Acknowledging the inherently politicized nature of his position and company, General Motors CEO Dan Akerson has nonetheless shown himself willing to weigh in on controversial political subjects to reporters with whom he apparently feels comfortable.
In an interview with the Detroit News, he said he declined a spot on CBS’ “Face the Nation,” because he was concerned with the politically charged media climate.
“I can’t go on it. I’m toxic. I’m like a lightning rod. I couldn’t have an intelligent discussion without someone saying, ‘He’s a welfare guy from the bailout.'”
How high will gas be before we see the Volt selling in numbers like the Cruze? Akerson said in five years, this car will be “an old, old technology and old news.” What else does he know that is being kept secret?
Even so, he opened up to the Detroit News, and his interview has prompted several media outlets to spin off stories this week.
Among the Akerson comment stories were those about revisiting the idea of a substantial gas tax, as well as raising the U.S. debt ceiling, slashing U.S. government spending and substantially increasing income taxes to aid the U.S. economic recovery – and GM’s recovery.
As for fuel taxes, in November 2009, GM-Volt wrote a story based on a Reuters report that auto executives were proposing the idea of artificially stimulating the market for electric, hybrid and especially fuel-efficient vehicles by making gasoline more expensive.
At the time, gas had recently spiked, then fallen to an average $2.66 per gallon nationally, and the magic price range being bandied about was $4-5 per gallon. It was asserted this would be a tipping point toward getting the American people to re-think their buying choices.
Well, we are at this point now, have been seeing more fuel efficient cars being bought, but hybrid sales were low last month, and a sizable chunk of sales did go to less than fuel efficient cars.
Electric car advocates are still looking well into the future for widespread proliferation, implying gas prices will need to yet go much higher, if they are to be a stimulant.
In his long interview with the Detroit News, Akerson floated the idea of a gas tax again.
“You know what I’d rather have them do – this will make my Republican friends puke – as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas,” Akerson said. “People will start buying more Cruzes and they will start buying less Suburbans.”
The context in which his statement was given was while discussing the looming prospect of other potential costs.
Federal officials are reportedly considering 3 percent to 6 percent fuel efficiency increases between 47 mpg and 62 mpg for the model years 2017-25.
It is estimated vehicles prices could be inflated by as much as $3,500 in order to comply with such a mandate.
Akerson said a gas tax would be a better way to spur more people to buy small cars and would do more good for the environment than forcing automakers to comply with higher gas-mileage standards.
“There ought to be a discussion on the cost versus the benefits,” he said. “What we are going to do is tax production here, and that will cost us jobs.”
Such a move would have to come from legislators and signed by the president. The term “political suicide” is often associated with the idea of raising American fuel taxes.
In the Reuters story last year, one advocate’s idea was to progressively ratchet up fuel prices to European levels of $8 per gallon more or less, regardless of factors in the U.S. otherwise keeping fuel prices much lower.
The belief behind this sentiment was Americans get fuel too cheaply, and this promotes creation and consumption of gas guzzlers that are unique to the U.S.
In a brief phone interview with GM-Volt yesterday, Greg Martin, director, policy and Washington communications for GM said Akerson’s comments were little more than brainstorming.
In asking whether Akerson was hoping a legislator would pick up on the idea, Martin suggested we were reading too deeply into it.
He also said GM’s lobbying arm is not pursuing a gas tax hike, and otherwise played down the comment that has been widely repeated by several media outlets the past couple days.
Other interesting comments Akerson has recently made included views on the nation’s debt ceiling.
He said rather than allow the government to default on Aug. 2, the ceiling should be raised from its $14.3 trillion limit.
“We’re too good a nation to let ourselves be a banana republic,” Akerson said, adding that it would be “unimaginable” for the U.S. to default and it could hurt auto sales.
Describing himself as “a Colin Powell Republican – not a Sarah Palin Republican,” Akerson said President Barack Obama has “done a pretty good job on the economy,” which, he said, was “a nightmare.”
To be sure GM was rescued under Obama’s watch, which Akerson observed was not only for GM’s benefit.
“If we had gone down,” he said, “the supply chain would have gone down. … And Ford was hanging on by its fingernails, too,” he said.
As for broader U.S. economic decisions, Akerson said he agrees it is otherwise bad policy for the U.S. to spend beyond its means.
“Now, we need practical decisions,” Akerson said. “I think you need to cut the hell out of the budget and you’ve got to increase taxes … on everybody – including the middle class and the rich people.”
But Akerson, whose personal net worth is estimated to be as high as $190 million, said solutions will not be overnight, and alternately said President Obama ought not do anything rash.
“I don’t think he can fix it in four years and I think we just have to stay the course,” he said.
Akerson has not said a lot directly about the Volt, even though the car is essentially the corporate symbol of pride, a backdrop that was prominently displayed at the recent shareholders’ meeting, and in much of GM’s current promotional content.
Speaking of which, staying the course at least appears to be what the U.S. Treasury is doing with its 500 million shares of GM stock that at the time of the interview were trading at around 13 percent below their initial public offering price.
“I think that it is an overhang – to have 500 million shares sitting out there – it’s a problem,” Akerson said, adding he believed Middle East unrest and oil prices are also depressing GM’s share price. “They don’t know when [the Treasury is] going to come out. Investors hate uncertainty.”
Akerson has said GM stock will go up, and it will take patience. Assuming its value does increase, it would be a good deal for GM now to buy out the Treasury at below IPO.
However, on Tuesday, Automotive News reported the U.S. Treasury is reluctant to sell its GM stock quoting “a person familiar with the matter.”
GM is sitting on over $36 billion in cash, and has reportedly discussed buying back some of its stock from the Treasury or allowing all common stock shareholders to sell back shares.
Essentially the idea of buying high and selling low is not sitting well with the Treasury, which among other concerns does not want to invite criticism that GM is getting a preferential deal.
This entry was posted on Thursday, June 9th, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.