GM’s Akerson talks bailouts, Europe, Chevy Volt problems by Adam Lashinsky @FortuneMagazine March 15, 2012, 2:10 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons FORTUNE — Daniel Akerson is every inch the businessman. In fact, he uses that word to describe himself, as if he needs to remind listeners that the man running a company so prominently saved by the U.S. taxpayers comes from the world of commerce. After a career in telecommunications and private equity, Akerson is an unlikely chief executive of General Motors. Famously at this point, he is not what Detroiters call a “car guy.” He’s also a Republican, thrust into the position of defending a Democratic president’s passions for an electric car and the salvation of the U.S. auto industry. (He claims to have spoken to the president twice since becoming GM’s CEO in September, 2010.) Akerson visited the West Coast recently and sat down for an on-camera chat with Fortune’s Adam Lashinsky on March 7 in San Francisco. He defends the “bailout” of the car companies as articulately, or more so, than any politician. He also acknowledges that GM needs to close factories in Europe, though he explains why it would be tough to kill the Opel brand in Germany, despite the successful if painful termination of historic U.S. brands, including Oldsmobile and Pontiac. Akerson seems downright befuddled—and clearly frustrated—by the politicization of the Chevy Volt, a project started at GM well before President Obama ran for office. He claims to have no idea when the United States will sell its sizeable stake in GM, and he thinks it makes all the sense in the world that the citizenry of the nation shouldn’t be represented on the GM board of directors despite owning more than a fourth of the company. These are just some of the topics covered in a wide-ranging conversation, an extremely lightly edited transcript of which appears below. ADAM LASHINSKY: So, I’d like to start if you could clear up something in my mind that I assume confuses a lot of people out there as well, which is this business of the U.S. government’s investment in General Motors. The government owns about 32% of General Motors. That’s common stock as I understand it, but that’s often characterized as a loan that needs to be repaid to the U.S. government. Can you explain the right lingo to me on that, please? DANIEL AKERSON: Well, I mean, you’re a pretty smart, financial savvy guy. There was debt, there was preferred, and there was common stock that the government owns. And we’ve paid back all of our debt, we’ve repaid all of our preferred, and we sold down from 60 plus, 62%, on a fully diluted basis they actually owned 27% of the company, and all of that was remitted to the government. That total is just around 23, $24 billion has been returned. So, do we owe them in the sense of debt? They’re a shareholder now. In fact, they’re our largest shareholder, and they have the ability, at their call not ours, to sell that stock at any one point in time. So, there’s nothing owed in the sense of there’s equity that they own, which is not debt. ADAM LASHINSKY: So, by your characterization it’s the government’s call more than it’s General Motors’ call when the government will end its ownership in General Motors. DANIEL AKERSON: Clearly. We have large shareholders. We have 200,000 plus. We have a marquis listing of first tier, bold bracket pension funds and whatnot and mutual funds. The government is a large shareholder. They’re not in the boardroom, they don’t have representation in the boardroom. ADAM LASHINSKY: Why not, by the way? Excuse me, wouldn’t it make sense for such a large shareholder, almost a third of the shares, to have representation? DANIEL AKERSON: Well, I think that’s a question better asked of the government, but I think what they wanted, I don’t know anything about politics or the management of a national economy, and I think they, in my opinion, wisely said, let’s get — they brought in a new board after the bankruptcy, reconstituted the board with old directors, if you will directors that were there prior to the bankruptcy. I came in with that new group, and they said, okay. I think they would have had trouble getting business executives to come in and say, is the government going to manage this business or are we going to have businesspeople manage the business. ADAM LASHINSKY: Can you explain to me what level of interaction there is? There’s no formal board representation. Is there a monthly interaction, is there someone minding the store from their perspective, in other words, formally? DANIEL AKERSON: No, no. Remember, I have a fiduciary responsibility, the board has fiduciary responsibility to all of our shareholders regardless if they own a thousand shares or a million shares. And once we took it public, we have certain restrictions, FTC restrictions; do we unfairly disclose information