x Abu Dhabi, UAESaturday 22 July 2017

The arduous, personal journey of getting General Motors back on track

Last month General Motors had the biggest IPO in US history, earning more than $13bn, and the 102-year-old car maker is set to make a profit this year - but it has not been easy.

"Oh, the last 18 months have been the most difficult of my life!"

As Susan Docherty buries her head in her hands only half in jest, the vice president for international sales, marketing and after-sales for General Motors can be excused for her use of the dramatic. In town last week for the Abu Dhabi International Motor Show, she spoke over dinner about, among other things, the work involved as she and other executives at GM went through the second-largest bankruptcy in history.

"We were regularly getting two hours sleep a night," says Docherty. "My sleep patterns were so disrupted that it took me two more months afterward just to adjust back to eight hours of sleep. My family says I should write a book about it."

Most people know the details of the US and Canadian governments bailouts of GM and Chrysler last year. The General was given more than US$50 billion (Dh184bn) in funds from the Troubled Asset Relief Program (Tarp) (as well as more bailouts from the Canadian government) and forced into bankruptcy in June 2009, dividing the company into "Good GM" (the part of the company that would survive) and "Bad GM" (the assets that would be sold off or dropped altogether).

The Pontiac, Saturn and Hummer brands were cut, Saab was sold, GM's CEO changed three times and the US government picked up 60 per cent of the company. It was a tense and tumultuous time for the corporate giant and, while some still speculate if using public money to prop up General Motors was wise or not, few can understand the human cost that went on behind the scenes.

Docherty and her colleagues were tasked with getting the company in order for the Chapter 11 protection process, which meant combing through every asset General Motors owned.

"Imagine everything on this table is an asset of GM [and she picks up a spoon]. We had to go through every asset and ask, 'Do we need this?' and 'What do we owe on this?' We would then have to see if the balance was worth it, and put it either into the old GM or the new GM.

"Also, in a bankruptcy setting, the US government needs to have copies of every contract we have; that includes parts suppliers - every muffler contract, every hose clip, everything. Office chairs, building leases, everything. And not only that, we had to have contracts for advertising - and that includes digital houses, newspapers, production houses, PR. Anything that we had any kind of contract for, they needed a copy of."

Because of the sensitive nature of using government funds in the bailouts, politics played a part in the process, and the GM executives weren't the only ones to suffer because of it.

"Some companies we had contracts with did business for GM outside of North America, but because people in North America didn't want their bailout dollars to cover anything outside of the continent, we had to dissolve all of those contracts and start anew.

"We also had to cut payments to our GM divisions outside of the US and Canada; that means that they effectively had no money at all for employee salaries or to purchase new stock. So the dealers and outside divisions had to find the money - loans and credit - on their own. But they had to make do, just like we did.

"On top of all that, we had to do our regular jobs and these bankruptcy jobs all at once in those 18 months. The company also had to carry on as a company, selling cars, developing new products - all the stuff GM usually does."

In November, GM had the biggest IPO in US history, earning more than $13bn, and the 102-year-old car maker is set to make a profit this year. And with a slate of new vehicles scheduled for release, things are looking rosier for General Motors, bringing more than just relief for Docherty after an arduous and uncertain 18 months.

"I've described it to friends like this: imagine GM is an airplane and we're flying it. But at the same time, we're refuelling it, we're re-engineering it, we're taking out passengers and adding new ones, and then everyone on board changes their seat.

"But we've been given a second chance, and I'm very grateful," effuses Docherty. "Believe me, after all that, we're not going to let it happen again."