DETROIT --- 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 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.
Akerson, a former telecommunications industry executive and GM board member since July 2009, said the $50 billion government bailout of GM saved a lot of jobs and helped to preserve the country's manufacturing base.
The bailout has bred resentment with some car buyers and hurt GM's sales. The automaker hopes the stock sale will end its government ownership and raise money for investment and to reduce debt.
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.
Akerson, GM's fourth CEO in less than two years, also indicated that management will be stable in the future, saying he doesn't expect to make any changes.
The man he replaced on Sept. 1, former CEO Ed Whitacre, said in August that he expected the stock to be sold all at once, but Akerson said that was unrealistic. Although he said no investor has "infinite patience," he indicated that it would take consistent earnings from GM and several stock sales before the money is returned.
"I don't think that's going to be in one fell swoop," he said. "So we have to post those numbers and provide some consistent results. Over the next couple of years that will happen," he said.
President Obama also has said all taxpayer money will be returned, but spokesmen later said he meant the money his administration pumped into GM.
GM made $2.2 billion in the first half of the year, a strong sign to investors that it is much leaner and healthier than it was before bankruptcy.
The company will not sell any shares of common stock, leaving that to the government and its three other shareholders. It plans to sell preferred stock, which will be converted to common shares in 2013.
Also Thursday, Chrysler and Fiat CEO Sergio Marchionne said he expects Chrysler's IPO to take place in the second half of next year.
Wait a minute.....The TV ads that GM was running said the loan had been paid back ahead of schedule, in full, with interest. We haven't been lied to have we?Even someone who doesn't know about finance could see it was a lie. GM took some of the money the government didn't call a loan and paid off the loan with it. They still owe the money. I've been a loyal GM customer for 20 years but my next purchase will not be GM.
The loans WERE paid back in full, technically speaking, when GM issued a 61% equity interest.
However, GM doesn't want the US government to control their company- who would want that, they are too afraid the Feds are going to insist on fuel efficient cars and better pollution control and safety features on their cars- so they want to pay back the government to regain control.
They want to issue preferred stock so that the US govt share of the pie is much, much smaller- way under 50%.
It's like me saying "I owe you $1,000. Ok, I'll give you $200 and my car instead of the remaining $800. I'll still keep the car, I'll still drive it, but I'll sign it over to you until I pay you the $800.00."
I've paid your debt, technically speaking, but I want my car back, so I'll still come up with the $800.
Those ads were political trickery to fool the American sheeple into thinking all was well with Government Motors and that obama's plan worked.
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