DETROIT: General Motors CEO Dan Akerson says the company's finances are sound enough to consider paying a dividend or even buying more stock from the US government.
The CEO, in comments after GM's annual meeting Thursday, also said the company first has to keep investing in new vehicles and equipment. GM cut its dividend in July of 2008, amid financial troubles that eventually landed it in bankruptcy protection.
GM needed a $49.5 billion government bailout in 2008 and 2009 to survive the financial crisis and the Great Recession.
In exchange for the bailout, the government got 60.8 percent of GM's stock. The government has been shrinking its stake, and will reduce its holdings in GM to under 14 percent when it sells 30 million shares after the market closes Thursday.
After the sale, the Treasury Department will own 189.2 million shares, GM said in a regulatory filing Thursday.
Akerson said that once the government's stake drops below 10 percent, restrictions on the number of shares it can sell each quarter are lifted. That, he said, may open the door for GM to buy more shares and potentially get out from under government ownership.
The government has said it intends to sell its entire stake in GM by April of 2014. As of May 10, the government had recouped about $30.7 billion of the bailout money, leaving taxpayers were about $18.8 billion in the hole.
Pricing for Thursday's sale will be announced after the markets close. A United Auto Workers retiree health care trust fund also will sell 20 million shares on Thursday.
GM's shares sold for $33 when they began publicly trading again in November 2010. They were down a penny at $34.01 at midday Thursday. The shares have risen about 19 percent so far this year.
Akerson said the company will consider restoring the dividend as another way of returning capital to shareholders, but he provided no time frame. ``I think first and foremost, we must continue to invest in this company so we don't lose the competitive edge,'' he said.
GM also announced that it would offer free oil changes, tire rotations and inspections for two years on most of its 2014 models in an effort to boost customer loyalty. The offer is good for two years or 24,000 miles, whichever comes first. Oil changes will be done when the vehicle's oil monitoring system says they are needed.
Previously, oil changes were only covered for Cadillacs sold since the 2011 model year. ``We know that our customers who service their vehicles at our dealerships are much more likely to purchase another GM product down the road,'' Akerson said.
indiatimes.com
The CEO, in comments after GM's annual meeting Thursday, also said the company first has to keep investing in new vehicles and equipment. GM cut its dividend in July of 2008, amid financial troubles that eventually landed it in bankruptcy protection.
GM needed a $49.5 billion government bailout in 2008 and 2009 to survive the financial crisis and the Great Recession.
In exchange for the bailout, the government got 60.8 percent of GM's stock. The government has been shrinking its stake, and will reduce its holdings in GM to under 14 percent when it sells 30 million shares after the market closes Thursday.
After the sale, the Treasury Department will own 189.2 million shares, GM said in a regulatory filing Thursday.
Akerson said that once the government's stake drops below 10 percent, restrictions on the number of shares it can sell each quarter are lifted. That, he said, may open the door for GM to buy more shares and potentially get out from under government ownership.
The government has said it intends to sell its entire stake in GM by April of 2014. As of May 10, the government had recouped about $30.7 billion of the bailout money, leaving taxpayers were about $18.8 billion in the hole.
Pricing for Thursday's sale will be announced after the markets close. A United Auto Workers retiree health care trust fund also will sell 20 million shares on Thursday.
GM's shares sold for $33 when they began publicly trading again in November 2010. They were down a penny at $34.01 at midday Thursday. The shares have risen about 19 percent so far this year.
Akerson said the company will consider restoring the dividend as another way of returning capital to shareholders, but he provided no time frame. ``I think first and foremost, we must continue to invest in this company so we don't lose the competitive edge,'' he said.
GM also announced that it would offer free oil changes, tire rotations and inspections for two years on most of its 2014 models in an effort to boost customer loyalty. The offer is good for two years or 24,000 miles, whichever comes first. Oil changes will be done when the vehicle's oil monitoring system says they are needed.
Previously, oil changes were only covered for Cadillacs sold since the 2011 model year. ``We know that our customers who service their vehicles at our dealerships are much more likely to purchase another GM product down the road,'' Akerson said.
indiatimes.com
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