That General Motors sold me an Oldsmobile station wagon that died after seventy thousand miles and a Buick that had horrendous electrical problems. That General Motors drove millions of us to buy Honda Accords.
That General Motors ended up begging Congress for bailout billions and was treated with open contempt by United States senators who said GM wasn’t worth the waste of one taxpayer dime. That General Motors ended by being bailed out, first by President Bush, then President Obama. It went through bankruptcy, and shed bad debt, health care obligations and obsolete factories.
In the three months before General Motors filed for bankruptcy last year, it lost $12.9 billion dollars. But since that process ended, the company has undergone a turnaround that’s hard to believe.
GM made a profit of $1.3 billion dollars in the last three months. Worldwide revenue was ten billion greater than in the same period a year ago. Over the last month, the company has been preparing a stock offering, so they could pay back the taxpayers and no longer be known as “Government Motors.”
Then, yesterday, Edward Whitacre Jr., architect of GM’s comeback from the dead, suddenly announced he would step down as CEO at the end of this month, and resign as board chairman at the end of this year. He’ll be replaced by a man he groomed for the job, fellow board member Daniel Akerson.
The two men seem similar - hard-driven, task-oriented, former telecommunications executives. Neither has a car background,
But that didn‘t seem to hamper Ed Whitacre in the least. He made tough decisions, promoted those who were performing and got rid of those who weren‘t. His priority was to save and focus the company. There were many who doubted that it could be done.
But Whitacre did it - for now, at least. And not just on paper. General Motors is making profits not by shuffling paper but by selling cars, and selling them in North America.
The company is adding to its cash reserves, running lean and mean without any new massive recalls or quality complaints.
That doesn’t mean General Motors can go back to business as usual. Ford made twice as much in the last quarter.
General Motors’ market share is below 20 percent, and could easily be overtaken by Ford, Toyota, or both.
And while GM can issue stock, it still needs to convince investors that it is safe to buy and a good investment besides.
Ed Whitacre, however, can return to Texas knowing that he succeeded beyond almost anyone’s expectations. He probably could have led GM till his teeth fell out. But he left when he had the mess cleaned up and the motor running. just like he said he would.
What’s baffling is that the Democrats don’t seem to be trying to score political points off GM’s revival. Republicans mostly wanted to let it die. President Obama insisted on trying to save GM, appointed Whitaker to run it, and hundreds of thousands of jobs were saved.
That sure beats the alternative, especially in Michigan.