Ed Whitacre, chairman of General Motors, gave his first speech since taking over his current position during a lecture at Texas Lutheran College in Seguin, Texas Nov. 10, 2009. Below is the full exerpt of his speech.
Note: Click Here to see the entire event on video
Thank you, President Svennungsen, for those nice words. It’s a pleasure to be back here among so many friends at Texas Lutheran University, and I welcome the invitation to speak here.
As you know, I have a special affection for TLU. For starters, they offered me a teaching job one month after I retired from AT&T.
That meant a lot to me. I spent those four weeks at home, catching my breath and collecting my thoughts on how to put 40 years of business experience to good use in the classroom.
But you know who appreciated my TLU job the most, don’t you?
My wife.
It only took 30 days before she thought it was a great idea for me to spend as much time as necessary in Seguin.
She was right. I really enjoyed the experience. I made some great friends in people like Dr. Robert Galloway, who taught the class with me…and who did all the heavy lifting. Good to see you, Bob.
And I learned that TLU attracts some of the best instructors and brightest young minds around. It was really energizing just to be around them…and to be honest, I probably got more out of the class than the students did.
Well, my tenure as executive professor at TLU ended in April 2008…and I’m proud to say that I was able to land another job.
Since July, I have served as chairman of the board for General Motors. And while it’s only been a few months, I can tell you that this is shaping up to be one of the most challenging and gratifying experiences ever. That’s saying a lot, because I spent many years at AT&T, a remarkable company that re-defined the telecom landscape…and continues to do quite well. I have many good friends there, and I’m proud of the job they are doing.
At GM, our work is cut out for us, but we are making solid progress, which I’d like to spend a few minutes discussing.
When the chance to lead GM surfaced, I thought about it, long and hard. In the end, I said yes because I believe deeply that America needs a strong, vibrant auto industry. I believe this iconic company needs to lead it. And I want to do my part to make that a reality.
There is just too much at stake for the country. The auto industry is critical to our economy, providing or supporting more than 4.7 million jobs.
More than anyone else, domestic manufacturers are committed to a healthy U.S. supply base, and we invest billions in American companies.
U.S. automakers have developed and perfected many of the nation’s advanced manufacturing concepts.
And, we are a great source of philanthropic support for untold numbers of organizations and initiatives across the country.
So, this industry is a powerful force for economic growth, technological innovation and, quite frankly, American pride.
My goal in taking this job was pretty simple. I wanted to help return GM to its position as a global leader in the automobile industry.
Under the best of circumstances, that’s a pretty big objective. And, of course, nothing about the automobile business can be described as being the best of circumstances right now.
We’re all aware of the near-catastrophic situation facing car makers…and, to be fair, other industries…as the financial crises exploded and the recession wore on.
Simply put, people stopped buying cars and trucks as they lost jobs and as credit dried up.
At the worst of it, U.S. auto sales declined more than 30 percent and hit the lowest per capita level in 50 years. The speed and severity of the decline was unparalleled.
To survive, GM accepted significant government assistance in the form of loans and ownership…and the company was forced to reorganize.
So, while I had…and still have…big ambitions for the company, I took the job with a serious level of skepticism.
Today, some five month later, I am very pleased to report that my skepticism is giving way to optimism, little by little…day by day.
This company has made remarkable strides since emerging from bankruptcy. I can’t say for certain when we will achieve the goal of returning to the top of the industry…but I can say that we are much better positioned for success than I thought possible in July.
Just consider these accomplishments so far.
We have taken substantial steps toward getting this company back into fighting shape— slimmer, more efficient, more agile and more responsive—which sounds like a good description of a car you’d like to buy, doesn’t it?
We have revamped the board of directors, bringing in new people and fresh perspectives. We have reduced executive level employees by one-third and restructured management so we can make faster…and I hope, better…decisions.
We are cutting our brands in half in order to focus maximum energy and resources on the Buick, Cadillac, Chevrolet and GMC brands.
As a result, we will optimize our dealership footprint down to 4,000 next year, from a high of 6,300 in 2008.
And we have improved our cost structure and cleaned up our balance sheet. Our debt burden has been lowered, and our liquidity is much improved.
So, we are getting into fighting shape. We are not there yet, but we are definitely on our way.
This is a critical first step back to sustained growth. But to be honest, these structural improvements are not why I’m optimistic about GM’s future.
I’m optimistic for reasons that are more basic to what it takes to win. That starts with the quality of the vehicles we are producing and ends with the commitment of our people to succeed.
Let’s start with the fact that today’s Buick, Cadillac, Chevrolet and GMC cars and trucks are without question the best in company history…and among the best you can find anywhere.
Now, you are probably saying, “Well, Ed, you’ve been there all of five months. How can you be so sure?”
Fair enough. You don’t have to take my word for it.
The Chevy Malibu was the North American Car of the Year in 2008. The Cadillac CTS was the Motor Trend Car of the Year in 2008. The 2009 Buick Enclave was selected by the Insurance Institute of Highway Safety as the Top Safety Pick.
