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FORTUNE
-- Daniel Akerson is every inch the businessman. In fact, he uses that word to
describe himself, as if he needs to remind listeners that the man running a
company so prominently saved by the U.S. taxpayers comes from the world of
commerce. After a career in telecommunications and private equity, Akerson is
an unlikely chief executive of General Motors. Famously at this point, he is
not what Detroiters call a "car guy." He's also a Republican, thrust
into the position of defending a Democratic president's passions for an
electric car and the salvation of the U.S. auto industry. (He claims to have
spoken to the president twice since becoming GM's CEO in September, 2010.)
Akerson visited
the West Coast recently and sat down for an on-camera chat with Fortune's Adam
Lashinsky on March 7 in San Francisco. He defends the "bailout" of
the car companies as articulately, or more so, than any politician. He also
acknowledges that GM needs to close factories in Europe, though he explains why
it would be tough to kill the Opel brand in Germany, despite the successful if
painful termination of historic U.S. brands, including Oldsmobile and Pontiac.
Akerson seems downright befuddled—and clearly frustrated—by the politicization
of the Chevy Volt, a project started at GM well before President Obama ran for
office. He claims to have no idea when the United States will sell its sizeable
stake in GM, and he thinks it makes all the sense in the world that the
citizenry of the nation shouldn't be represented on the GM board of directors
despite owning more than a fourth of the company. These are just some of the
topics covered in a wide-ranging conversation, an extremely lightly edited
transcript of which appears below.
ADAM
LASHINSKY: So, I'd like to start if you could clear up
something in my mind that I assume confuses a lot of people out there as well,
which is this business of the U.S. government's investment in General Motors.
The government owns about 32% of General Motors. That's common stock as I
understand it, but that's often characterized as a loan that needs to be repaid
to the U.S. government. Can you explain the right lingo to me on that, please?
DANIEL
AKERSON: Well, I mean, you're a pretty smart, financial
savvy guy. There was debt, there was preferred, and there was common stock that
the government owns. And we've paid back all of our debt, we've repaid all of
our preferred, and we sold down from 60 plus, 62%, on a fully diluted basis
they actually owned 27% of the company, and all of that was remitted to the
government. That total is just around 23, $24 billion has been returned.
So, do we owe
them in the sense of debt? They're a shareholder now. In fact, they're our
largest shareholder, and they have the ability, at their call not ours, to sell
that stock at any one point in time. So, there's nothing owed in the sense of
there's equity that they own, which is not debt.
ADAM
LASHINSKY: So, by your characterization it's the government's
call more than it's General Motors' call when the government will end its
ownership in General Motors.
DANIEL
AKERSON: Clearly. We have large shareholders. We have
200,000 plus. We have a marquis listing of first tier, bold bracket pension
funds and whatnot and mutual funds. The government is a large shareholder.
They're not in the boardroom, they don't have representation in the boardroom.
ADAM
LASHINSKY: Why not, by the way? Excuse me, wouldn't it make
sense for such a large shareholder, almost a third of the shares, to have
representation?
DANIEL
AKERSON: Well, I think that's a question better asked of
the government, but I think what they wanted, I don't know anything about
politics or the management of a national economy, and I think they, in my
opinion, wisely said, let's get -- they brought in a new board after the
bankruptcy, reconstituted the board with old directors, if you will directors
that were there prior to the bankruptcy. I came in with that new group, and
they said, okay. I think they would have had trouble getting business
executives to come in and say, is the government going to manage this business
or are we going to have businesspeople manage the business.
ADAM
LASHINSKY: Can you explain to me what level of interaction
there is? There's no formal board representation. Is there a monthly interaction,
is there someone minding the store from their perspective, in other words,
formally?
DANIEL
AKERSON: No, no. Remember, I have a fiduciary
responsibility, the board has fiduciary responsibility to all of our
shareholders regardless if they own a thousand shares or a million shares. And
once we took it public, we have certain restrictions, FTC restrictions; do we
unfairly disclose information to one shareholder regardless if they have 27% of
the company or 1%, and the answer is no.
Prior to us
going public, reentering the public market, yes, they got monthly reports and
looked at our financials, and we had shareholder meetings before it went
public, and they'd show up and they'd vote for or against various directors and
various proposals that were before these shareholders, of which there were four
at the time. The Canadian government also put money into the company at the
time of the bankruptcy.
ADAM
LASHINSKY: So, two last things on this. One is, do you have a
sense of what the government's timeline is?
DANIEL
AKERSON: No.
ADAM
LASHINSKY: And how often do you communicate with the
president? Because this is a very important investment for the U.S. government.
DANIEL
AKERSON: Well, I think I've spoken to the president twice.
ADAM
LASHINSKY: You mean since you became CEO?
DANIEL
AKERSON: Yes, yes. And he visited one of our Detroit area
plants with the president of Korea when the free trade agreement was signed
between the United States and South Korea.
But I think the
president is a supporter of the company, obviously, as was the Bush
administration. But objectively, candidly, they don't involve themselves in the
day-to-day running of the business.
