Would you mind autographing some of the christmas as a special favor for santa claus . It is one of the things that i do best. It is a good thing you got, santa claus. Yes, indeed. My father santa claus gave it to me. My, that has some of the dogs hair in it. Roosevelt to edith grace coolidge, weeknights at 9 00 on cspan. The outgoing chairman of General Motors told a National Press club audience today that gm is investing more than 1 billion in u. S. Plants. He will be replaced in january by the first woman to head a major automaker. He calls this historic about but not surprising. This is an hour. Good afternoon, and welcome to the National Press club. My name is angela keane. I am a reporter for bloomberg news. We are the worlds leading professional organization for journalists, committed to our future with programming such as phil, wire fostering a programming such as this, while fostering a free press worldwide. To donate to programs offered to the public, through our journalism institute, please s. Org institute. I would like to welcome our speaker today as well as those of you in our audience. We have working journalists who are club members. I note that members of the public are also attending, so it evidencecessarily the of the lack of journalistic objectivity. I would like to welcome our c span and public radio audiences. You can follow the auction today on the action today on twitter. We will have a question and answer period. Now it is time to introduce our head table. Williamr right, wilkins, executive director of trip, the road information program. Forsenior Business Editor npr. Washington correspondent for the Salt Lake Tribune and the chairman of the National Press club board of governors. Gabe nelson, Washington Press correspondent for automotive news. Pure chief for the detroit news. General motors about Vice President of Global Communications and public policy. Fitzgerald, finance and Investigative Reporter at the center for Public Integrity and the chairwoman of the mass National Press clubs speakers group. Vice president of Business Wire and a member of the speakers committee. Washington bureau chief for the buffalo news. At mslVice President group. John hughes, treasurer of the National Press club. Washington correspondent for the dallas morning news. Reporter covering the business and International Trade for the washington times. [applause] our guest today rocked the auto world last week when he announced he would step down as chairman and ceo of General Motors. Racked up tributes. He came to gm in 2010 as the ceo to turn around the biggest of the big three from bankruptcy. That work ended last week when the u. S. Treasury sold the last of its shares. One can imagine the champagne corks popping when that news was announced. General motors led global sales for 77 consecutive years from 1931 through 2007, longer than any automaker. The global downturn beginning 2008 also turn into a crisis for the u. S. Automotive industry. It was further weakened by increases in gasoline prices, discouraging Sport Utility vehicles, the breadandbutter of the u. S. Industry profit. Gm filed chapter 11 bankruptcy in 2009 with 82 billion in assets and 170 billion in liabilities. They shed several brands. They were in General Motors 30 billion in return for a 60 stake in the company. Following an ipo, the treasury last week said it recouped 39 billion of the 50 billion in spent on the gm bailout. Gm has turned around a bailout and renovated dealerships. Under his leadership, gm placed first in the initial quality study, putting an american automaker on top for the first time in 27 years. Gm cars and trucks have won accolades from Consumer Reports and motor trend. Before joining gm, he was a managing director and head of global buyout for the carlisle group. He served as ceo or president of several telecommunications and Technology Companies including Nextel Communications and general instruments. Please join me in giving a warm National Press club welcome to dan akerson. [applause] thank you, angela. Many thanks to the National Press club for inviting me to speak. This is an auspicious time to speak to an audience of reporters. As you may have heard, gm has been in the news a lot lately. Last week the transformation of General Motors passed two major milestones. First, the United States treasury sold its last share of General Motors stock, closing a remarkable fiveyear chapter in American Business history. That got some media attention. The next day we announced that mary borrow will become the next ceo. That did not go unnoticed either. On that day, for the first time in decades, all eyes at General Motors turned toward the future. The end of government motors era has cleared the way for General Motors to truly soar forward. We are building a gm that america can once again be proud debt. It has not been easy. The path forward for mary and the team will not be easy either. The enormity of the task became Crystal Clear when i became ceo. The new gm was fragile. We had emerged from bankruptcy that lasted only 39 days, and that was good because we did not do it reparable damage to our brands or dealer networks. But a 39day bankruptcy only gave us time to repair the debt side of our Balance Sheet. Truly transforming a business would take much, much more. We had to remedy decades of poor decisions, indecisions, and no decisions that started to pile up in the 1970s and 1980s like so much running firewood. I categorized of the problems we face into three broad buckets. They were outofcontrol costs, wasteful complexity, and diminished quality funded by ruinous debt. You can pick almost any point in time and find something to shake your head over. For example, in 1978, General Motors paid almost as much in benefits as earned in net income. The next year, the company agreed to the largest pension increase in uaw history. Eventually, general motor pensions, the largest in the world, became chronically and dangerously underfunded. Despite tens of billions of dollars in cash and stock infusions to make it whole. These actions actually weakened the company because they treated the symptoms and not the disease. Robbing precious dollars for Product Development. More recently, u. S. Hourly costs increase an average of 4 annually from 2003 to 2007 even though the company had total operating losses of 17. 