GM Hopes To Be Revitalized After Bankruptcy
STEVE INSKEEP, Host:
And this morning we've called up Ray Young. He is General Motor's chief financial officer. And he's on the line from New York. Welcome to the program.
RAY YOUNG: Good morning. Thank you for the invitation.
INSKEEP: Now, we know GM is going to get smaller, but I wanted to understand how small. Are you never again going to be the world's largest automaker?
YOUNG: Well, our objective really is not to be the largest. Our objective is to be the best. You know, when we look at our plan, we recognize that we clearly will be a smaller company in the future, with four core brands instead of eight brands right now, 34 nameplates instead of 48. A smaller dealer network, a smaller manufacturing footprint. At the same time, when we execute this plan, we will clearly be a leaner and more profitable company, which will allow us to repay the investment, which we're very, very appreciative of the American taxpayers to help us through this downturn.
INSKEEP: Although I imagine you're going to have to write off a lot of that $172 billion of other kinds of debt that you've got out there.
YOUNG: With the recapitalization, which the government is helping us through, and through the bankruptcy process that we will go through, clearly the amount of liabilities will come down dramatically.
INSKEEP: How soon, if can ask - I'm sorry, but time is short, forgive me for interrupting - but how soon do you think, how many years do you think it'll take before GM is actually making a profit?
YOUNG: Our estimates - we bring down the cost structure and we execute a product plan - there's no reason why we can't become profitable over the next two to three years.
INSKEEP: Two to three years?
YOUNG: That's correct.
INSKEEP: Even if the economy does not bounce back strongly?
YOUNG: Again, if the economy bounces back, then clearly we will be able to become profitable in a shorter period of time.
INSKEEP: Now, I want to ask - go ahead.
YOUNG: Because that's one of the biggest variables, is to understand how the path of both the U.S. and global economic recovery will progress. Our projections right now assume a more conservative path of recovery.
INSKEEP: Mr. Young, in Scott Horsley's report just a moment ago, we heard that a deal was made for GM to build fuel-efficient vehicles in the United States rather than China. The union pushed hard for that, but it seems that GM's judgment had been that it'd be more profitable to build them in China. Is politics going to get in the way of returning to profitability?
YOUNG: Well, from our perspective, it actually makes good sense for us to build this vehicle in the United States, especially if the volumes are going to be significant. We reached an agreement with the UAW - it's going to be a competitive labor contract - for us to build this vehicle. So from our perspective, this is both good for General Motors and good for America.
INSKEEP: Although you know, we just hear about the pressure on GM to restructure and save American jobs and invest in energy-efficient vehicles, which can cost a lot of money upfront and may not make it back right away, and also try to make a profit. All reasonable goals, but can GM do them all?
YOUNG: We have to do it all. We do believe gasoline prices will increase in the future. We do believe consumers will demand more fuel-efficient vehicles and greener vehicles. From our perspective, we're going to make that commitment, make that investment in order to allow us to have these products in great quantities in the future.
INSKEEP: Couple of other questions, Ray Young of GM, top executive there: who do you report to? By which I mean not literally, Fritz Henderson, the current CEO, but in a larger sense, who do you think your boss is? Who's running this company?
YOUNG: Clearly, I report to Fritz, but now, you know, we all report to the board of directors of General Motors. We're accountable to shareholders of this company. And we have a board that's actually quite active. I mean, we get on the phone call at least two to three times a week in order to talk about the business. We feel very, very comfortable with that. We've got good oversight on the management team in terms of where we're going.
INSKEEP: Although aren't you going to understand that on some level, even though the government says they'll keep their hands out of the business, the government is the boss?
YOUNG: Well, we haven't seen that yet. We'll have to see what happens when we move forward. Clearly, you heard the words of President Obama, who indicated that the government has no interest in the day-to-day activities of General Motors.
INSKEEP: And the final thing: you said you want to start paying back the $50 billion that the U.S. government is putting into this company. Do you expect to pay it all back?
YOUNG: Our job is to make the shares of the new General Motors very, very profitable for the American investors. And we're off and running right now with a cumulative plan to help the American taxpayers accomplish that.
INSKEEP: Mr. Young, thanks for taking the time of what I am sure is a very busy time for you.
YOUNG: Thank you very much.
INSKEEP: Ray Young is chief financial officer of General Motors. And you heard him this morning right here on MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.
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