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GM Up For Profit 2010

Posted: January 12th, 2010 | Author: | Filed under: Auto News, gm | Tags: , , | Comments Off on GM Up For Profit 2010

DETROIT: General Motors’ interim chief executive, Edward Whitacre, says he expects the government-owned automaker to be profitable in 2010 but that profits aren’t a prerequisite for a public stock offering, possibly before the end of the year.

In a Press Conference, Whitacre said GM is working to restore its reputation in Washington, acknowledging that last year’s $50 billion government bailout “left not a good taste in some people’s mouths.” The carmaker will also take another look at its advertising as it struggles to convince consumers to consider its core brands (Chevrolet, Cadillac, Buick and GMC).

Most of the cost-cutting and management upheaval at GM are complete, Whitacre said, and the focus now is on boosting revenue. “We have to sell more stuff,” the former AT&T ( Tnews people ) boss says. “You can always take out more costs, but we’re going to be focused on the revenue side of this business.”

Whitacre, who was recruited as GM chairman by the Obama administration as it emerged from bankruptcy last July, took over as chief executive in December, after the ouster of former CEO Frederick “Fritz” Henderson. He acknowledged there are obstacles blocking his goal of positive net income for 2010. “This business has been through a great deal. It’s a tough economy and there’s a lot going on.” But he says GM’s objective is to generate enough profit so it can pay off its $8 billion government debt by June. (It paid its first $1 billion installment last month.) Taxpayers spent a total of $50 billion to rescue GM last year, but most of it is tied up in equity and will only be repaid if the company goes public again and the stock does well.

An IPO, if it occurs in 2010, will be late in the year, Whitacre says. “Things have to be right before we do it,” he says. “People have to see us perform,” he says, adding, “we don’t necessarily have to be profitable before doing it, but it would be helpful.”

Meanwhile, the search for a permanent chief executive continues, he says, noting that the newly hired chief financial officer, Christopher Liddell, formerly of Microsoft ( MSFTnews people ), could be a candidate.


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