GM's Akerson talks about auto industry bailout and a 140+ mile range Volt
GM's CEO Dan Akerson made a pair of appearances in San Francisco last week in which he made a strong case for the Chevy Volt, improved fuel efficiency, as well as the government playing a role in shaping industry. His comments come amid a swirling politicized controversy surrounding General Motors, the Chevy Volt, global warming, automakers efforts to reduce environmental impact, and the automobile industry bailout. Akerson made it clear that the "new GM" (as he called it) was intent on being part of the solution, rather than being obstreperous, and to that end that GM is exploring every alternative to gasoline, every fuel efficiency technology, and will continue developing vehicles like the Volt.
Clearly Akerson's answer to the question "Should GM kill the Chevy Volt, stand pat, or create the Volt2?" is not only to build the Volt 2.0, but he described it during an interview with the Climate One program of The Commonwealth Club.
GM's Dave Barthmuss reported, on thefutureiselectric.com, about a lunch-time meeting between Akerson and a group of 30 Chevy Volt enthusiasts to talk about GM's commitment to a sustainable future. Akerson, a Volt owner himself, talked of having burnt only 1/10th of a gallon of gasoline since February, and that among the Volt owners in the meeting one had driven nearly 13,000 miles on the initial tank of gasoline sold with his Volt.
The interview with Climate One host Greg Dalton was an hour of wide ranging and frank discussion about GM, the auto industry bailout, fuel efficiency, the Volt, and much more.
Akerson described the New GM as a company that can no longer be internally focused, that GM must focus on the evolution of the automobile industry, to look forward to see where the market conditions are going, to position GM correctly in the future, especially in regards to meet expected future environmental, fuel efficiency and fuel flexibility standards. As he put it GM "can't afford to focus on the near term" but must ask "What will market conditions be like in 2030?" In saying this it's as if Akerson's take on GM's bankruptcy is that GM wasn't focused on the actual direction the market was taking, but on attempting to manipulate the market forces in a way that ultimately led to GM's bankruptcy.
Speaking on the auto industry bailout, Akerson comes across as a big champion of that process. His former position was "Head of Global Buyout" at the Carlyle Group, making him well suited to critique the U.S. Government's role in the auto industry bailout. He noted there are "multiple options or avenues to a successful restructuring" of any troubled corporation, and that, in his opinion, as someone who had a front row seat, was that "it was coming off the wheels," meaning that GM was about to disappear completely. The cost if GM were to have failed would have been 1 million jobs, $150 billion in lost taxes, and deep damage to America's industrial infrastructure. The old adage "What's good for GM is good for America" comes to mind, but clearly Akerson's opinion is that, in the context of the deep recession of 2008-9, that another 1 million lost jobs would have turned the recession into a full scale depression.
Akerson noted that two Presidents (Bush and Obama) "put money into this company" (GM) and that neither "were running for office at the time." This fact flies in the face of the political spin machine that's trying to pin the bailout solely on Obama's shoulders, when in truth it was a bipartisan effort. That the leadership in that time "made the pragmatic decision to save this company" rather than take the cost just outlined. For that matter, is the bailout a failure as the spin machine might have us believe, or is it a success? By Akerson's reckoning, it is not only a success, but Americans "ought to be very proud our government stood up regardless of party affiliation" to do the bailout.
What about the "Government Motors" aspect to the company, the fact that the Federal Government directly owns a large chunk of GM. First, Akerson noted that GM has already paid back the government loans, as well as paid back the Preferred stock owned by the government. GM's IPO was the largest IPO in the history of modern finance, and a large chunk of those shares went to the Federal Government, leaving the U.S. owning 27% of GM "on a fully diluted basis". Akerson describes the Government as if it were any other share-holder, and the Government could sell those shares any time it likes, but that it has not done so. However, if the Government were to sell its holding that would depress GM's stock price. Instead of selling these shares all in one chunk, Akerson suggested the Government begin a timed sale of these shares over a 10 year period.