CEO Akerson: GM Back On Offense
DETROIT (WWJ) – General Motors CEO Dan Akerson says, after a return to steady profitability, the company is back on offense.
The company’s stock price is on the rise, it’s making money, and is rejoining the S and P 500. Akerson says that’s recognition that GM has come a long way in the four years since bankruptcy.
“I think the market recognizes that we’re no longer bedside and on the emergency list,” Akerson told reporters following the company’s annual meeting. “We’re up. We’re moving around, and we’re taking food.”
The low key nature of the meeting was proof of how far GM has come. Annual meetings became noisy events as GM was heading to bankruptcy. Only about two dozen shareholders attended today’s meeting.
They heard the GM CEO outline a plan that, starting with the 2014 model year, will include free maintenance for the first two years of ownership. It will include free oil changes, tire rotations and safety inspections on most GM vehicles.
“It makes sense to do this to kick the ownership experience off on the right foot,” said Akerson, who added that it’s also important to get owners used to taking their vehicle to a GM dealer for service.”
Early reaction to the new plan is fairly positive, with analysts saying car companies need to do all they can to be customer friendly.
“With the new maintenance program, GM now can sway buyers on the fence from a competitor that doesn’t offer a comparable program, and could attract additional buyers who are shopping based on price,” said Alec Gutierrez, senior market analyst at Kelley Blue Book. “While this can help to bring customers into the showroom, it still comes down to product.”
General Motors customer friendliness was challenged by Reverend Jesse Jackson, who says there aren’t enough GM dealers in urban areas, and there aren’t enough that are owned by African Americans.
“There are four thousand GM dealerships, 36 are African-American.”
Jackson called on GM to appoint a commission to find ways to expand the number of African-American owned dealerships, and to reach out to the minority community in general.
“How does one get to those who make a decision on how to expand the marketplace,” he said. “At the end of the day Black America represents market, money, talent and growth.”
Jackson also challenged GM to invest more in Africa, where emerging markets could create growth opportunities.
GM has factories in South Africa, Kenya and Egypt, said Akerson. He said the company would look into expanding its presence on the African continent, and to become more inclusive here in the home market. The GM CEO said he and North America President Mark Reuss meet often with the company’s minority dealer council.
“There are 198 minority dealers in our universe, and it’s inadequate we understand that,” said Akerson. “We are making progress. I will argue that w need to make more progress.”
The GM annual meeting comes almost four years to the day that GM began its month long bankruptcy. Akerson did have to face one shareholder–a financial planner–who said here clients wouldn’t buy GM vehicles or GM stock. Akerson said, for the most part, the company’s success has helped it put the “Government Motors” identity in the past.
“Four years afterward, it’s pretty hard to argue it wasn’t successful.”
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