Muscle Cars, Power Politics

GM CEO refuses to comment on lawsuit that could imperil GM bailout

GM CEO Dan Akerson / AP


General Motors CEO Dan Akerson refused to comment on the failed lawsuit negotiations that could imperil the company’s future after a closed door meeting with lawmakers on Capitol Hill.

"I don’t have any comment on legal matters," he said.

When pressed on the possibility of losing $1 billion and adding to the nearly $20 billion already lost by taxpayers on the bailout, he said, "I think I just commented, that’s it," before jumping into a GMC SUV.

When GM went through bankruptcy, it split into two companies. "Old GM" absorbed the company’s debts. The "new" GM that Akerson leads received the company’s assets, as well as $50 billion in taxpayer money from the auto bailout.

Creditors trying to collect on $50 billion in debts accrued by "old GM" are seeking to overturn a backroom deal between auto executives and several hedge funds that occurred on the eve of bankruptcy proceedings.

GM attorneys filed briefs stating that the $1 billion lawsuit "could create a chaotic situation," while bankruptcy experts have said there is a chance the suit could unravel the $50 billion bailout that enabled the company to emerge from bankruptcy with a record-setting initial public offering. Or the court may just compel GM to pay its creditors while leaving the rest of the bailout intact.

Negotiations between the two parties broke down on Wednesday. The lawsuit will return to Judge Robert Gerber, who oversaw GM’s bankruptcy proceedings. The judge has slammed the company in the past for failing to inform him of the deal during bankruptcy proceedings.

Akerson came to Capitol Hill to unveil the brand new 2014 Corvette Stingray, fresh off a "Best in Show" victory at the Detroit Auto Show. Dozens of lawmakers brandished cameraphones to capture them standing around the 450 horsepower, steel grey vehicle.

The meeting took place at the Capitol Hill Club, a Republican social club. Akerson said he was in town to put politics behind the automaker, which has been denigrated as "Government Motors" since taking the $50 billion bailout.

"The report card I was able to provide a broad spectrum of our legislators [was] received well on both sides of the aisle … it’s been a really fruitful, beneficial day, I hope for the congressional members, as well as myself," Akerson said. "We weren’t on any ballot last year, but we seemed to be in every campaign; we’re a commercial enterprise and our job … is to transform the company into the 21st century."

Akerson did inject the company into the 2012 campaign even before general election campaigning began despite his stated aversion to politics. When eventual GOP nominee Mitt Romney criticized the cost of the bailout during the Republican primary, Akerson called him "short-sighted." However, the Treasury Department began selling off its GM shares shortly after the election at a multi-billion dollar loss.

Akerson seemed to recognize the pitfalls of holding a closed door meeting with lawmakers in the wake of the bailout. When asked if he had asked Congress to advance a particular agenda, Akerson responded, "Nope, we’re fine."

Auto expert Ed Niedermeyer said Akerson’s sentiment would be much better received were he not speaking in the shadow of the Capitol after leaving a meeting "with no press or public access."

"Akerson has refused to shake off the ‘Government Motors’ label that is wreaking havoc on GM's ability to market its cars," he said. "The only public message is that every large business should be similarly concerned with kissing the ring in D.C., rather than competing on an even playing field."

The iconic reboot of the Corvette Stingray—the first since 1976—embodied the new direction GM is taking in the wake of the bailout. The car can go from 0 to 60 miles per hour in under 4 seconds, but also gets nearly 30 miles per gallon, according to Chevrolet spokesman Russ Clark.

"This car is all about efficiency and fuel economy; it’s pure American innovation," he said. "We wanted to make sure we designed a car worthy of the Stingray name and the 21st century."

"Another very, very cool car," Michigan Democratic Sen. Debbie Stabenow later said to Clark.

Sen. Carl Levin (D., Mich.) soon joined the pair.

"Beautiful," he murmured before ducking into the club.

Bill McMorris   Email Bill | Full Bio | RSS
Bill McMorris is a staff writer for the Washington Free Beacon. He joins the Beacon from the Franklin Center for Government and Public Integrity, where he was managing editor of Old Dominion Watchdog. He was a 2010 Robert Novak Fellow with the Phillips Foundation, where he studied state pension shortfalls. His work has been featured on CNN, Fox News, The Economist, Colbert Report, and numerous print publications and radio stations. He lives in Alexandria, Va, with his wife and three daughters. His Twitter handle is @FBillMcMorris. His email address is

Get the news that matters most to you, delivered straight to your inbox daily.

Register today!
  • Grow your email list exponentially
  • Dramatically increase your conversion rates
  • Engage more with your audience
  • Boost your current and future profits