Chairman and CEO of General Motors Company, Ed Whitacre, made it clear during a recent conference that his company is more than ready to move forward with its initial public offering, saying the company is thriving now. Whitacre said, “We don’t like this label of ‘Government Motors.’ It turns off customers. It turns us off. People at GM are embarrassed by that.”
The IPO could have already been filed according to some reports, but it has not been. According to Whitacre, “We’re moving as fast as we can. It’s No. 1 on our list.”
The GM CEO believes that at onset, the IPO will be sizable enough to allow the U.S. government to sell off enough of its 60.1 percent ownership in the company to ensure that it is no longer the majority shareholder in the public GM. Whitacre says the IPO will bring in plenty of investors. “I think the appetite is going to be really good for GM stock,” he said.
The IPO may be the largest in U.S. history; the potential is there for major investor interest, especially considering GM’s apparent second quarter success on the heels of an $865 million profit in the first quarter of 2010. Whitacre offered no specific numbers, but hinted that the second quarter showed very strong financial performance.
“If you liked the first quarter financial results, stay tuned for the second quarter next week,” he said. “I think you’re gonna like it more.”
Whitacre, though brief, also offered a few glimpses of the company’s rapid recovery since undergoing bankruptcy and restructuring just last summer. In his opinion, “GM still has way too much bureaucracy.” Efficiency and speed are improving, however. GM was able to purchase AmeriCredit, the auto financing company it plans to use as its captive-lending unit, very rapidly with no fuss. “A month to do the deal, start to finish. No consultants,” reported Whitacre.
The forward-looking CEO is also looking at Internet marketing strategies as “opportunities waiting to be explored.” The company is looking forward to a future of “smarter, faster” customer negotiations, although Whiteacre added, “Whatever we do in this space will be with the support of our great GM dealers.”
Arbitration hearings with closed franchise owners seeking reinstatement will be over on November 1, 2010. Whitacre predicts that by that date, GM will have about 4,500 dealers, which is a 25% reduction from pre-bankruptcy numbers. Even so, he said that GM’s dealer network will remain the largest in the country.
This year GM has been able to add around 7,000 jobs and it may be reopening a closed assembly facility.
Whitacre also commented about his future with the company once it is publicly owned again. He gave no concrete details, but joked, “At my age, I’m not a real long-termer.”
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