A "humbled" GM CEO Dan Akerson.
A “humbled” General Motors is determined not to repeat the mistakes that led it into bankruptcy, Chief Executive Officer Dan Akerson told an audience at the Economic Club of Washington, today.
It was the CEO’s first public appearance in the nation’s capital since last month’s successful IPO took GM public, again, and began the process of reducing the U.S. Treasury’s holdings in what critics continue to call “Government Motors.”
“We are humbled by our near-death experience,” said the former Navy officer, who took the reigns as GM Chairman and CEO earlier this year. Akerson joined the General Motors board after the company emerged from Chapter 11 protection in July 2009.
Akerson traveled to Washington under very different circumstances from his predecessor, Rick Wagoner, who appeared – along with the CEOs of Chrysler and Ford – before a clearly hostile Congressional committee, late in 2008, asking for a federal bailout. Wagoner was forced out by the White House, in March 2009, as a provision for providing that assistance, which ultimately totaled more than $50 billion.
The bailout has continued to generate sharp criticism, though recent studies reveal a slim majority of Americans now support the move, which proponents claimed saved a million U.S. jobs.
Akerson, who spent time in the private equity world before becoming GM CEO, acknowledged, in his speech, that the automaker was a risky bet for investors, until recently, but has since proven itself, with “people by the hundreds of thousands” investing in the maker’s new stock.
“They saw a new company positioned to break even in the U.S. near the bottom of the cycle, not the middle,” said the GM chief executive.
The initial public offering raised a record $23.1 billion through the sale of both common and convertible preferred shares. Support was so solid, leading up to the IPO, that GM both increased the number of shares it sold and raised the price to $33, as opposed to the originally planned range of $26 to $29 a share.
But, in recent days, the maker’s stock price has tumbled, closing Thursday on a down note at $33.75. It had reached the $35 range in earlier trading. Standard & Poors recently issued a forecast calling for GM stock to reach $36 over the next 12 months.
Akerson clearly hoped to sound a more optimistic note as he addressed Washington’s business and cited opportunities in India and in China, where GM is now the largest automaker.political leaders. He also stressed that the four brands that survived the GM bankruptcy now sell more vehicles than all eight brands did before the maker went into Chapter 11.
The bankruptcy filing not only helped GM clear its massive debt but also take other steps to improve its competitiveness, such as winning significant concessions from its unions.
“For the first time in a generation, the auto playing field in America is level,” said Akerson. “Now the best car can truly win again, and we’re going to fight very hard to be the company that builds those cars.”
The challenge for Akerson and his new management team will be to prove that GM really won’t repeat past mistakes – notably letting success lead to a bloating of its bureaucracy and an increase in its fixed costs that would once again make it uncompetitive.