5 billion in 2005 to 2007. While management figuratively burning furniture to keep warm, we were automatically increasing our fixed costs. Complexity was everywhere. Just a few short years ago General Motors had more than 30 different vehicle architectures supporting sales of about 9 billion vehicles worldwide. Then the ridiculous. The company had almost 70 different advertising agencies around the world just to support the chevrolet brand. It is staggering, but it also shows how we lost focus and our advantage. In another move, gm leaders outsourced nearly all of the companys Information Technology. We effectively dismissed data capture and proprietary analytics as a core competency just as the internet was about to transform all modern business models. We also ended up with 23 leased or partially owned data centers which is not only costly but risky. We are insourcing our i. T. And growing it as a core competency. The 23 data centers will be reduced to two which will increase our performance, our reliability, and our cost. At one point i would barely close her own books in a timely manner because they were on different letters. For those who are financially trained that is finance 101. The list goes on. We all know what happened next. We know what happens next. The company that top to be fortune 500 when it was first listed in 1955 and stayed there for 35 years fell into disgrace. Something even more sobering, gm have lost sight of the customers and what the truly valued quality, compelling design, and reliability. In my heart of hearts, i knew gm was fixable if the new Leadership Team played team ball and systematically addressed the companys shortcomings. I made a promise to myself and the board to deliver on three important initiatives in my tenure. The first was the restoration of gms good name. Second, the transformation of the companys basic operations. My third goal was to put quality and the customer back at the center of every decision we made. As a result, every aspect of our business, every angle we took was to make every system and every operation best in class. We did not set out to become competitive or average. We wanted to be best in class. For example, we have committed 3 billion of our precious fortress Balance Sheet to build our dealerships and create the best customer sales and Service Experiences in the industry. We have reduced the time it takes to resolve complex customer issues from 28 days to a week. It is our objective to get it down to one day. We are launching the industrys largest deployment of 4g lte broadband to bring the analog cars of today into the digital world. We are investing more than 500 million to build an Information Technology capability that would make Silicon Valley proud. We have invested more than 4 billion to grow gm financial around the world. We have been the patent boards automobile innovation leader for decades. We were slow to commercialize our intellectual property. We are now innovating for the benefit of our customers. I will give you a good example. Reducing the weight of our cars will improve our mileage fuel economy to meet the new demanding standards. That means we are going to have to use more aluminum. Some may be engineers in this group. No one has ever figured out how to weld aluminum. We have. We have patented it. We are able to use more aluminum, less steel in things such as car doors, where the industry used pop rivets. You see them in airplanes and cars. We no longer have to do that. It takes complexity out of our assembly lines. It reduces investment. It gives us competitive advantage. We have revamped financial systems. We are now able to figure out profit line profitability because we had different letters around theedgers globe. On the product front, we will reduce the number of vehicle architectures by half within the decade. We have also 40 billion of our pension liabilities. We have doubled our revolving line of credit and have dramatically simplified our Balance Sheet. We have worked hard to earn the trust of our employees, both hourly and salaried, and get everyone aligned on straightforward profit and quality targets. Today when a salaried employee gets a bonus, hourly workers get a profit share. We are aligned. We are not at odds with each other any longer. I could keep on going, but i think you get the picture. We have been trying to fix this airplane while in air. We have done a credible job. The bottomline result has been encouraging. We had a 21. 