to one shareholder regardless if they have 27% of the company or 1%, and the answer is no. Prior to us going public, reentering the public market, yes, they got monthly reports and looked at our financials, and we had shareholder meetings before it went public, and they’d show up and they’d vote for or against various directors and various proposals that were before these shareholders, of which there were four at the time. The Canadian government also put money into the company at the time of the bankruptcy. ADAM LASHINSKY: So, two last things on this. One is, do you have a sense of what the government’s timeline is? DANIEL AKERSON: No. ADAM LASHINSKY: And how often do you communicate with the president? Because this is a very important investment for the U.S. government. DANIEL AKERSON: Well, I think I’ve spoken to the president twice. ADAM LASHINSKY: You mean since you became CEO? DANIEL AKERSON: Yes, yes. And he visited one of our Detroit area plants with the president of Korea when the free trade agreement was signed between the United States and South Korea. But I think the president is a supporter of the company, obviously, as was the Bush administration. But objectively, candidly, they don’t involve themselves in the day-to-day running of the business. ADAM LASHINSKY: And the very last thing on this subject, and I don’t ask this facetiously, but what do you say to people who say that the government bailout of General Motors was a perversion of capitalism and so on, that companies should have been allowed to go bankrupt the old fashioned way? DANIEL AKERSON: Well, I was in private equity. I had a front row seat on a global basis to the whole great recession and the collapse of many of our institutions. I think it’s a debating point is what I think. There was no risk capital available to the automotive sector, quite frankly to many of the financial institutions in this country, and we had to keep the liquidity flowing. It’s like the lifeblood of a body. The industry was in bad shape, and had they not come, the government had saved it, President Bush himself several weeks ago said he would have made the same decision again. It meant a million jobs — a million jobs — and $150 billion — his number — in terms of tax revenues on an annual basis they would have foregone because of the collateral damage to shoulder industries from the local barber shop or grocery store or dealership. So, rather than try to kind of angle and maneuver for political advantage, if there was risk capital, and I don’t think there was available – ADAM LASHINSKY: It wasn’t for lack of trying, by the way, right? When you say – DANIEL AKERSON: No, believe me, I was in private equity. All the private equity, all the banks, all the big mutual funds, the Warren Buffetts of the world, the investors were not giving money in that crisis, and I think that’s important to remember. That being said, I have to approach it from purely a businessman’s point of view, a pragmatic, practical point of view, and I would say no matter how, you know, (managed ?) bankruptcy, what does that mean? Where we are today, is this company now, after a two year hiatus, is the single largest automotive manufacturer in the world. It’s growing. We went from 135 billion to 150 billion from ’10 to ’11. ADAM LASHINSKY: I’m sorry, 150 billion? DANIEL AKERSON: We did 135 billion in ’10, 2010 – ADAM LASHINSKY: Oh, revenue, uh-huh. DANIEL AKERSON: Revenue. We produced more profits in ’11 than in any other year in the 103 year history of General Motors. And that goes back to when it had 50% market share in the ’60s. ADAM LASHINSKY: Now, obviously not needing to service debt has something to do with being profitable, right? DANIEL AKERSON: It also has something to do with gaining $15 billion in sales in one year. Yeah, all of that, but now we are a company that’s viable. We’ve invested over 9 billion, almost 10 billion in basic manufacturing infrastructure in this country since the bankruptcy, and we’ve hired almost 17,000 employees. So, I would say the economic devastation that would have occurred — and it’s not like we’re an airline that you declare bankruptcy one day and the plane flies tomorrow. Dealers would have been in question. People, would they buy your cars? Where do I get it serviced, where’s the warranty? It was a consumable product, a consumer consumable, and we had to get in and out in a relatively short period of time. So, I think — I know and I don’t want to get into the political arena, but I know business, I’ve been in business since I got out of the service. Many of these people haven’t been in the business arena, they’re in the political arena, and the rules are a little bit different. ADAM LASHINSKY: By people you mean the critics of the investment? DANIEL AKERSON: I think — and you know what, it’s fair to criticize it. There are different points of