New General Motors Hopes to Profit in 2 Years
DETROIT, July 10, 2009— -- General Motors is out of bankruptcy but it might take another two years for the troubled automaker to even begin to think about turning a profit.
After the automaker emerged from Chapter 11 protection today, CEO Fritz Henderson told ABC News that he expects the company by 2011 to "get ourselves to a situation where we are no longer bleeding cash or where we are basically at least cash flow neutral if not cash flow positive. We think we can accomplish that."
General Motors must get it right this time around, he added.
"We have a second chance. Second chances in life are precious … there are no third chances," Henderson said.
The car maker can turn a profit, he said, because it "will be a lot leaner" and "simpler."
"What we can do now is [put] 100 percent of our time on getting the cars and technology right … making sure we win customers and then my job, our job collectively is to make sure the culture is focused on winning."
Watch "General Motors: From Dream to Downfall" on "20/20" TONIGHT at 10 p.m. ET.
The company spent just 40 days in bankruptcy court and exited as a stronger, leaner and more streamlined business. Free of much of its old debt and expensive contracts, the company hopes it is now on path toward profitability.
In a law office in New York, on a table strewn with stacks of paper and a lot of laptops, GM completed the sale of its good assets to a government-controlled entity. Early this morning catering removed the coffee and replaced it with bottles of champagne.
"Today marks the beginning of a new company," Henderson said at a press conference this morning in Detroit. He said the company wants to return to designing, building and selling great cars. "There's nothing that we want to do more than that."
"We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," Henderson added.
Henderson said that "the last 100 days has shown everybody – including ourselves – that a company not known for quick action can indeed move very fast." He promised to carry that intensity on into the new company.
"This will be the new norm at General Motors," Henderson promised.
The U.S. government -- which has provided some $50 billion in financing -- received a 60.8 percent stake in the new company. The Canadian government, which provided $9.1 billion in loans, has an 11.7 percent stake and a United Auto Workers union retiree healthcare trust fund holds 17.5 percent.
"While this restructuring required difficult and painful sacrifices from all of the company's stakeholders - and the American taxpayer - it has saved tens of thousands of American jobs and positioned GM to reclaim its position as a competitive and sustainable global company," the Treasury Department said in a statement. "The hard work of charting a path to viability now rests with GM's board and management, but we are confident that we remain on track to ultimately see returns on these taxpayer investments."
