GM CEO Dan Akerson in an old Corvette leading off last summer's Woodward Dream Cruise.
Americans are no longer upset over the $50 billion bailout of General Motors that had many critics calling the humbled giant “Government Motors.”
Or, so said GM CEO Dan Akerson during an appearance before the Detroit Economic Club during which he cautioned that the remaining 500 million shares of the automaker held by the U.S. Treasury won’t be sold off anytime soon.
“I do think we’ve kind of gotten over that,” Akerson said, in reference to the raging debate over the 2009 bailout that pulled GM out of bankruptcy but left taxpayers holding a majority stake in the automaker after it emerged from Chapter 11 protection. Some conservative commentators, such as Rush Limbaugh went so far as to call for a boycott of “Government Motors.”
But since it emerged from bankruptcy in July 2009, suggested Akerson, attitudes have improved, a public opinion poll by Peter Hart Research Associates finding more than 70% of Americans had a positive attitude towards GM over this past summer – a turnaround from the 70% negative opinion recorded two years earlier.
“I think America loves a competitor. I think General Motors, Chevrolet in particular, is part of Americana,” said Akerson.
There’s no doubt GM’s finances have improved – along with its market share – since its rebirth. So far this year the maker has reported $7.1 billion in profits.
But things aren’t entirely positive. After staging the most successful IPO in American history in November 2010, GM’s stock surged from $33 to nearly $40 a share. Since then, however, the price has plunged – slipping below $22 at midday Friday – though that was up from a recent $19.65 low.
During his speech, Akerson blamed the broader economy for that decline, though analysts contend GM shares have also been hit by the maker’s ongoing problems in Europe – which slipped back into the red during the third quarter – and concerns about a slowing of the Chinese auto market, where GM is the number one manufacturer.
Whatever the reason it appears unlikely that the government will move to sell off its remaining 500 million shares in GM anytime soon. To break even would require a share price of around $53.
There’s a downside to having the government continue to hold its stake in the company , admitted Akerson. But while he said the White House has steered clear of interfering in GM’s business affairs the government maintains a strict limit on what the automaker – and other companies that haven’t paid back their bailout cash – can pay their senior management.
As a result, the top 25 managers at GM won’t be taking home bonuses for 2011 despite some of the strongest profits in the company’s history.
“We’ve got some very, very good people that could do well at other companies who are doing this one for the home team,” Akerson said.