GM CEO says amount of government aid sufficient

GM CEO says amount of government aid sufficient



Automotive News | October 28, 2009 – 2:00 pm EST

 

WASHINGTON (Reuters) — General Motors Co. has no plans to request more government aid, CEO Fritz Henderson told the Washington Post on Wednesday.

In Washington for meetings with congressional and Obama administration officials, Henderson said reasonable scenarios would preclude the need for any additional assistance.

"The amount of financing provided was sufficient," Henderson told the newspaper, which posted the interview on its Web site.

Henderson said the U.S. Treasury, which holds a 60 percent stake in GM after advancing it $50 billion in bailout and bankruptcy assistance, is not involved in running the business.

"They are the major shareholders so they do want to be kept informed about how the business is going," Henderson said.

Henderson also said the government has an "excellent chance" of getting a return on its investment.

Steven Rattner, who led the Obama administration’s efforts to overhaul the auto companies this year, said last week that taxpayers have nearly recovered their investment in GM — on paper, at least.

Taxpayers hold a combination of equity and debt in GM totaling $30 billion.

Financial disclosures coming

GM has said it could launch an initial public offering of its shares as early as 2010 to begin repaying the government. Rattner said recovering the entire U.S. investment would take time.

Nearly two dozen congressional Republicans, including some members of the House Financial Services Committee, complained on Wednesday to the Obama administration about a lack of transparency in the auto bailout process.

In a letter to President Barack Obama, they asked when the public would see GM’s financial and operating information in "the same level of detail that shareholders of any other major company would expect."

GM plans to detail this week how it has used the cash left from its government-funded bankruptcy, according to a person with direct knowledge of the plans. Henderson has said GM plans to release third quarter results sometime in November.

Separately, the Treasury Department is in talks with GMAC Financial Services Inc. about a possible third cash infusion to the company, an Obama administration official said late on Tuesday.

GMAC is the traditional lender to GM dealers and customers and is taking over the auto loan business of Chrysler. GMAC is now a bank holding company.

Meetings in Washington

Henderson met with congressional leaders, including Senator Richard Durbin of Illinois, and Transportation Secretary Ray LaHood.

Aides characterized the meetings as a courtesy call that included discussion about congressional efforts to resolve complaints by more than 2,000 dealerships terminated by GM and Chrysler that their franchise rights were violated in bankruptcy.

LaHood said he was impressed with Henderson, an important endorsement for the executive and his company as he personally reconnects with senior administration officials.

Last week, the Treasury’s pay czar slashed 2009 pay rates for Henderson and other top executives at companies receiving big taxpayer bailouts. Henderson told reporters on Wednesday that he thought the cuts were fair.

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