GM CEO: Stop Arguing About the Bailout Because It Worked
DETROIT ( TheStreet) -- GM
"Four years afterwards, it's pretty hard to debate (that) it wasn't successful, $25 billion in profits later," Akerson said Thursday at GM's annual meeting, in response to a shareholder question suggesting that some people won't buy GM cars until taxpayers are repaid.
Akerson noted President Bush and President Obama had both backed bailouts. "Two administrations with radically different points of view saw the wisdom of saving a company that was central to the manufacturing base of this country," he said. "It was a wise move."
Not only is GM profitable today, but Ford
"All three are profitable," Akerson said. "That speaks to whether it was a wise decision." Without it, he said, "a huge pension deficit of $26 billion would have gone on the government books," as the liability would have been transferred to the Pension Benefit Guaranty Corp.
"I think we've done a credible job, not incredible," Akerson concluded. "Net, net, the American citizens were well-served by a government decision that was difficult for two presidents."
Eight shareholders posed questions at the tranquil GM annual meeting. They included Jesse Jackson, who raised a question about the paucity of minority dealerships as well as the need to participate in Africa's growing auto market. In response to a similar question from a subsequent speaker, Akerson said: "There are 198 minority dealers in our universe. It's inadequate ...We are making progress. I won't argue that we (don't) need to make greater progress."
GM shareholders met as a series of moves appeared to enhance the value of their holdings. The company will be added to the S&P 500 and S&P 100 indexes on Thursday after the market closes, a plus because index funds buy shares of all the companies in an index. Taking advantage of the timing, the U.S. Treasury has said it will sell 30 million GM shares on Thursday, while the United Auto Workers health care trust fund will sell 20 million shares. Also on Thursday, in a Securities and Exchange Commission filing, GM said the Treasury's holdings have declined to 219.2 million shares, down from 241.7 million at the end of May.
In the 2009 bailout, the Treasury provided $49.5 billion in exchange for 61% of GM shares. So far it has recouped about $32 billion selling stock and its ownership has fallen to about 14%.
In mid-morning trading, GM shares were up 21 cents to $34.23. Shares are up about 18% year to date.
GM also announced Thursday that U.S. customers who buy or lease an eligible new 2014 Chevrolet, Buick or GMC vehicle will be covered by a new maintenance program that includes certain scheduled services for two years or 24,000 miles, whichever occurs first. Cadillac vehicles are already covered by a more extensive maintenance plan.