view. ADAM LASHINSKY: The American way. DANIEL AKERSON: We’re entitled to our point of view and our opinion, we’re not entitled to our facts. (Laughter.) It worked. And as Americans, regardless of political affiliation, we ought to take pride in that it did work. ADAM LASHINSKY: So, let’s move on to a different set of facts, which is you’ve got a lot going right, right now, and you’ve got some challenges still at General Motors. DANIEL AKERSON: Yes, we do. ADAM LASHINSKY: Brag for a moment, if you would, about what’s going on in the United States. It’s still a shaky economic time here, and yet General Motors is doing relatively well in North America. DANIEL AKERSON: Well, I mean, you know, it’s hard sometimes to see a turn and to realize when things have gotten better, but industrial activity in this country, not in the automotive sector, in this country, has picked up now for 31 months in a row. Unemployment is at 8.3%; that’s too high. But the good news is from our perspective, from our industry perspective is there’s pent-up demand because in these difficult economic times there has been the postponement of capital purchases, expensive things: houses, cars, et cetera. And so the car part, if you will, the average age of the cars that are in this country is now at an all-time high, it’s about 10.8 years. ADAM LASHINSKY: Ten point eight years, wow. DANIEL AKERSON: And so when you saw the annual rate of sales increase in February to a number of 14-plus million, (what does that ?), consumer confidence is coming back into the market. When it hit the low it was back in the summer months when there was a real political brouhaha, are we going to increase the debt level and is the United States going to go bankrupt and we got downgraded. That affects people and their perspective. So, this country has so much to be proud of, and this company does. Don’t forget — someone said to me, why is manufacturing important anymore? Understand we’re still the largest manufacturing country in the world, and we’re 40% bigger than the next guy, and that would be China. So, when everybody talks about China, the United States still is almost twice the manufacturer as they are. We’re still the largest manufacturer or builder, producer of agriculture, and we’re the largest agricultural manufacturer in the world. This country is blessed with so many good things. It has budget issues that need to be resolved, and I don’t want to wade into that, but when you look at what’s going on in this company and how we’ve been able to leverage our position, this is a huge company on a global basis, $150 billion in revenue. Just to give it some size, it’s larger than 100 countries — 100 countries’ gross national product. So, to have let it go down because of a political perspective that really is kind of post the fact, the event, and say, well, it should have been done a different way, there was no capital to make it happen. So, two administrations, across two administrations of reasonably politically divergent points of view, the people in the arena at the time saw the need and they moved, and I think it behooves the American public. So, rather than try to parse this thing, let’s celebrate the success. So, things are going well in China, things are going well in the Middle East, they’re going well. We’ve had a blip, we’re addressing it in South America. Europe is a challenge not just for General Motors, Ford, all the European manufacturers, and in some respects it’s very analogous to what was going on in the United States in manufacturing specific to automotive in 2008: overcapacity, underutilization, people pricing down such that there’s no product to hold market share, and therefore no cash flow, no productivity, and so you have to resize just like we did. We went through it, it was very painful. ADAM LASHINSKY: In the United States you mean? DANIEL AKERSON: Yeah. ADAM LASHINSKY: So, you’ve taken a step in Europe with this agreement with Peugeot. Explain what it is and what you hope to get out of it. DANIEL AKERSON: It’s an alliance. We’re not merging, we’re not trying — we each have our unique set of problems in terms of our capacity and our competitive positions in Europe. That’s on our back, that’s on our watch; we’re going to fix ours, they’ve got to fix theirs. But where we see is they have — we have complementary needs that we have needs where they have abilities and we have abilities where they have needs. So, we will hopefully as this alliance evolves be stronger by using scale. We spend roughly 90 to $95 billion a year on equipment, steel, aluminum, glass, rubber, parts; they spend about 30, 25 to $30 billion. We pool that, we can get volume discounts. We look at sharing common platforms. We’re better in certain segments than they are. They want to move into those segments. They’re better in smaller cars and maybe diesels than we are. We