The U.S. government should “sell every last share it owns” of General Motors Co. or else the company will be seen as a failure, former Chief Executive Officer Ed Whitacre said in a Wall Street Journal commentary article.
“The government has been an active participant in GM’s management for more than three years, and that’s long enough,” Whitacre wrote in the newspaper. “It’s time for the Treasury to step out of the way.”
Jim Cain, a GM spokesman, didn’t have an immediate comment.
Whitacre’s commentary doesn’t reference the U.S. presidential election. The auto industry bailout in 2009 and the U.S. government’s role in saving GM have been debated by the campaigns of President Barack Obama, a Democrat, and his Republican challenger, Mitt Romney.
Whitacre wrote the U.S. Treasury’s $50 billion rescue of GM has been a “resounding success,” saying millions of jobs were saved. If GM had failed, other automakers and suppliers “would likely have followed,” Whitacre wrote.
The former CEO said that while GM’s November 2010 initial public offering “was a roaring success,” the company will never shed its “Government Motors” image as long as money from the Troubled Asset Relief Program is involved with GM.
The U.S. Treasury holds 32 percent of GM and is the automaker’s largest shareholder. GM shares have declined about 25 percent since an initial public offering.
Whitacre, 70, was Detroit-based GM’s CEO from December 2009 to September 2010. He joined GM as the Obama auto task force’s pick for chairman as the automaker emerged from bankruptcy reorganization in 2009. Whitacre was chairman and CEO of AT&T Inc. and its predecessor, SBC Communications Inc., from 1990 until 2007. He led AT&T’s growth into becoming the largest U.S. phone company.
At GM, he pushed out then-CEO Fritz Henderson, who had guided the automaker through the bankruptcy. Henderson resigned after GM directors concluded he hadn’t done enough to fix GM’s finances and culture in a 100-day review following the July 10 bankruptcy exit, people familiar with the matter said at the time.
Whitacre then got rid of four executives, reassigned 20 more and brought in seven outsiders to fill jobs within three months. He supervised preparation of GM’s IPO before announcing in August 2010 that he would step down as CEO Sept. 1 and as chairman at the end of that year.
Dan Akerson, a company director, succeeded him and remains CEO.
GM’s IPO raised more than $20 billion selling common and preferred stock, and its owners, including the U.S. Treasury, sold at least $15.8 billion of common shares at $33 each. That made it the second-largest U.S. IPO on record after Visa Inc.’s $19.7 billion.
Christy Romero, special inspector general for the Troubled Asset Relief Program, told a U.S. House subcommittee in July in written testimony that the Treasury needs to sell GM shares at $52.39 or $53.98 per share to break even.
“Due to the enormity of Treasury’s stake, it could take a number of years for Treasury to sell at or above break-even,” Romero said in the statement.