The Buick LaCrosse, Cadillac CTS Sport Wagon, Chevrolet Camaro, Cadillac SRX and Chevrolet Equinox have all been named to the short list of nominees in the North America Car and Truck of the year competition.
Most importantly, consumers are putting GM back on the consideration list…and they like what they see. Just last week, Consumer Digest announced its 2010 Best Buy Awards. Of the 47 vehicles selected among all auto makers, 15 of them were GM vehicle, and 7 were Chevrolet.
But a better indication of how strongly we believe in our products is our “May the Best Car Win” campaign. If you buy a new car from us and don’t love it, you can bring it back within 60 days, and we’ll refund your money.
The program has helped boost brand interest in our vehicles by about 11 percent, according to Edmunds-dot-com. That’s why we extended “May the Best Car Win” into January.
And if that’s not enough, if anyone here is in the market for a new car or truck, come see me after my talk, and we’ll work something out.
Of course, the best sign that we are producing great cars and trucks is that people are buying more of them…and I’m pleased to show progress there as well.
Our October U.S. sales totaled nearly 178,000 units…which is our first year-over-year U.S. sales gain in 21 months. And 95 percent of those sales were generated by our four core brands.
We also gained market share for the third straight month, and now have nearly 21 percent of the U.S. market share.
You can’t grow in today’s competitive environment without offering customers the best products available.
You also can’t turn in numbers like that unless your company workforce is united and dedicated to making customers happy. And that’s another reason why I’m optimistic about GM.
To a person, the men and women behind these great vehicles want this company to succeed…and they know it starts with being as responsive as possible to customer demand.
To make that happen, we have implemented sweeping changes to refocus the company on the customer. From the CEO on down, we are reaching out to customers, soliciting their input and acting on it.
Here’s just one example: in August, two weeks after we unveiled plans for a new Buick crossover, we canceled it. Public reaction…from employees, dealers, media and most importantly, from our customers…was clearly unfavorable to it.
So, we listened and we moved on.
You can also see our responsiveness to customer demand in our commitment to green technology.
From vehicles that are gas-friendly to those that are gas-free…GM is a leader in developing clean, green, fuel-efficient vehicles. We offer more models that get 30 miles-per-gallon or higher on the highway than any other competitor, foreign or domestic.
We offer the widest variety of hybrids in the market…and we will soon introduce the Chevy Volt, our extended-range electric vehicle that is capable of getting really remarkable mileage.
You can drive it 40 miles or less without using a drop of gas. When you consider that in the U.S. 78 percent of commuters drive less than 40 miles each day…you can see the potential this vehicle has to reduce fuel consumption.
I have spent a fair amount of time meeting with our employees at all levels…management and non-management, in the plants and at the dealerships. Their enthusiasm is contagious. Their desire to provide customers the best vehicles possible is real.
And, for that matter, so is their desire to thank the American people for their generous assistance. There is a sense of urgency at GM to repay the TARP money as soon as possible. We are anxious to see the government’s stake in GM repaid after we take the company public.
We know the best way to achieve those goals is to grow the company by giving customers the cars and trucks they want…with the quality they expect…and at a price they demand.
As I said earlier, I am more comfortable with that goal today than when I started this job.
We have a long way to go, but we are headed in the right direction. The people of GM understand that we have been given a rare second chance, and we are making the most of it.
Of course, the greatest unknown in all this is the economy. More than anything else, the economy is the determining factor in how far or how fast we can go.
Right now, I think the economy is best described as stabilizing. Now, stability usually sounds pretty boring…but I will take that over what we’ve been through the last two years or so.
Some indicators such as productivity, retail sales and overall growth for the third quarter are up, and those are all good signs. And, the stock market has had a nice run since March, increasing by 50 percent.
But for us, the economic statistic that means the most is employment, and there still isn’t much to cheer about.
While job losses seem to be moderating…the overall unemployment rate of 10 percent is brutal.
So, although our October figures show that GM can grow and gain share in a tough economy, increasing employment is the fastest and surest way for us to grow. I hope we see this start to improve soon.
For that matter, I imagine that job growth is of interest to many of you in this room…especially the students who are looking to graduate soon.
The job market is a little intimidating right now, isn’t it? Well, my advice to you is to stay positive, because believe it or not, there are opportunities out there. They may be harder to find, but they exist.
Companies are always looking for smart people who are passionate about their work. That’s true in good times and may be even more relevant in bad times, when quality is at a premium.
It’s possible that the poor economy might cause you to change direction. The path you want to follow might not be as clear or straightforward as you hoped.
You might find yourself in a job that you didn’t envision, at least for a while.
But that’s not so bad. A detour here or there could keep you on your toes…and it might present you with rewarding opportunities you never anticipated.
I mean, if an out-of-work business professor can wind up as chairman of General Motors…anything’s possible, right?
You bet it is. And TLU is one of the best as preparing you for what’s possible.
So, keep working. Keep staying positive. And I’m sure good things will happen for you, too.
Thank you again for inviting me back here. I have enjoyed my time with you a great deal, and now, I look forward to taking your questions.
Thank you.
Thank you and good evening, everyone.