may be able to take advantage. We want that to be a balanced relationship. It doesn’t really start to pay dividends out for two years, so it doesn’t resolve our issues in Europe, but it’s a first and preliminary step. ADAM LASHINSKY: In the U.S. GM was able through an extraordinary set of circumstances to take some drastic action. You closed whole factories, you closed whole historic products, brands in the United States. Can you take and will you take drastic action like that in Europe? DANIEL AKERSON: Well, just so you understand, prior to their kind of crisis of confidence, if you will, Europeans must — we in America hear about it every day, they must hear about it every morning and every evening of every day, is Greece going to go under, is Italy going to go under, what’s going to happen to the Euro, the banks are on stilts. It has echoes of what was going on here in 2008 and 2009. Coming out of bankruptcy we did close a plant. There were only two plants closed in Europe. Fiat closed one and we closed one in Antwerp, Belgium, and we laid off about 4,000 people. And we were profitable for the first half of ’11 in Europe. And then you could see it with the debt crisis that we argue about the debt limits here. Well, at the same time, concurrent with that last summer and the fall, there were discussions of is the Euro zone going to break up. Well, they lost their spring in their step, they lost consumer confidence, and we saw it happen in the third and fourth quarter. We called it early. Now we, Ford, Fiat, Peugeot, Renault, they’ve all come out and said, yeah, real profitability problems in Europe. You’re right, we had to close 14 plants in the United States when we had our crisis. We think we’re going to have to adjust our production levels in Europe over the next couple of years in order to get our house in order in Europe. ADAM LASHINSKY: Adjust production levels is often a euphemism for closing plants. DANIEL AKERSON: Yes, it commonly is. ADAM LASHINSKY: And what’s the timeframe for making those decisions? DANIEL AKERSON: We are in discussions with our stakeholders, our employees, our unions. ADAM LASHINSKY: And I know it’s very difficult to close facilities in Europe compared with the United States. DANIEL AKERSON: That is true, and we’re going to bide by our contracts, but we have to at least start to get them in place. So, we hope within the next two to three months that we’ll be able to publicly articulate a plan that will get us back or with a shot at profitability. ADAM LASHINSKY: And is eliminating a whole brand in Europe such as Opel, is it an option the way you did in the United States? DANIEL AKERSON: I don’t think so. But you see, you think about the United States we had eight brands. And if you call the middle market we had Pontiac, Saturn, Buick, Oldsmobile, the swim lane was too crowded. So, the fastest growing brand in America today is Buick. And people say, well, Buick? Well, okay, we’ve taken some of the sportier kind of Pontiac segment of the market and we address it with the Verano, which has gotten rave reviews from every car magazine and enthusiast, because it is really a great small car. Well, then we’re in — and by the way, Buick outsold Lexus or essentially matched Lexus in total sales in the United States. This is a brand that — well, it’s more than Buick now, it’s really an amalgamation of several different entrants into that segment of the market. Operational excellence is different. It’s a midrange brand that we have, largely in Western Europe. We have introduced the Chevy brand into Eastern Europe, and it is actually a pretty good brand there. But it is Opel, and Opel is a company with a 100-year history, and we’re going to do our hardest, our best to make it profitable. ADAM LASHINSKY: Had Chevy been in Eastern Europe before? DANIEL AKERSON: Not until the last couple of years. ADAM LASHINSKY: So, I wonder if Nissan’s move to put the Datsun into developing countries is following General Motors’ strategy with Chevy in Eastern Europe. DANIEL AKERSON: Well, you’d have to ask Carlos Ghosn about that, but clearly what we’re trying to do is have a dual brand, a global dual brand strategy, a youth oriented, value-oriented brand such as Chevy, which covers everything from Volt to Traverse and one end of the spectrum to another, and then have Cadillac be our premium brand, flanked by regional brands that are unique. Buick is only going to be sold here in North America and China. Holden is sold — it’s really Chevy but it’s a national brand, it’s a national champion, if you will, in Australia, Opel for Western Europe, and we will export out of Europe Opel to select countries where it makes sense. But largely if you look at it from afar, you’d say this is a dual brand global strategy, which is similar to what we see out of VW, which we see out of Toyota and others. ADAM LASHINSKY: Now, you