For Sale: Reconditioned General Motors; New Paint Job But Engine Needs Work
The Detroit Free Press reported in its August 10, 2012 issue that the CEO of General Motors, Dan Akerson,is growing frustrated with the lack of progress at the company (Click here to see article).
“You shouldn’t stand around waiting for somebody to tell you where we’re going to go,” Akerson said in a conference call with employees, according to the Associated Press, which said it was allowed to listen. “We’ve got to get this company and the culture into the 21st Century.”
The article reminded us of the blog we wrote (reproduced below) nearly two years ago and shortly after the company’s initial public offering of shares. That blog proved prescient as we foreshadowed the challenges the company would face (and which Akerson acknowledges in the article above).
“While we think there is some small cause for celebration in GM going public today and repaying a portion of the taxpayer’s money, we believe GM has a long way to go before proving it is a completely rehabilitated company.
GM still has a number of problems to face as a public company. Their market share, product lineup, and profitability metrics have all improved. However, in the long run, GM’s continued viability depends on consumer confidence and labor costs. People need to want and be able to afford GM’s products. The relationship between GM management and the union has been stormy in the past, and a change in this relationship is a necessary precursor to future success. As taxpayers and Midwesterners living in GM’s backyard, we hope they get it right and we are able to celebrate the company many times in the future.”
We welcome all comments and questions.
Bob Bilkie, CFA