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GM’s CEO rejects repaying Feds for bailout losses

GM Bailout Govt MotorsHow many times did the Obama Administration promise that GM would repay every dime of the taxpayer provided bailout? And how many times have you heard the lie that GM has fully repaid the federal government for the taxpayer provided bailout? The truth is the taxpayers lost $10 billion on GM, but GM CEO says the taxpayer took a risk like any other investor. That sucking sound you hear is the government taking $10 billion out of the taxpayer’s pocket. 

by Todd Spangler

The General Motors bailout may have cost the government $10 billion, but GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses.

He says Treasury officials took the same risk assumed by anyone who purchases stock.

“I would not accept the premise that this was a bad deal,” Akerson said during a question-and-answer session at the National Press Club in Washington. He also said the government’s $49.5-billion aid to GM helped save billions of dollars in tax revenue and government social services.

Akerson spoke in the wake of Treasury announcement last week that it sold its last shares in GM and Akerson’s decision to retire in January. The automaker’s board of directors named Mary Barra, the company’s first CEO, to succeed Akerson.

The speech also came as GM announced it is investing $1.2-billion in five U.S. plants, which Akerson said is a recognition that after 15 straight profitable quarters the automaker can’t rest on its success.

“We are in a capital-intensive business that demands steady and significant investment,” Akerson said, as he discussed many of the changes that had to be made to the automaker’s corporate structure after exiting a “quick rinse” bankruptcy in 2009.

Akerson said it fell to him and his team to restore GM’s good name, transform operations and “put quality and the customer back at the center” of the company’s decision-making, a process he called “the biggest cultural change we’ve been able to infuse into the new GM.”

He said GM’s bloated and overly complex operations have been streamlined, products are better and, with the government’s help, a crushing debt was reduced.

“We’ve been trying to fix this airplane while in the air,” he said.

Akerson said that GM repaid all the debt issued by the government beginning in December 2008 when George W. Bush was still president and extending into the first year of Barack Obama’s presidency. He added that it was the Treasury’s decision — though one he clearly supported — to take an ownership stake in the form of company shares.

Asked whether GM should pay the difference between the amount the government provided the company and the return from the sale of the shares, Akerson said the “die was cast” by Treasury when it decided to take shares. For GM to make up for any shortfall could result in lawsuits from other shareholders. Those investors expect the company to resume paying a dividend for the first time since it exited bankruptcy in July 2009.

He also defended the deal as one that saved millions of jobs, saying “net-net, it was a positive for the U.S. economy.”

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Todd Spangler is a journalist at the Detroit Free Press and this article was published by USA Today