mentioned the Volt. You’ve got a black eye with the Volt. Does the black eye hurt? Where does the Volt stand? DANIEL AKERSON: I don’t have a black eye with the Volt. It’s a great car. It’s a car we’re very proud of. It’s an innovation, what’s called a moonshot. I mean, this is to me reminiscent of what American ingenuity and manufacturing used to manifest itself in the space program. We took a huge step forward. There were some issues I think, quite candidly, somewhat politically driven about the Volt. We set a target out this year, and I said, once we went through a bump in the road, if you will, we saw our sales drop in January when we were in the midst of a safety investigation, which I might add we never lost our five star rating, and now that NHTSA has come out and says all things are clear, this is one of the safest cars on the road, our sales jumped by double in February versus January. They outsold the Nissan Leaf by two to one, they outsold the Mitsubishi iCar, another battery generated car, by 40 to one. So, we are not giving up on the Volt. It is a viable car, it’s a great car. Let me give you an example. To have a consumer product, a durable consumer product, 93 % of our customers that have bought Volts today rated it at the very high end. That’s unheard of. So, the car, we’re going to relaunch it, and – ADAM LASHINSKY: When? DANIEL AKERSON: Starting this month. ADAM LASHINSKY: This is March. So, you’d hoped to do 60,000 units this year. You’re not going to, I assume. DANIEL AKERSON: We said then when we went through this investigation and whatnot, which again was cleared, that we were going to match production with demand, which is rather than try to defy the laws of economic gravity and try to bend supply and demand curves, gee whiz, we’re starting to use kind of business sense 101, and that’s what we’re doing. ADAM LASHINSKY: So, forgive me, what is the goal for this year for the Volt? DANIEL AKERSON: We don’t know yet. We’re going to play it by ear. Remember, if we sold 45,000 this year, our goal is to sell 9 million globally vehicles, that’s less than one half of 1%. The best-selling compact car in America last year was the Chevy Cruze. It went from zero, we launched in November of ’10, and through ’11 it outsold all of them. It was better than Toyota, Honda, all of them. ADAM LASHINSKY: And that’s about how many – DANIEL AKERSON: And guess what, our inventory got a little ahead of us last November, we shut it down for two weeks. The Volt has an aura about it, because it is unique, because it says so much about innovation and alternative fuels. Okay, it gets a lot of press, good and bad, but, in fact, we sold more Volts in the first year than Toyota sold Priuses in its first year. So, does everything go swimmingly well in life? Not in my life. Life has challenges, and we’ll overcome this challenge, too. ADAM LASHINSKY: During your tenure at GM you’ve been wearing on your sleeve I think the fact that you are not what people in Detroit call a car guy. Are you still good with that description, is that still something that you feel is a strength as chief executive? DANIEL AKERSON: Well, the first fact, when I showed up before the press, someone said, “Are you a car guy?” I think it would have been a little arrogant and presumptuous for me to say I’m a car guy. I mean, this is the first time I’ve worked in an automotive company. So, I think I would have got more criticism to say I’m a car guy. I don’t know it all. Second fact, you now have three non-car guys, if that’s the right term, didn’t grow up in the industry, and this is the first time in 20-some years that all three of the automotive manufacturers are profitable. Now, a lot of that is because two of us went through bankruptcy and we cleaned up the balance sheet, but I do think General Motors, great company. We’ve got to make it better, and that’s going to require a lot of different experiences, insights, perspectives that maybe weren’t born out of an auto background, a consumer focus, a marketing focus. We are and in large measure will be for a long time an engineering company at the core, manufacturing stepping out. And people say to me, what’s the biggest difference, I say, we don’t measure ourselves by internal metrics anymore, we benchmark everything externally. We want to know what our competition is doing. We don’t make cars that we want to make a generic high-end Cadillac. Now, we’re looking at that BMW, that Mercedes, and that model; that’s what we’re going after. ADAM LASHINSKY: And are you saying that in previous years Cadillac would not have been benchmarked against a BMW, for example? DANIEL AKERSON: I don’t think so. ADAM LASHINSKY: Can you give me an interesting benchmark that comes to mind that — I don’t know, that you’re either proud of or frustrated by right now? DANIEL AKERSON: Well, you look at the new Cadillac