting that Hummer and Saab have contributed little to GM’s overall volume, in recent years, though the demise of Saturn will have a modest but measurable impact on the automaker’s sales.  And as for Pontiac, a major portion of its sales went to daily rental and other fleets, “and we feel with our other brands we have the possibility of picking up a large portion” of that volume.