GENERAL MOTORS (GM) is fighting a war on several fronts as it labours to sell its Opel unit in Germany, repay debts to the US government and persuade consumers to buy its cars, but it remains on track for an initial public offering in the second half of 2010.
GM, which restructured this year in a fast-track bankruptcy process, aims to offer shares to the public next year to allow the US and Canadian governments and other stakeholders to begin exiting their investments in the company.
“The most important thing we can do is perform” to push the company towards a successful public listing, said Fritz Henderson, GM’s chief executive, in an interview this week.
“All four of our principal shareholder groups want us to go public.”
Most of the restructuring GM set out to enact as part of the viability plan it presented to the Obama administration has now been completed, Mr Henderson said. Mr Henderson speaks each week with manufacturing tsar Ron Bloom and what’s left of the US government’s automotive task force as his focus has shifted toward communicating with GM directors.
“I probably talk to Ed Whitacre [chairman] or some board member daily,” he said. “The board really is the body providing oversight of management for the shareholders.”
GM is hoping to be able to pull some outside talent into key areas of the company, he said, but is still in negotiations with Kenneth Feinberg, the US Treasury compensation chief, over potential pay restrictions.
As the government becomes less enmeshed in the company’s management, GM faces an uphill battle to convince more consumers to buy its vehicles.
The economic slump has driven GM to expect car sales of roughly 10.5 million this year and 11.5 million next year, which Mr Henderson said would still represent “a depression level of demand”.
Some degree of buyer reticence also stems from concerns about GM’s financial strength. GM aims to repay the $8 billion it owes the US and Canadian governments before the debt’s 2015 due date, he said, though it was too early to predict how soon that could occur.
GM’s model launches this year have been “very well-received”, he said, rattling off a list including Chevrolet’s Camaro and Equinox, the GMC Terrain, Buick LaCrosse and Cadillac SRX. The market’s reception to GM vehicles more broadly is showing encouraging signs, he said, but those results are going to be slower to come by.
Mr Henderson said the rapid growth of auto sales in China, from 2.5 million units to an expected 12 million this year, had outperformed expectations. He believes the Chinese market will continue growing at a healthy pace. “China and the US are going to be the two largest markets in the world,” he said. “I’d prefer to see both growing, and not necessarily worry about which is the largest.”
While consumers do consider the strength of carmakers when buying cars, Mr Henderson said GM research indicates those considerations are “way down the list” when compared to other factors.
– Financial Times Service