Whitacre On Keeping Opel, GM IPO and Repaying Bailout

General Motors Chairman Ed Whitacre put in a solid public performance in a friendly venue this week, in a speech and a question-and-answer session at Texas Lutheran University in Seguin, Texas.

Notably, Whitacre said GM changed its mind about selling control of its Opel subsidiary in Europe, simply because the European market was somewhat improved, because Opel has new products coming that are expected to do well, and because GM has to be a global player and that includes Europe.

Whitacre was an executive professor of business at the school following his retirement as chairman and CEO of AT&T (T) in 2007. He was named to his GM post in June 2009, effective when GM emerged from bankruptcy in July.

Whitacre increasingly is the public face of GM, having appeared in commercials for GM’s money-back guarantee. Based on a recorded, online replay, his delivery at Texas Lutheran on Nov. 10 was matter-of-fact, and at times folksy and self-effacing, without being too patronizing. He kidded with the audience of students and residents that “anything can happen,” if an “unemployed business professor” like himself can become chairman of GM.

The venue was friendly, but some of the questions were tough. Whitacre responded to one pointed question by saying half-jokingly, “Who prepped you on that question? Which reporter have you been talking to?” He went on to reassure the questioner that the question was a fair one.

The following are edited excerpts from the question-and-answer session.

Question: When can we expect GM to become publicly traded again? When will GM repay its government loans? And how can you ensure long-lasting change when the board has changed, but management hasn’t?

Whitacre: You and I (taxpayers) loaned GM about $10 billion, and we can pay that back. I can’t tell you when, but it won’t be very long, and it’s sooner than you think.

(A public offering) Depends how quickly we become profitable. I think I can see that on the horizon but I can’t see a specific date. I see that on the horizon, and I think the people at GM see that on the horizon

… People may say it hasn’t changed, but almost half of the top management people have changed … There’s been a huge amount of change … It is a different management team with a different objective.

Q: To what extent is the U.S. government involved in running GM?

Whitacre: One of the conditions of me going on this job, and for a lot of other people to be interested in this was, “Mr. Government - or Ms. Government - you’ve got to keep your hands out of this, you’ve got to let us run this business like a business.” … I have to say so far they have been true to their word, there has been no interference.

Q: Can you tell us more about the decision to retain Opel, and the importance to the firm overall of having an international presence?

Whitacre: There is no isolationism … there is just worldwide trade, and as a big company you have to participate in that …

You have to seek markets, new sources of revenues. You have to have more revenues than you have expenses, or you go broke. It’s just about as simple as that … That’s what happened to GM and that’s what’s happened to a lot of companies.

To find markets where you can grow your product and sell it you certainly have to be worldwide …

(Regarding Opel) We asked ourselves has the economy got a little bit better? And it did. And our profit, or our cash got a little better in Europe and we had some new product introductions that were going to be very popular. We had to turn around and re-ask ourselves because the deal hadn’t closed yet. How can you be a global player and not play all over the globe? And so our financial fortunes had improved enough that we reexamined that and decided we’d be better off keeping Opel than we would selling it, and that’s what we did.