Akerson in D.C.: GM still has 'a lot to prove'
Photo credit: Bloomberg
WASHINGTON -- Dan Akerson, the departing CEO of General Motors, gave a closing defense here of the bailout that saved GM five years ago, saying the company’s strong balance sheet and recent accolades for its cars show the wisdom of the move.
For Akerson, the former telecom executive who joined GM in 2010, it was also a chance to cement a legacy as the CEO who closed the books on the bailout era.
“General Motors is working again,” he said Monday in the speech at the National Press Club.
The speech was also a warning. Akerson admonished his colleagues not to slip back into the old habits that led the company into bankruptcy.
He cited the employee pension plans that GM allowed to become underfunded, as well as the company’s excess of vehicle architectures and the redundancy that once allowed Chevrolet to employ more than 70 advertising agencies worldwide.
“The truth is, we are still in the early chapters of our comeback story, and we have a lot to prove, especially to people who left us for other brands,” Akerson said. Winning them back “costs real money,” he added.
That includes the $1.3 billion that GM announced today it will spend to upgrade two Michigan assembly plants and three powertrain plants, with much of the retooling being done for a new 10-speed automatic transmission.
Akerson’s remarks came a week after the U.S. Treasury Department announced that it sold the last of its shares in GM, pinning the final cost of the taxpayer-led bailout at about $10.5 billion.
However, that tally does not account for the costs the government would have borne had GM been allowed to fail, including a $26 billion pension default that would have ended up on the books of the federal Pension Benefit Guaranty Corp., Akerson said.
He plans to step down Jan. 15, with product development chief Mary Barra taking over as CEO and former Cummins CEO Tim Solso becoming nonexecutive chairman.
“I’m sure that Mary and the team will keep our momentum going. All of this is good for our employees, our investors, our industry and our country,” Akerson said. “But none of it would matter much if we went back to business as usual.”
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