GM's Whitacre: A Sense of Urgency to Repay Taxpayer Money

GM's Whitacre: A Sense of Urgency to Repay Taxpayer Money

By Michelle Krebs November 10, 2009

General Motors has made remarkable strides since emerging from bankruptcy July 10 and is "better positioned for success than I thought was possible" then, said Ed Whitacre in his first public speech since becoming GM chairman in July.

"We're getting into a fighting shape. We have a long way to go, but we're definitely on our way," he told an audience at Texas Lutheran University near San Antonio. The retired AT&T chairman taught at the university just before taking GM's top job at the U.S. government's behest.

Whitacre said there's a strong sense of urgency inside the automaker to repay the billions GM owes in government loans.

"I can't tell you when (we'll pay it back) but it'll be sooner than you think," Whitacre told a political science student who asked when the company would repay taxpayers.

Whitacre told media in interviews before the speech that:

- GM will focus on repaying its loan to the government before it contemplates an initial public offering (IPO). GM may repay some of its $50 billion in U.S. bankruptcy by year end. He wouldn't commit to a date for the IPO;

- The new GM board of directors will be actively involved in the business, as demonstrated by overruling GM management by deciding to keep and not sell Opel. "We asked ourselves, how can we be a global player and not play all over the globe," Whitacre told a student in response to a question regarding GM's U-turn last week on Opel. "Our financial fortunes were better, and we decided we were better off keeping Opel than selling it."

- GM will invest its own money to restructure Opel and hopes to win funding from European governments to help;

- GM's board backs CEO Fritz Henderson.

A Reluctant Recruit

Whitacre told the audience he was reluctant to take the job as GM chairman when asked to do so. "I thought long and hard. I really didn't want to do that. I was retired."

However, in the end, he said yes. "I believe deeply America needs a strong vibrant auto industry, and I believe this iconic company needs to lead the auto industry. And I'll do my part to make that a reality."

A part Whitacre played early on was a starring role in GM's new ad campaign -- May the Best Car Win -- that includes a 60-day moneyback guarantee, which is extended into January. "If a custoner doesn't like it, they can bring it back. That's a big step for a big company to take that kind of risk," he said.

Whitacre said while pleased about the structural changes that have been made at GM, but his optimism comes from the new products being introduced and on their way in the future. 

 "At GM," he said, "our work is cut out for us, but we are making some good solid progress." -- Michelle Krebs, Senior Analyst and Editor at Large

 

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.