GM CEO: We’re Tackling Biggest Problems—Europe, Pension Obligations
General Motors Corp. CEO Dan Akerson said June 12 that the automaker is tackling its problems in Europe and its massive pension obligation as it seeks to revitalize its sagging share price.
Speaking to reporters before GM’s annual shareholders meeting at the automaker’s headquarters in Detroit, Akerson cited its European problems, pension obligation and the overall threat of the European debt crisis as the main drags on GM’s stock.
“First and foremost, we have to fix Europe, or at least get it to where it doesn’t drain the corporate coffers,” Akerson said.
In the first quarter, GM lost $256 million in Europe. The automaker has lost more than $16 billion there since 1999.
Akerson said GM recently struck new labor agreements with its unions in Poland and England, which he said has “a significant impact on our potential future in Europe.” He said GM is in “constructive” discussions with its unions in Germany and elsewhere in Europe.
In late June, GM officials are expected to outline plans to stem the losses in Europe.
Akerson also said he would consider offering a pension buyout to GM’s more than 400,000 hourly retirees and dependents as a way to reduce the $134 billion pension obligation on its books, which Akerson said is the largest of any U.S. company. This month, GM said it will offer a buyout to some of its salaried retirees.
“It’s certainly something we would look at if the opportunity arose,” Akerson said of a possible hourly pension buyout. Many analysts have speculated that GM could take that step as a way to mitigate one of the largest threats still hanging over the company three years after its 2009 bankruptcy.
Akerson defended the company’s beaten-down stock price, saying that many automotive rivals also have seen their shares sink amid Europe’s debt crisis. He said, “There are a lot of things to be pleased about” with GM’s performance globally, including strong profits in the United States and a growing market share in China.