GM CEO calls 2008 federal bailout a wise move

Article by Anita Panait, on December 19, 2013

Outgoing General Motors chief executive Dan Akerson remarked in his speech at the National Press Club in Washington DC that the federal bailout of the carmaker five years ago was a wise move. He said that the GM's strong balance sheet and recent awards for its vehicle underline the wisdom of the move initiated by the United States government.

“General Motors is working again,” he said. His speech, however, also served as a warning to his colleagues at Ford. He warned them against slipping back into the old habits that drove the carmaker into a financial collapse. He cited the employee pension plans that the carmaker allowed to be underfunded and GM's excessive of vehicle architectures. He also cited the redundancy that once permitted Chevrolet to have over 70 advertising agencies globally.

“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. He said that winning those people back “costs real money.” To win them back, GM continues to make investments, the latest being the $1.3 billion that the carmaker will spend to upgrade two Michigan assembly plants and three powertrain plants.

The US Treasury Department recently disclosed that it has sold its remaining shares in GM, leaving $10.5 billion in deficit for US taxpayers.  However, the deficit could have been larger if the government just allowed GM to collapse, including a $26 billion pension default that would have been shouldered by federal Pension Benefit Guaranty Corp., Akerson said.

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