General Motors' top executive on Tuesday said the auto giant's remarkable rebound over the past two years may be imperiled by a sputtering economy.
GM has made "tremendous progress," but the company's fortunes are still wedded to the larger economy, Chairman and CEO Dan Akerson told reporters before the start of the company's first annual shareholders meeting since 2008. "We're in the midst of a transformation," he said. "Our stock is down 13%. There is a lot of uncertainty about a jobless recovery and about gasoline prices. So there is some question about how strong the recovery is. "This company is more closely tied to the gross domestic product. So I am concerned about it," Akerson said, adding that the growing federal deficit continues to hobble the economy.
|Akerson: GM's fortunes are tied to the overall economy. "So I am concerned about it." |
"I don't think it would behoove our great nation to default on its debt," he said, in reference to a political fight in Washington over increasing the nation's debt limit. GM filed for bankruptcy protection on June 1, 2009, amid a horrific global economic slump, and emerged just weeks later as a new entity led by the U.S. government, which pumped in some $50 billion to help the auto giant survive. Expansion, Pension Liability on GM's Radar Akerson said GM's immediate plans include expanding both its international and domestic business while addressing critical issues such as its unfunded pension liability. "We want to grow domestically and internationally," Akerson said. "We want to grow share profitably. But we don't want to lose share either. We can now be profitable in North America at the top and at the bottom of business cycle. "At some level, scale matters. We've cut our pension liability in half. I would like us to see a fully funded pension liability here in the U.S." Akerson said that if GM had gone through a conventional bankruptcy, the federal government would have been saddled with an $18 billion in pension liabilities. Today -- nearly two years after emerging from a government-led bankruptcy -- GM's pension liability has been cut in half. Akerson also told reporters he didn't know if the U.S. Treasury would sell all or part of its remaining 27% stake in GM. "I think the government has said that they would review the situation in late summer or early fall. At the end of the day, they're going to make the call." The company had no shareholders meeting in 2009 as the company went through bankruptcy, and in 2010 held a private meeting in with shareholders from the United Auto Workers Voluntary Employee Benefit Association, the U.S. Treasury Department and the Canadian government. International Sales Surging GM reported that sales by joint ventures in China in the first five months of 2011 topped 1 million units, reaching a record 1.08 million units for the period. GM's May sales in China totaled 190,674 vehicles. Its Shanghai GM joint venture outperformed the market again, achieving record demand for its lineup of Buick, Chevrolet and Cadillac passenger cars. GM also said it expects its sales in Brazil, its third-largest market, to grow from 650,000 units in 2010 to 700,000 units this year.
Copyright Agence France-Presse, 2011