ATF, okay, almost every dimension of it looks like a BMW but it’s uniquely American. And so we had to de-mast this car. So, we’re using carbon fiber technology – ADAM LASHINSKY: De-mast it means make it lighter? DANIEL AKERSON: Make it lighter. We put in an extraordinarily innovative and new stability track system, an engine that’s designed to go up against the BMW M3. That is a car that’s designed to go after the BMW 3, which is a great car. It’s something that we aspire to. But just to say, you know, I remember before I joined GM, Cadillac had I think it was called an XLR. It looked like a kind of zipped up Pontiac. Well, you know, I don’t think we should be on the same platform in a premium brand like Cadillac with a youth oriented, value oriented brand like Chevrolet. It’s a different time and different place in your life, different demographic, different segment of the market you’re going to after. So, you’re going after people who have more disposable income, that are looking for performance, higher performance in a car. So, you can’t kind of mix those two, it has to be pretty clearly delineated. So, I do think that the company — and this precedes me, and what we have to do is just make it more of an ethos of how we approach the market, and I think we’ll be much more successful with targeted marketing than we have been kind of like, well, we want to produce a really good car in the premium market segment. No, we want to produce a great car and we looked at the standard and that’s what we’re going to look to to not meet but to beat. So, that’s external benchmarking, that competitive perspective that we want to bring to the marketplace. ADAM LASHINSKY: I could see being a person at GM who has not previously benchmarked against BMW or Mercedes, hearing this and being, I don’t know, annoyed or aggravated by this request. DANIEL AKERSON: Why? ADAM LASHINSKY: Because I haven’t been asked to do it before, I’ve spent my career saying I just need to make a good car, not be compared to BMW. DANIEL AKERSON: Well, I think this is today’s GM, this isn’t yesterday’s GM, and I think it’s invigorating and reaffirming to many of our employees. We have great employees that want to win. I think — I won’t speak for every employee, but I think the company was embarrassed by its bankruptcy, the fact that we needed help. We’re very appreciative of the American public, the Canadian public that was there in our darkest hour. Now we have something to prove, and I think there’s a shared vision that, yes, change is required, change is good, and we’re not going to be, as I say, the Pillsbury Dough Boy and get punched all the time and take it. We’re going to fight back and our desire is to succeed. ADAM LASHINSKY: Do I have time for one more on the subject of fighting? So, you’ve frequently been quoted using a war metaphor that we are at war. What war are you talking about? DANIEL AKERSON: Look, you know, I gave a speech at a business school many years ago, and I said, understand, you know, this isn’t just put a tie on and you come to work, it’s Darwinian by nature. Every time you — and I think you’ve got to look at it that way. ADAM LASHINSKY: Businesses you’re saying? DANIEL AKERSON: Yeah, it is, you succeed or fail, and if you continue to fail and it becomes routine and accepted, you’re eventually eliminated. Yeah, it isn’t war in terms of you want to kill somebody, I don’t mean it that way, it’s competitive and the results are very unpleasant, unattractive, and disruptive to an individual, to a family, to a community, and ultimately to a country if you don’t set out to say I’m going to succeed. And so it’s locker room talk, sometimes you’ve got to give people the right sense that this isn’t t-ball for your kids where you want to teach them fundamentals of the game and good sportsmanship. We’re professionals, we’re paid to succeed, not to get by, not to be average, but to excel in what we do. ADAM LASHINSKY: It’s interesting, one of General Motors’ biggest opportunities right now is China. And China is also where the United States has the most political tension from a geopolitical perspective right now. DANIEL AKERSON: I would have thought it was in the Middle East. ADAM LASHINSKY: Well, maybe I should have said among people we’re friendly with we have the most tension with China. Talk a little bit about GM’s future in China and how you manage that tension between the United States and China. DANIEL AKERSON: Well, I’m not managing any tension. I’m more on the receiving end. I think, you know, China is the fastest growing economy in the world today, reasonably developed economy. To pass that by where we are the largest shareholder, with our partner, Shanghai Auto, and just to cede it to — because someone will fill that void, whether it be an American competitor or a European competitor or a Japanese competitor. So, we’re there. We’ve