New GM will make money, repay loans, CEO says

DETROIT -- General Motors exited bankruptcy Friday, with new owners and a new commitment towards improving its communications with customers.

GM CEO Fritz Henderson said the automaker will pay back its loans from the U.S. government as quickly as possible.

"We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," Henderson said.

Most of GM's assets were transferred to a company controlled by the U.S. government. In bankruptcy, GM was able to dispose of billions in debt. Much of the work was done before the automaker entered bankruptcy court protection.

Henderson vowed to make more regular visits to customers, dealers, suppliers and employees in the U.S. and abroad. The company is launching a site in August called "Tell Fritz," where customers can send ideas and concerns to the CEO. Now free of its crushing debt load and uncompetitive labor contracts, Henderson says executives will again have time to learn from customers again.

"You can always learn," he said. "If you don't learn, you're arrogant."

GM had a reputation for being arrogant. The automaker for decades was the largest automaker in the world, losing that title last year to Toyota. Sometimes, Henderson said, its size meant the automaker couldn't move fast enough and make decisions quickly enough.

Now, with just four brands to sell and no more major structural issues to address, the automaker is poised to start moving faster.

"Bigness itself is not a weapon. Unless you harness it, it just means you're big," says Henderson.

The automaker now has a daunting task: Reinventing itself from the inside out to first behave like a smaller company, and secondly have consumers believe the automaker has changed.

GM is moving long-time auto industry veteran Bob Lutz to a new global communications role, where he will work on changing the company's image, internally and externally. Lutz was responsible for overhauling GM's product development process, improving interior quality and exterior styling.

And he's know for cutting through corporate feel-good messaging and telling it like it is. In GM's headquarters, there is a wall of executive and employee photos, with quotes about business philosophies or how much each person admires GM.

Lutz's quote says: "We can all love one another, but what good is that if the amorous lemmings are all running off the same cliff together?"

In addition to talking more directly to consumers — Henderson says he'll participate in online chats and Twitter conversations more regularly — GM will allow some consumers in California to buy cars directly from eBay. Customers will be able to bid on cars, or use the "Buy It Now" option.

"In all cases, our goal is to make the shopping and buying process as easy as possible for GM customers — on their time and their terms," Henderson says.

Henderson told a news conference that GM completed its 40-day stay under court supervision far faster than anyone thought it could. He said it would repay about $50 billion in government loans ahead of a 2015 deadline.

But the company emerges amid the worst sales slump in a quarter-century.

Henderson also said the company would reduce its overall U.S. salaried employment by 20% by the end of 2009. He said management ranks will be cut 35%, or 450 executives, including the elimination of its North American president position. Henderson said he will take responsibility for North American operations.

The new company will focus on three top priorities, customers, cars and culture, Henderson said.

"If we don't get this right, nothing else is going to work," he said during a morning news conference at GM's Downtown Detroit headquarters. "Business as usual is over at General Motors."

New Chairman Edward Whitacre Jr. said the 40-day period had been extremely challenging. "There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs," he said. Whitacre cited the "strong leadership" of Henderson and the management team, giving the CEO who replaced Rick Wagoner a vote of confidence.

"We all want to win and we are going to win," Whitacre said.

The company's logo will remain blue with white underlined GM letters. Henderson said GM has no plans to change the background color to green. "It's not in my plans actually," he said.

GM has considered the change to represent its new environmental focus.

Concessions made by the United Auto Workers union just before the company entered bankruptcy protection have brought GM's labor costs down to where they are fully competitive with Toyota Motor, Henderson said.

Henderson also said the U.S. government has urged them to form a "world-class board" and has vowed that it would not get involved in day-to-day decisions. Steve Rattner, the head of the Obama administration's auto task force, "wants the company to perform," Henderson said.

In addition to the U.S. government's controlling interest, the United Auto Workers union gets a 17.5% stake of the company through its retiree health care trust, and the Canadian government will control 11.7%. The remaining shares went to bondholders of the old company.

The parts of GM not moving to the new company will become part of "old GM," a collection of assets and liabilities that will be sold to pay creditors.