3 billion ipo, the largest and i feel history at the time. We have generated over 600 4 billion in Global Automotive revenue sent our reorganization in 2009. We have had 15 profitable quarters in a row and earned more than 30 billion in earnings before interest and tax. We have announced more than 9 billion in Capital Investments in u. S. Facilities. We have returned to the s p 100. All of this is good for our employees, our investors, our industry, and our country. But none of it will matter for but none of it will matter for much of we go back to business as usual. That is why it is critical to put the customer back in the center of every decision we make. I keep returning to this theme because it is what the worlds strongest brands do they embrace the customer as foundational. This is the biggest cultural change that we have been able to infuse into the new dm. I think our products tell the story best. It was only a few years ago that president obama rhetorically asked, why cant they not make a corolla . Please. [laughter] no one is asking that anymore. Today we are taking on the best vehicles in the world and winning with products like the cadillac, cts, and chevrolet impala. We are entering new segments like midsized truck that our domestic competitors have abandoned to the japanese. Our trophy case is filling with quality awards. In fact, we became the first and only american automaker to top jd powers initial quality study, ever. Consumer report ranks the Chevrolet Silverado and impala as the best sedan and truck you can buy. Just last week, auto week magazine named the corvette and silverado as the best of the best. That is ok. It is the first time that one manufacturer ever won both categories in the same year. This is a 2013 north american car of the year. Its stable mate is up for best north american car for 2014. This will be named next month. I anxiously await the outcome. It is an embarrassment of riches that i am not there is about. As good as all of this sounds, the truth is we are still in the early chapters of our comeback story. We have a lot to prove. Especially to those who left us from other brands. The only way to bring them back to keep making cars and crossovers with world class quality. We will take another step forward by announcing new investments totaling 1. 3 billion in five u. S. Plants. This will take this to more than 10 billion. There is that 10 billion again. We are investing it. We will keep paying dividends to the American Public who supported this company in the darkest hour. This will be spread from detroit to our birthplace city of flint, michigan, and two hardworking communities like romulus michigan, toledo, ohio, and bedford, indiana. About 7500 people work in the cities. Todays announcement will create or retain another 1100 jobs in america. That brings our total of new and retained jobs to more than 26,000. It is by two different administrations dared the entire u. S. Industry is back. Rather than allowing the industry to collapse and turned the Great Recession into another great depression, our nation stood by us. We come to work every day determined to restore gm as the american standardbearer in the Global Automotive industry. Someone asked me recently if the government motors tag still hurts us. To be honest, we do not hear it much anymore. It reminds me of a comment attributed to ronald reagan. He said he knew his economic plan was working when they stopped calling it reaganomics. Gm is working again. We have put together the Leadership Team with experience, optimism, and a strong competitive streak. Were making vehicles that are the pride of the industry. When i became ceo, i wanted to help build a sound foundation for the next generation of leaders to build on. I cannot wait to see how far they can take it. I think it is going to be great. Thank you. I will be glad to take any questions you might have. [applause] the autopredicted bailout would make money. We know chrysler received money as well. You mentioned 10 million that gm gained and the taxpayers did not gain back. Do you think gm should repay the taxpayers that money directly . First, let me contrast to something there. The center for Automotive Research estimates that between not having to pay for unemployment, social costs in the various communities in the midwest in particular in lost tax revenue that it was about a 38 billion gain. We had a 26 billion pension deficit that is ever been thrown into the pgc account. That means that one of the advantages i have, i wasnt there. When you go through a bankruptcy coming out at private equity, everybody takes a haircut at the table. We have paid back all the debt. They could have cast the big group see differently. They were taken a ride just like you do when you buy stock. We have new shareholders. We went to the market. We sold tens of billions of dollars of equity. When you come in, youre buying that on how it is wrapped in stacked. To go back and pay that back. I can tell you there would be shareholder that would be difficult to defend. The die was cast in 2009. It played out for the national good, an industry where for many years there were decisions, no decisions, bad decisions. All of it has been rectified in large measure. The Automotive Industry in this the Automotive Industry in this country is between 3. 5 and 4 of the total gdp. The foreign competition would have been a serious mistake. I would not accept the premise of this is a bad deal. Gm had applied for low interest loans from the government and then rescinded the application before a decision was made. How would gm be different if you had gone through and received those loans . That was one of my first actions. I figured we had taken enough from the government that we would stand on our own two legs or not. We turned those loans down and decided to go. Some of our competition are more indebted to the federal government in terms of almost 7 billion. Maybe that is a question you ought to ask some of our competition ford. [laughter]