been there for 15 years. We have a very strong and vital and robust partnership, and we are growing, and we intend to grow more. Obviously, there are overarching issues that preclude some ordinary businessman like myself that have national or international implications. We watch that carefully. But at the same time, we have a business to run. And so I don’t know if I manage beyond what I can from a General Motors perspective, but I would say that it’s a good and strong business and one we hope to continue to grow. ADAM LASHINSKY: And can you speak generally to where the Japanese stand? I mean, we’ve had a tough few years in the United States, they’ve had a really tough few years in Japan. And I could look at this two ways. One, that means that they have the opportunity for a comeback that will be humbling for their competitors, or I don’t know, maybe their confidence has been dealt such a blow that we can worry less about them going forward. DANIEL AKERSON: I don’t worry less about the Japanese. It was tragic the earthquake and subsequent tsunami and subsequent nuclear disaster that occurred. I was on a board in Japan. I visit there frequently for several years, and they’re wonderful people. It’s a great nation. Toyota is a competitor, Honda is a competitor, and we’re going to meet them in the field of friendly engagement, maybe sometimes not so friendly. I think some of the worst — and perversely the Yen rallied with such a really natural disaster. That probably hurt their trade position and their competitive position more than anything that happened physically to the country. And quite frankly to me it didn’t make sense to me that their currency would rally as it did. That being said, if General Motors can have the resurrection, the turnaround that we’ve had, I would never count out anyone, much less at Toyota or Honda, of that nature. So, we watch them carefully and we try to assess our competitive position vis-à-vis their specific products. (Break for direction.) ADAM LASHINSKY: I can frame it for you, which is what’s so interesting about the Volt, and you’ve characterized it his way already, on the one hand, it’s not a very big car from GM’s perspective in terms of units. In your wildest ambitions it’s not a big car. On the other hand, it’s a metaphor for the future, innovation, it’s got exciting technology and whatnot. So, I guess my question is, why do we spend so much time talking about the Volt? What were its hiccoughs, where can it go? DANIEL AKERSON: Well, I think it does have — I guess the political backdrop of an administration is viewed as very concerned about the environment and green technology. There’s disagreements on global warming; okay, fine, fair enough. But at the same time, this is called the president’s car, President Obama’s car. Well, I can tell you that the car was designed probably when he was in the Illinois State senate before he came a United States senator. Because it is a political year, it is an election year, the other day the president came out and said, you know, when he’s out of the White House he might buy a Volt. So, he’s associated with the Volt, and let’s face it, there’s a political discourse ongoing in this country for this year in particular, and so it draws more attention than I think is necessary. And I think even the investigation was framed by the politics of it all. ADAM LASHINSKY: In that it was what, a routine safety investigation that happens all the time, is that your point? DANIEL AKERSON: Yeah, yeah. ADAM LASHINSKY: And this one got headlines. DANIEL AKERSON: Let me give you an idea. There are 150,000 car fires a year in this country. When we had our test, and the car burned, the first thing first responders do when they come to extricate the passengers, disconnect the 12 volt battery, drain the gas tank. In a test we had a hit to roll it, purposely, just to test it. And three weeks — not three minutes, not three hours, not three days — three weeks later, you had a smoldering fire, and that prompted an investigation. Okay, we buttressed around the battery compartment. In engineering terms we shed the load around it and then we felt, okay, all clear, everything is fine. Well, there were investigations with NHTSA, the National Highway Safety Transportation Administration, what did they know and when? So, you have to — unfortunately the Volt has to be considered against the backdrop of a lot of politics when, in fact, it’s a great car. We’re exporting the car. I think it is the first chapter of a multi-chapter book on the evolution away from an oil-based transportation system to alternative fuels that have the early days of the electric car, which you’re seeing today, battery technology will ultimately evolve and become improved and better, and I think in some period of time in the next five, 10, 15 years you’ll see hydrogen fuel cell cars. We have