GM Execs Admit Errors, See Turnaround In 3 Years
Tuesday, June 2, 2009
U.S. General Motors chief executive Fritz Henderson said Tuesday that the sale of the Hummer brand will save jobs, as another senior executive said the automaker can return to profitability within "two to three years."
Henderson and Chief Financial Officer Ray Young spoke to NPR a day after GM was forced to file for bankruptcy amid a government plan to infuse an additional $30 million to help recapitalize the struggling company.
GM announced Tuesday that it had reached a tentative agreement to sell its gas-guzzling Hummer brand but did not name the proposed buyer or the price.
"We are pleased to be able to find this solution," Henderson said. "We think we will be able to bring this to closure and protect the Hummer brand."
He said the sale likely will save more than 3,000 U.S. jobs in manufacturing and engineering, and at various Hummer dealerships.
GM sought court protection from its creditors Monday under Chapter 11 of the U.S. bankruptcy code. The company said it hopes to reshape itself within a month and emerge from reorganization in 60 to 90 days as a profitable entity with fewer employees, factories and dealers.
Henderson took over from former CEO Rick Wagoner two months ago after President Obama made it clear that he expected a shakeup at the top in exchange for government bailout money. Henderson had been vice president of GM and has been with the automaker in posts around the world for the past 25 years.
"We've made mistakes, there's no question we've made mistakes," Henderson acknowledged. "We need to learn from those mistakes, and we will.
"We have fantastic products, and we will be a company focused around the consumer," he said.
Young said he expects the company to stage a complete turnaround "within the next two to three years."
"If the economy bounces back, we will clearly be able to become profitable in a shorter amount of time," he said. "With the recapitalization, which the government is helping us through, and … the bankruptcy process that we will go through, clearly the amount of liabilities will come down dramatically."
GM is grateful for taxpayers' assistance, Young said, adding that a "leaner and more profitable company" would provide taxpayers a return on their investment.
Asked how the company could balance restructuring with the desire to produce environmentally friendly cars with better gas mileage, Young said GM must "do it all."
"We do believe that gasoline prices will increase in the future; we do believe that consumers will demand more fuel-efficient and greener vehicles," he said. "From our perspective, we're going to make that commitment, make that investment to allow us to have these products in great quantities in the future."
GM is pressing ahead with models such as the all-electric Chevrolet Volt despite the bankruptcy filing.
Pressed for pricing details, Henderson said the company had discussed something in the $40,000 range for the Volt, which is expected to roll off assembly lines next year.
"The key here is to get it launched," he said, saying a price point had not yet been set. "This is a technology that we feel very strongly about and we have market leadership in, and we want to try to preserve that."
GM also has experimented with vehicles that use hydrogen fuel cells, a technology that still has a long way to go, Henderson said.
"The company will continue its research in hydrogen fuel cells," he said. "We have demonstrated it can work. What is far away is the commercialization of the technology."
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