GM Initial Public Offering might not fully pay the government

GM has gone via disaster and is returning to triumph. The company has started posting profits again, after it had to take billions in loans from the U.S. and Canadian governments. The underperformers of General Motors brands were let go when the company was under bankruptcy protection. There was lots of turmoil within the office also. GM has a new executive, again. GM nevertheless owes lots of money to the government. GM leadership doesn’t think the loans will all be paid off in the upcoming IPO. Only time will tell.

It could be many years until General Motors is paid up

General Motors has had a busy summer. The business got a new CEO, and announced it would file for an initial public offering. It was more than just idle chatter. The company did file for an Initial Public Offering. The working class individuals are still technically majority owners, as 61 percent of GM stock is held by the Treasury. Those shares will get converted and sold to investors in an Initial Public Offering. That is how the government will get compensated back. However, as outlined by the New York Times, General Motors does not expect that the loans from the auto bailout are likely to be compensated back all at once.

General Motors requires a reputation first

In order for the Treasury to feel good about this, and for GM, there must be more of a history of new profitability on the part of the company. The new Chief Executive of GM, Daniel Akerson, right away claimed that selling all of the shares the government holds at once is not a feasible goal. He was totally open about it at a recent press briefing. Akerson just lately held a press briefing about the upcoming IPO. That was precisely what he told a room full of reporters.

A long road ahead

GM is down to four brands. The company is now Chevy, Buick, Cadillac, and GMC. The outgoing CEO, Ed Whitacre, announced his retirement as soon as the second profitable quarter in a row was posted.

Further reading

NY Times

nytimes.com/2010/09/17/business/17auto.html?ref=automobiles