Three years after American taxpayers bailed out industry giant General Motors, GM posted the most profitable year in its century-long history. The bailout saved an estimated million jobs and allowed the company to invest nearly $10 billion in revitalizing the industry. When asked about the company’s debt to the government, Dan Akerson, GM’s Chairman and CEO, stated, “We paid all that back plus dividends and interest.” The bulk of the repayment came in the form of stock. Of the more than $52 billion committed to GM, the U.S. Treasury’s stake remains at $26.4 billion. “Like every other shareholder, they can sell it when they want,” Akerson said, though he suggested that they do so in a controlled way over time.
What’s driving the new GM? It’s not about where the market is, but where it’s going, and according to Akerson, all signs lead to cleaner and cleaner energy. “I want my grandchildren to inherit a better earth than I did back in the 50s,” he said, “and we’re not going to get there for free.”
Is such an environmental strategy good for business? Looking at the company’s current success, who can argue? GM is obviously doing something right. A prime example: the 2012 Chevy Cruze ECO, with its 42-MPG performance and low sticker price, is the best-selling compact car in America.
In fact, GM is investing in a wide range of clean fuel technologies—from electric batteries to natural gas to hydrogen fuel cells. “Everything is on the table,” Akerson said. “Sometimes you have to be a pioneer, do the right thing, shape and mold our future.” The Chevy Volt, which didn’t reach expected market penetration, is a case in point. In response, GM has learned to scale production to inventory. “We’ll make investments where we think the long-term future is in our interest.”
Another lesson learned came by way of recent extreme global weather patterns, most importantly, natural disasters in Japan and Thailand. According to Akerson, “What it tells you is you have to diversify your supply chain, and we are actively doing that.”
Regarding the Heartland Institute, which is funded by the General Motors Foundation, Akerson said he was not aware until recently of its role in providing information to schools that may run counter to GM’s environmental strategy. The Heartland Institute is not funded by the company, he explained, and “in terms of good governance, I cannot sit on the Foundation’s board.”
And what’s Akerson’s perspective on political decisions that could impact his business—revised CAFE standards, a carbon tax, gasoline tax? “This is the new GM,” he said, “and rather than sit in the corner and be obstreperous, we want to be part of the solution, we don’t want to be part of the problem. I try to be pragmatic and allow for all possibilities.”
Disclosure: General Motors is an underwriter of Climate One. For a list of all underwriters visit our supporters page.
– Lucy Sanna
Photo: Ed Ritger Climate One, The Commonwealth Club HQ, San Francisco (March 7, 2012)