Today, General Motors announces its first quarter earnings. Celeste interviews the CEO and chairman of General Motors, Dan Akerson, about how the company has fared since it was restructured by the federal government in 2009.
Dan Akerson, chairman and CEO of General Motors: This is not the first time that the American government has injected themselves into the American economy. If I asked you who is the biggest owner of commercial property in the United States 1990s, you wouldn't say the United States but it was. Savings and Loans crisis, they pumping in $394 billion dollars. Call it around $400 billion doll dollars. Not $50. $400 billion.
So it's not unusual to see governments for a short period of time inject themselves into a marketplace to stabilize it. The analogy I like to make, you remember last year when Joplin, MO had the terrible tornado or Katrina: It's in the basic DNA of Americans. We don't walk to help our fellow citizens, we sprint. This part of the country, the arsenal of democracy saved this country in many respects along with many soldiers, marines, coastguard's man. But it built the arsenal that saved Western Democracies.
And then what did we do. In the interest of international economy, international trade, we lowered our trade barriers. We lowered them in Japan, we lowered them in Germany, our mortal enemies. And they built export economies to the detriment of this part of the country. It didn't happen overnight with a hurricane or tornado: It happened over 30 years. So a million jobs were saved, that's what I say.
$150 billion it's been reported in terms of total tax revenues that would've gone by the boards had the company not been saved. And all the supply chain that would've gone with us. And then if you back off and you say, at the time we went under, or we went into bankruptcy, we had about a $25 billion pension deficit. We were the largest pension fund in the world. $134 billion. It was about $25 billion. Just in my tenure we've gotten it down to $12. Good progress but $12 billion, that's still a big number.
Celeste Headlee, host of The Takeaway: That's still a lot.
But think back if we'd gone into bankruptcy and liquidated in '09. That $25 billion would've gone into the PBGC, Pension Benefit Guarantee Corporation, which is government sponsored. Footnote to that comment is, $25 billion would've bankrupted PBGC. And whose dime would that've been on? It'd have been on the taxpayers dime. That's never in the calculus. So, you know I know this is a political year and everybody wants to argue for tactical and political advantage. Again, I don't have the luxury to do that. I'm not making a political statement. I would say, let's be pragmatic about it: It worked.
And so, I think as a government, we the people — by the way, I'm a Republican.
I know, it's on your Wikipedia page.
I think the government does have an obligation to step up and help its people. This wasn't a giveaway. It was an investment. It was an investment from the American people.
I wanted to read you a comment that Mitch Daniels, governor of Indiana, made in an interview with the BBC. He says, "Let me just make this point: The reason I remain uncomfortable [with the bailout] is because we lost more jobs in the recreational vehicle industry, for example, in this state than were threatened at GM and Chrysler. No one offered to spend hundreds of thousands per worker on them. How was I to tell those people, 'your job is not worth as much because you're not as politically connected as the people at those two companies.'" How do you respond to that?
I don't want to debate that with the governor because maybe they should have. I won't argue that. But I know there were a million people at stake here across many state lines, including Indiana. We have plants in Indiana too. And it would've, at a time when the country was coming, potentially to an ugly outcome — think of the timeframe, '09, there was no money, there was no money put at risk. So when people say, it should've been saved in another way, it should've gone through a bankruptcy controlled bankruptcy. I was in private equity. I was managing many buyouts, where you do a big buyout of corporations with a portfolio of $50-$100 billion. There was no way you could've gotten me to put a billion dollars into this thing without the restructuring that was really mandated by the government. I don't want to get into the politics of comparing my situation to somoene else's. This was good.
And yet you're stuck in politics. Just recently Joe Biden said, "GM is alive, bin Laden is dead." Your company has become part of the politic discourse and it will probably be moreso as we get closer to the presidential election. Does that hurt or help GM?
I don't know, I think most people have gotten past it. Of course it's a political year, it's come up. Gee, wasn't there a time when Chrysler was saved back in the 80s? I don't remember things being quite as divisive as they were now. Again, I'm not a politician. I'm not that quick, smart, on an interview like this. But I will say, I know it worked. I know jobs were saved. And I'll tell you what. Go back to the arsenal of democracy? Great countries do two things really well. They make things. They manufacture and create value. They also grow things. This country's blessed with a great manufacturing base and a great agricultural base. To have forgone it by years of mismanagement, maybe by management or the union or both? Now we've got a 2nd chance. We don't deserve a 3rd. We've got to get it right this time or we don't get it in my opinion.
And it's been saved. It's controversial. But you know, I've got a hand, I picked up a hand, this management team picked up a hand and we could've failed and we're not gonna fail.
Dan Akerson, chairman and CEO of General Motors, thank you.