New GM emerges from bankruptcy
The revamped General Motors is supposed to be all new, including its board of directors. The government owns half of the company, but will it also have a role in day-to-day operations? Alisa Roth reports.
General Motors CEO Fritz Henderson holds a press conference with the details of GM's emergence from bankruptcy. (Bill Pugliano/Getty Images)
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KAI RYSSDAL: The new GM has the same name as the old bankrupt one: GM. Other than that, the two companies couldn't be more different. CEO Fritz Henderson made things official this morning. He talked about rolling out 10 new models in the next 18 months. And selling them on eBay, as I said. The company will be more responsive to its customers, more willing to listen to criticism.
And the boardroom's going to look a lot different too, now that the company's owners include the federal government. The Obama administration has promised to keep it's hands off. But can it?
Marketplace's Alisa Roth reports.
Alisa Roth: All over the world, it seems like rescuing carmakers bas become practically a requirement for governments. Most bailouts call for keeping plants open and running.
The U.S., on the other hand, has insisted that GM's makeover include shedding some serious weight, to be a smaller and leaner company.
Now don't get the wrong idea: There won't be any government employees either at GM's headquarters in the Renaissance Center or on the company's board.
Daniel Roos studies the auto industry at MIT. He says the government should stay out of day-to-day operations.
Daniel Roos: Once you open that door, it's a slippery slope. The government is not appropriate to run an automobile company.
But the government does own more than half the new GM and will get to appoint four of the new board's 13 members.
Ed Peper's in charge of Chevrolet, one of the brands the new GM is hanging onto. He says GM will be run just like any other company.
Ed Peper: We will be reporting to the board. But they're going let us run the business on a day-to-day basis. That's what they pay us to do.
The government does have an investment to protect though. And MIT's Roos says it should have a say.
Roos: Now clearly if they decide at some point in time that this thing isn't working out and they're going to stop the payment or decrease the payment, that's an appropriate thing to do.
But some critics say the government's already acting like a backseat driver: Influencing what plants should stay open, where new cars should be made and what dealerships should not get shut down.
I'm Alisa Roth for Marketplace.
Ryssdal: A quick note on GM sort of being out of bankruptcy. It's true that the new GM is free and clear of court supervision. But the old company, the one with all the debt and liabilities, that's still in Chapter 11. It's now called "Motors Liquidation Company."
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