DETROIT — In his first media roundtable since adding CEO to his title just 14 days ago, General Motors Chairman Ed Whitacre said the automaker would pay back $6.7 billion in government loans by June, that selling more cars and generating revenue are GM's top priorities, and a sale of Sweden's Saab to Dutch sports carmaker Spyker is "possible."
Whitacre, the retired CEO of AT&T who became GM chairman at the request of President Obama's automotive task force following GM's emergence from Chapter 11 bankruptcy on July 10, said GM will make a $1.2 billion payment on the loan it received from the Treasury Department's Troubled Asset Relief Program (TARP) this month.
GM then intends to make quarterly payments until June 2010 when it will pay in full the $6.7 billion in TARP funds it owes. At the same time, GM will make payments on its loans from the Ontario and Canadian governments.
Whitacre said the TARP loans would be repaid by a combination of internally generated cash flow and funds from loans provided by the government through the bankruptcy. GM's government loans amount to in the neighborhood of $40 billion.
The government will be paid back in full and the United Auto Workers union's health-care fund for retirees will be funded only when GM goes public. Whitacre would not speculate on when GM would launch an initial public offering, nor did he suggest when GM would become profitable again. He said GM must produce results and publish results as well as re-evaluate all of its assets before an IPO could be launched.
But Whitacre insisted that GM's No. 1 short-term goal is to sell more cars. "We already produce great cars; now we have to sell more. We need more revenue," he said.
But he gave few specifics as to how that would be accomplished, or how GM, which has through numerous CEOs tried to change public perception about its products, would shift public sentiment. He pointed to GM's newest May the Best Car Win ad campaign, its 60-day money-back guarantee and five-year warranty as examples of how to win back customers.
Whitacre also said GM was negotiating with a single bidder for its Swedish marque Saab, the bidder being tiny Dutch sports carmaker Spyker. When asked if a deal with Spyker for Saab was "possible" or "likely," Whitacre responded "possible."
And if a buyer isn't confirmed by December 31, Saab will be eliminated, he reiterated.
Inside Line says: A long-time admirer of GM and a lifelong purchaser of GM vehicles, Whitacre's ultimate goal is simple: to make the iconic GM a great company again. — Michelle Krebs, Senior Analyst and Editor at Large
Add A Comment »
micco says:
06:42 PM, 12/16/2009
Marketing is the one thing GM has failed to do. Never has been able to market. While their cars are as good as any, GM will not say it. They need to learn how to use words and phrases to make their points. Things like, second to none, quality you can count on, advanced engineering, and so on. I can tell you that I bought a Buick in 2004. I still have the car. It has 170000 miles on it. It is the best car I have ever owned,and I am 70, and have owned many cars from multiple different manufactures. GM, you build cars you can be proud of. Now say it. It's call marketing.
firstclass says:
03:38 PM, 12/15/2009
"Whitacre insisted that GM's No. 1 short-term goal is to sell more cars"... this guy is the modern day Leonardo da Vinci because he's a genius... GM needs to stop having grandpa run their company. If GM is serious about change public perception about their products they wouldn't hire a guy offering the same old song and dance as the last CEO. GM is not the American baseball and apple-pie it use to be, and for good reason. That is because America is constantly changing.
The "may the best car win" campaign will fail because buying a car is tedious, annoying and time consuming. American's don't window shop at dealerships like they use too, they compare cars online. GM is making great cars now but what they need to do is market their cars in a new way. Just as ford is doing with their viral-marketing campaign for the Fiesta. Ford is actually releasing cars early to the public and creating great buzz around their cars.