GM’s Dan Akerson wants to change the company as soon as possible

Article by Christian A., on December 21, 2011

Under Dan Akerson’s leadership, General Motors was kept moving at a quicker pace. However, he wasn’t able to accomplish that by staying quiet. In fact, GM’s chairman and chief executive, is very candid. He criticizes rivals’ cars and talks about the company’s bureaucracy out in public. He calls the Prius hybrid “a geek-mobile” and he said that Ford should “sprinkle holy water" on the Lincoln luxury brand.

He said that what makes him upset at the plant is the “resistance to change.” GM hopes for profits to continue to flow and for the company to recover. GM presently has a range of cars and trucks that are experiencing good sales. For almost two straight years, the company has been profitable.

But portfolio managers have again become attracted to its stock even as it is trading below analysts' targets. Akerson’s work has only just started and so far, it has encountered obstacles. There is a federal investigation on battery fires in the Chevrolet Volt electric car. He also has to resolve the money-losing European operations.

In the second quarter of 2011, GM posted a profit of $2.5 billion, nearly doubling the $1.3 billion profit it logged in the same period in 2010. This marked the carmaker’s sixth straight quarterly profit since mid-2009 when it exited bankruptcy. GM also posted a jump in revenues of 19 percent to $39.4 billion.

Akerson noted that GM’s investments of the company in design, quality and fuel economy are now paying off around world as its gains international market share. GM saw its net income from North American operations jump 41 percent to $2.2 billion. In Europe, GM’s already struggling subsidiary managed to post a net profit of $102 million, thereby offsetting the loss of $160 million it incurred a year earlier.

GM considers regional earnings as net rather than earnings before interest and taxes (EBIT). This because taxes and interest are recorded centrally at the corporate level, which means that "there are no reconciling items" between regional EBIT and net attributable to shareholders.

Born in Oakland, California, on October 21, 1948, Daniel Francis "Dan" Akerson was a Managing Director at The Carlyle Group as well as head of global buyout before being tapped to join General Motors. On July 24, 2009, Akerson was named to the board of directors of General Motors as a representative of the U.S. Department Treasury, which essentially holds a 61-percent stake in the carmaker at that time.

On September 1, 2010, Akerson succeeded Ed Whitacre as CEO of GM and became Chairman of the Board on January 1, 2011. [source: TheChronicleHerald]

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