GM emerges from bankruptcy pledging 'new way of doing business'

GENERAL MOTORS, for many years the world’s biggest industrial company, announced its rebirth yesterday with revamped management, a healthier balance sheet and a vow to become a nimbler, global carmaker more in touch with its customers.

“From this point on, our efforts are dedicated to customers, cars, culture and repaying the taxpayer,” said GM chief executive Fritz Henderson.

Following the completion of its unexpectedly swift 40-day restructuring under bankruptcy protection, GM is now 61 per cent-owned by the US government, with smaller stakes held by Canada, a United Auto Workers union healthcare trust and former unsecured bondholders. The restructuring has cut debt from $54.4 billion (€39 billion) to $17.3 billion.

The US and Canada have provided about $60 billion in loans.

GM chief financial officer Ray Young said the company had “not used that much” of the $33 billion advanced by the governments to finance operations during the bankruptcy proceedings.

GM aims to repay the loans sooner than their 2015 maturity with the help of private-sector financing.

Mr Young said the carmaker might aim to launch an initial public offering next year – possibly as soon as the second quarter of 2010.

GM, which has long been criticised for arrogance and complacency, also promised “a new way of doing business”.

It is working with eBay on a venture in California that will allow buyers to bid for vehicles on the internet.

Mr Henderson also plans to launch a “tell Fritz” website allowing people to share their views with senior management.

“I will respond to input every day,” he said.

Regional operations will be streamlined to speed up decision-making.

Mr Henderson, who will take responsibility for the North American operations, disclosed that GM had sold more vehicles in China than in the US so far this year.

GM’s smooth journey through bankruptcy, on the heels of a similar process at Chrysler, marks a major achievement in the Obama administration’s drive to restructure the industry. – (Copyright The Financial Times Limited 2009)