them, they’re running, they’re safe. We’ve put 3 million miles — 3 million miles on hydrogen fuel cell cars, but the facts are with precious metals and whatnot the chemistry is very complicated, they cost about $350,000-plus. Well, we’re not taking that to the market. So, we have to get the cost down, like we did the Volt. So, this is going to play out. This is not an election year issue. That will fade to black over time, in my opinion. The car will persist. The technology and the evolution of technology and alternative fuels will continue on in us. I think in my lifetime even, and certainly in yours and our children’s lifetime you will see a slow evolution or a moderate evolution, I don’t know how you want to put it in terms of time, where you’ll see that change. ADAM LASHINSKY: As a businessman is it frustrating to be pulled into this political discussion? DANIEL AKERSON: Well, candidly yes, but at the flip side, you know, I don’t let it bother me, because I have a job to do. This has been our political system for 230-odd years. So, I deal with it as kind of you deal — it’s a multivariable equation. It’s one of them. At the end of the day, as I said, it’s pretty hard to refute that this wasn’t a success. Everybody should take pride in that, America should take pride in that. ADAM LASHINSKY: You’re talking about the bailout now? DANIEL AKERSON: In terms of where we are, instead of trying to argue, because the Volt is caught up in that whole dialogue. It’s too important to America to kind of turn away from a great new innovation for reasons that are not germane to the long term viability of the product. ADAM LASHINSKY: It occurs to me that even before all of this – (Break for direction.) DANIEL AKERSON: It’s like Newt Gingrich said the other day, well, sales went up in smoke just like 8,000 batteries. Well, let’s start talking facts. I mean, really? Believe me, I am the most pragmatic guy you’ll meet. Moynihan is right, you’re entitled to your opinion, you’re entitled to your perspectives, you’re not entitled to your facts. ADAM LASHINSKY: It occurs to me even before all of this, GM is so iconic that you can’t — GM gets referenced constantly. And even something you’d think that would have been positive, you’ve got the major candidates saying my wife drives a couple of Cadillacs. I’m sure at some level General Motors had to be delighted by that statement, and yet it gets used as an example of his elitism and not understanding the common people. DANIEL AKERSON: You know who’s the two biggest voting blocks in terms of percentage turnout? Veterans and the people over 65. So, I’m almost 65 in a couple years, but I’m certainly a veteran, and I don’t want to get into the political arena on this. But I know a little bit about the automotive industry now, and I’ll tell you we are doing the right things for this company, and the right thing I think coincides with what’s right for the United States, too. We want to be a contributing member of society. We’ve done wonderful things. We were just named — the EPA just named us the 2012 star energy company. We’ve reduced emissions in our plant by 60% in the last couple of years. There are plants that are run off of landfill. That’s 100%, we have zero landfill, we don’t produce anything coming out of the plant that goes in a landfill. We’re I think a responsible member of the business community, of our local communities, and we’re adding jobs, we’re investing in infrastructure. We’re an exporter. We bring money from China back to this country. I mean, I’ve heard other CEOs talk about it. We repatriated about a billion and a half last year from China alone. So, you know, we’ll just go about our business, and recognize as citizens that there’s a dialogue, there’s a debate going on, and I listen to it because I’m going to vote. My vote won’t change the election, but I’m concerned about the future of this country. I think GM is part of the future of this country, and I think it was — not to argue an old point, but I think it was the right thing to do, and I’m a Republican. And I see what other countries do for their big manufacturing companies that provide jobs and employment and prosperity, and let me tell you, there’s a sharp — here’s — it’s not meant as — people that don’t think that jobs are important, come to Detroit, because all of a sudden the corner grocery store stops, the school isn’t there, the neighborhood, the local neighborhood starts to deteriorate, first one house is abandoned and then what happens to it? You have to have jobs to have prosperity and for people to send their kids to college, to have vacation, to buy a car every three or four or five years. It’s a very virtuous circle of interconnectivity, and I’m proud to play a role in a company that’s a building block to a better economy. ADAM LASHINSKY: Thanks for being here, appreciate it. DANIEL AKERSON: Thanks.