General Motors is saying thanks but no thanks to more federal loans. The Detroit automaker is withdrawing its application for more than 14-billion dollars in low-cost loans from the Department of Energy.
Many car companies including Ford have received DOE loans, which are intended to help auto companies revamp factories to build more fuel-efficient cars and trucks. GM applied for loans through the program shortly after emerging from bankruptcy. But the automaker says its financial situation has improved since then.
Gerry Meyers is a professor at the University of Michigan Ross School of Business. He's also a former Chairman of American Motors Corporation. He says taking the loans would have given GM more debt. And the automaker told prospective IPO investors late last year that it would avoid going deeply into debt.
It’s quite clear that they’re trying to clean up that balance sheet and also get the government out of the business, so it’s just another step in that direction and I think it’s wise.
Meyers says the next step to GM’s recovery is to stop the revolving door at the top executive level. The company has had four CEOs in two years.
The company has also been frequently shuffling the deck of upper-level managers. Former Onstar president Chris Preuss recently left the company, replaced by Linda Marshall. Mary Barra was recently named head of Global Product Development, replacing Tom Stephens, who became Global Chief Technology Officer.
Chris Perry, recently named head of U.S. Marketing for GM, is the fifth person to have that job in two years.
Even GM's President of North American operations, Mark Reuss, is relatively new to the job. He was named to the position shortly after GM emerged from bankruptcy in the summer of 2009.