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GM CEO: repayment of bailout could take years

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GM CEO: repayment of bailout could take years


AP Auto Writer

DETROIT (AP) -- It will take a couple of years for taxpayers to get back the billions they spent bailing out General Motors, but the company has a goal of returning the money, GM's new CEO said Thursday.

CEO Daniel Akerson told reporters that that the government won't be repaid with the company's initial public stock offering, which could happen later this year, but couldn't answer more specific questions about the sale.

"I don't think that's going to be done in one fell swoop," he said. "I think that's unrealistic."

Akerson, who has been in charge of GM since taking over for Ed Whitacre on Sept. 1, is the company's fourth CEO in less than two years. But he indicated that management will be stable in the future, saying he doesn't expect to make any changes.

"I like the team that's on the field," he said.

Akerson said the $50 billion government bailout of GM saved a lot of jobs and helped to preserve the country's manufacturing base.

GM has repaid $6.7 billion of the money the government put up to save the company and get it through bankruptcy protection last year, and the remaining $43 billion was converted to a 61 percent ownership stake. GM has filed paperwork starting the process to sell stock to the public, and a sale could come as early as mid-November.

The company would not sell any common shares, but instead plans to sell preferred stock, which pays a dividend and will be converted to common shares in 2013.

Akerson also said he's hopeful that GM will be able to create more jobs in the future, but he gave no specifics.

"I think it's clear that we have good demand, strong demand in certain models," he said. "It's my sincere hope that that demand will drive production, and obviously associated with production will be jobs."



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GM's Akerson: Taxpayer payback will take several years

September 16, 2010 - 9:00 am ET

DETROIT (Reuters) -- General Motors Co. results "over the next several years" will determine how quickly the U.S. government bailout that saved it last year is paid back, GM CEO Dan Akerson said today.

Paying back the government all at once would be "unrealistic," Akerson told reporters in a meeting at GM headquarters in downtown Detroit.

Akerson, who was named as GM's fourth CEO in an 18-month period during a shake-up in August, said he was not contemplating more management changes at the automaker.

GM filed plans for a public stock offering within a week of the announcement that Akerson would replace CEO Ed Whitacre at the top of the company. Akerson became CEO on September 1, and is expected to become chairman at year's end.

Akerson declined to discuss the IPO.

Akerson was named to GM's board in July 2009 after the automaker emerged from a government-funded bankruptcy that left the Treasury holding a nearly 61 percent stake.

The IPO, which is expected in November, would allow the government to begin to shed its stake and for GM to move away from its "government motors" image.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100916/OEM/100919895/1178#ixzz0ziSsewlC

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GM CEO Akerson confirms: Taxpayers won't get repaid soon

02:45 PM

General Motors' new CEO, Dan Akerson, confirmed Thursday that the government -- taxpayers, that is -- won't get back all the money put up to save GM from ruin in the car company's initial public stock offering, expected as soon as mid-November.

Akerson said it continues to be GM's goal to let the government sell its stake in GM, over time, for a high-enough price that the U.S.

CAPTIONBy Steve Fecht, General Motors

Treasury gets back the remaining $43 billion of bailout money. GM must be consistently profitable for investors to pay such prices, he acknowledged.

According to an Associated Press report from Detroit, Akerson said: "I don't think that's going to be in one fell swoop. So we have to post those numbers and provide some consistent results. Over the next couple of years, that will happen." GM reported a profit of $2.2 billion in the first half.

AP also reported that Akerson, GM's fourth CEO in less than two years, said management's now stable: "I like the team that's on the field."

The CEO said he won't change the announced price of $41,000 for the Chevy Volt rechargeable electric car when it comes out in December. Nissan Motor priced its Leaf electric car substantially less -- $32,780. GM says the Volt is a better value because it has a small gas engine on board to power the car if the batteries run down. Akerson said the price should drop with subsequent versions of the Volt.

According to the AP, Akerson also said:

— The company will give its money-losing European operation time to rebound because it is an important part of a global company. "We're willing to be patient and invest, and I'm confident that we'll see progress over the longer term," he said.

— GM has to develop products faster. He said his predecessor Ed Whitacre, still chairman of the GM board, righted the ship, and now Akerson must get it moving forward; play offense rather than defense.

— Unlike Whitacre, he won't appear in any television commercials. But he'd like to see more humor in the ads, which in the future will emphasize brands and not the parent company.

— He is pleased with the company's sales in September, although he wouldn't give details. GM's August sales fell 25% compared with last year's levels that got a lift from the cash-for-clunkers program.

— He updates the government, which owns 60.8% of GM shares, about every two weeks by talking personally with federal auto czar Ron Bloom.



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By Drew Johnson

General Motors may be preparing for an initial public offering by the end of the year, but current GM CEO Dan Akerson believes it will take “several years” before the Detroit automaker fully repays its bailout loans.

GM’s IPO could come as early as this November, but that doesn’t mean American taxpayers will be repaid in full by the end of 2010. Akerson told reporters that it would "unrealistic” to expect a lump-sum payback and that GM’s bailout loans likely wouldn’t be repaid in full for “several years”. The U.S. government owns a 60.8 percent share of GM.

Akerson couldn’t comment on the status of GM’s IPO due to SEC regulations, but it is believed the offering could come within the next two months.

Akerson is GM’s fourth CEO in 18-months, but he expects to see the automaker through its IPO and then hunker down for the long haul. "I don't see myself as transitional," he said.



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