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GM wants executive pay restrictions relaxed


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GM wants executive pay restrictions relaxed

Salaried employees to forgo pay hikes in 2010

From wire reports December 10, 2010 - 9:47 am ET

UPDATED: 12/10/10 2:26 pm ET

WASHINGTON (Reuters) -- General Motors Co. CEO Dan Akerson said today the automaker is seeking "some relaxation" in the restrictions on executive pay imposed by the U.S. government.

"We have to be competitive and retain talent," Akerson said in response to a question at the Economic Club of Washington, D.C. "We're starting to lose them now."

Akerson said he would meet with the U.S. Treasury's special paymaster later today to discuss the issue of executive compensation.

The Detroit News reported today that GM salaried employees will not receive raises in 2011.

The continuation of GM's salary freeze, Akerson told the Washington group, is meant to "lead by example," as the automaker rebuilds its balance sheet in the wake of the federal government's restructuring of the automaker, the News said.

Akerson guided GM through its blockbuster initial public offering in November that reduced the U.S. Treasury's stake to about 33 percent from 61 percent.

The IPO for the top U.S. automaker came just over a year after it was put through a restructuring in bankruptcy funded by the Obama administration.

In his speech, one of his highest profile public appearances since the IPO, Akerson repeated several key points that GM and its bankers made to investors during the run-up to the record $23.1 billion share offering.

Akerson said investors "saw a new company" with a competitive cost structure, leaner inventories, stronger brands and new success in avoiding the damaging discounting that it relied on to drive sales earlier this decade.

"All of which is resulting in improved earnings and cash flow," Akerson said just blocks from the executive office building where Obama administration officials orchestrated the company's wrenching overhaul.

Akerson said GM was positioned to break even if industry-wide auto sales were to retreat and was "better positioned" than other automakers to take advantage of the "huge growth potential" of China, India and Brazil.

'Near-death experience'

Akerson, who in September became GM's fourth CEO in under two years, said the automaker was determined to never repeat the missteps that led to its 2009 bailout.

"We are humbled by our near-death experience," he said.

Citing his work in private equity before joining the automaker in September, Akerson said few investors would have bet on the company 18 months to 24 months ago.

“Three weeks ago, people by the hundreds of thousands did just that,” Akerson said. “They saw a new company positioned to break even in the U.S. near the bottom of the cycle, not the middle.”

The company sells more cars with its remaining four brands of Cadillac, GMC, Buick and Chevy than it did a year ago with eight brands, he said.

“For the first time in a generation, the auto playing field in America is level,” Akerson said. “Now the best car can truly win again, and we're going to fight very hard to be the company that builds those cars.”

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101210/OEM02/101219990/1178#ixzz17kRLZovZ

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