Bailout in rearview mirror, GM set to invest $1.3 billion in U.S. plants
December 16, 2013 | By Bill Miller | firstname.lastname@example.org
Outgoing General Motors Chairman and chief executive Dan Akerson, speaking at a Dec. 16 National Press Club luncheon a week after the federal government officially ended its five-year bailout of the auto industry by selling its last remaining GM shares, said the now-profitable company is only in the “early chapters our comeback story.”
“We still have a lot to prove,” he said.
As part of that proof, Akerson announced that GM will invest $1.3 billion in five of its U.S. manufacturing plants. The commitment, which he said will create or maintain more than 1,100 jobs, boosts the four-year total of the company’s investment in U.S. plants to more than $10 billion.
The move is the latest signal of the giant automaker’s recovery from its 2009 bankruptcy, which led to GM’s federal bailout.
“The end of the ‘Government Motors’ era has cleared the way for GM to soar forward, and soar we will,” he said.
The company, which was $40 billion in debt during its bankruptcy, now is awash with $37 billion in cash, according to Akerson. It will put that money to work “at the plant level or in new products” both domestically and in overseas operations.
But Akerson, who announced last week that he will step down as GM leader Jan. 15 because of his wife’s cancer diagnosis, said that challenges remain for his successor, Mary Barra. She will take over Jan. 15, becoming the first woman CEO of a major U.S. auto manufacturer.
In what observers consider his valedictory speech, Akerson described GM’s progress since he was brought in from Carlyle Corp., a private equity firm, in September 2010 to lead the automaker’s recovery.
“We had to remedy decades of poor decisions, indecisions and ‘no decisions’ that piled up in the 1970s and ‘80s like so much rotting firewood,” he said.
As over-arching problems, he cited “out-of-control costs, wasteful complexity and diminished quality – all funded by ruinous debt.”
To overcome these problems, he said, he set three goals -- “to restore GM’s good name, to transform the company’s basic operations and to put quality and the customer back at the center of every decision we make.”
In response to a question, Akerson said he was not surprised that GM tapped Barra, a former intern who over 30 years rose to the company’s leader of product development, as his successor. Calling the choice “historic,” he said that Barra “was picked because of her talents and her success – not her gender.”
Answering a question on the future of electric vehicles, Akerson noted that GM’s sales of its electric entry, the Volt, already exceed those of Jaguar and many other small-market car models.
“This is the future,” he said of electric technology. “But you gotta be there early. And we are.”
He said another new technology -- self-driving cars – “is a ways off. It will be another generation before it comes.”