1998 Saturn SW2 White smoke from exhaust disappears when I

Engine Cooling problem
1998 Saturn SW2 4 cyl Front Wheel Drive 120k miles

I just bought a 98 saturn station wagon and found out that it was losing water out the exhaust. I thought this was a head gasket issue, so I shaved the head and replaced the head gasket. I still have the same amount of smoke. Then I remembered that the owner said that "when you turn on the AC, it doesn't overheat". I thought he meant heater, but for the heck of it, I turned on the AC and the white smoke went away immediately. Turned it off and the smoke returned immediately. Any ideas?

Thanks.