GM wants to sell off the government's 61% stake "as soon as possible," says CEO Ed Whitacre.
General Motors is working on its initial public offering, but the only timeframe Chairman and President Ed Whitacre would offer for the IPO, during an appearance Thursday, was “as soon as possible,” in his latest non-news statement.
“It’s number one on our list,” Whitacre, who also serves as GM’s chief executive officer, told the Management Briefing Seminars in Traverse City. “We don’t like this label of ‘Government Motors.’ It turns customers off and it turns us off.”
Late last month, rumors began to circulate that GM would set out details of his planned stock offering around August 16th, following the release of its second-quarter earnings – about which Vice Chairman Steve Girsky today said analysts would be “encouraged.”
It is anticipated that the offering will be timed just before the upcoming mid-term Congressional elections, though neither Girsky nor Whitacre would confirm that timing. Ruling Congressional Democrats, along with incumbent Republicans face the wrath of voters this fall.
Following his speech at the annual industry confab, Whitacre told reporters that GM must file a massive application with the Securities Exchange Commission, something it is now working on. But when GM does issue its IPO, Whitacre said he doesn’t expect any backlash as an automotive stock.
“I think the appetite in the marketplace is going to be really good for GM stock,” he said. In fact, he added, some analysts said the automaker’s IPO could be the biggest ever.
When the stock does go public, Whitacre said he hopes that the government will be completely removed from any significant GM ownership.
GM declared bankruptcy in May 2009 and emerged, barely two months later, with the federal government owning 61% of the new company. In addition, the United Auto Workers retiree health care trust owns 17.5%, the Canadian government 11.7% and bondholders from the old company 9.8%. GM repaid Treasury loans of $4.7 billion and another $1.1 billion owed to the Canadian government in April.
Whitacre added that GM is eager to report its second-quarter earnings next week.
“If you liked our first-quarter earnings, you’re going to love what we’re going to report next week,” he said. GM reported earnings of $865 million for the first three months of 2010.
Whitacre, a tall Texan with a slow southern drawl, said that he resisted many attempts by the U.S. Treasury Department to coax him out of retirement to take on the job as Chairman. The former chairman of AT&T later added the title of president and said he’s enjoyed the job.
“I took this job because I believe this country needs GM,” Whitacre said, adding, “I took this job out of a sense of duty – the country put a lot of faith in GM and in the industry, and I wanted both to succeed. After all, I’m a taxpayer too.”
But he refused to tell reporters whether he plans to stay on after the IPO, saying only that it is common knowledge that, at the age of 68, he has no plans to keep the job long-term.
“It’s a fun job and I’ve enjoyed it,” he said, but added “I’ve aged a lot in the last year.”
Whitacre said it’s been a remarkable year since he took over as chairman. He said he’s learned a lot about the automotive industry and has been most surprised by the dedicated people GM employs.
“At GM, we were pretty much flat on our back a year ago,” he said.
Now sales are up – even after shedding four of its eight brands – and the company’s prospects look significantly better.
The former head of AT&T, Whitacre did acknowledge some challenges yet to be resolved at GM, noting it “still has way too much bureaucracy.”
One benefit of joining GM is that even though he described himself as a long-time GM customer, he had never owned a Corvette. Now he has his first ‘Vette.
“But I’m doing something wrong, I don’t have any speeding tickets yet.”