agent Entrepreneur logo
MenuMENU
SearchSEARCH

GM CEO Expects to Sell All Stock in 1 Batch

August 5, 2010
4 min to read


TRAVERSE CITY, Mich. — Eager to get out from under government control, GM expects to sell its stock in one swoop when it offers shares to the public sometime later this year, its CEO said Thursday.


Some experts had expected General Motors Co. to sell only a partial stake at first, followed by several smaller sales, The Associated Press reported, but Ed Whitacre told reporters at an auto conference Thursday, "Our anticipation is we'd roll it out there all at once."

Ad Loading...


Ever since the Obama administration gave the automaker a $50 billion dollar survival loan last year, many drivers have scorned the company and bought cars from rivals. Even though GM has cut costs, changed leadership, and reported its first quarterly profit since 2007, the resentment will linger as long as taxpayers have a 61 percent stake in the company.


"We want the government out. Period," Whitacre said. "We don't want to be known as Government Motors."


Although Whitacre wouldn't say when GM wants to sell the stock or when it would file paperwork with regulators to start the official process, he repeatedly said GM wants the sale as soon as possible. The paperwork, he said, would be submitted in the near future.


GM spokesmen later said the decision on how much equity to sell will be made by current stockholders, the U.S. and Canadian governments, a United Auto Workers health care trust and former bondholders.


Whitacre said the company could have a successful IPO sometime after GM reports second-quarter earnings next week. The earnings numbers, he said, would be impressive. GM's business already looks healthier. It reported a net income of $865 million in the first quarter.

Ad Loading...


"You'd have to say our future is pretty bright," Whitacre said.


A General Motors IPO could be the largest such sale in U.S. history, Whitacre said, and demand for the shares should be good whenever they are sold.


It could be worth more than $70 billion — enough to pay back its government aid —and far bigger than a 2008 offering by Visa Inc. that netted nearly $18 billion, experts said.


Still, there are risks in doing a one-shot IPO.


The shares would sell for less if placed on the market in one large batch, experts said. Normally, larger companies sell a portion of their shares first, then further establish their earnings and management history as they offer the rest, said Linda Killian, portfolio manager of the initial public offering fund at Renaissance Capital in Greenwich, Conn.

Ad Loading...


Also, the climate for IPOs is poor, said Scott Sweet, senior managing partner of IPO Boutique in Tampa, Fla., which advises investors on IPOs.


Sweet said he would advise GM to wait until next year when unemployment is expected to drop, housing picks up and the government could have a plan to deal with its massive debt.


"I know some of the best deals in the pipelines have been held up," Sweet said. "They don't want to take a fraction of what they could get in a better market."


Sweet said GM may be pushing ahead for political reasons, so President Obama and Democratic congressional candidates can tout a successful IPO in their campaigns ahead of November elections.


Democrats could use a successful stock offering as proof that the billions in federal aid saved and created jobs, and the government was repaid. Obama appeared at two Detroit factories last week and in Chicago Thursday to tout the success of the unpopular auto industry bailout.

Ad Loading...


But Whitacre denied that GM is under pressure from the Obama administration to sell shares before the elections.


"We're trying to not tie it to any elections or anything like that, truly," Whitacre said. "We just want it to be right."


Last week, United Auto Workers President Bob King said that GM will file the IPO paperwork in mid-August. The union later said King was basing his statement on media accounts.


Whitacre also said Thursday that the automaker is looking to start up an idled factory to meet higher demand for its products, but he gave no specifics. The company has placed on "standby" two closed factories in Spring Hill, Tenn., and Janesville, Wis.


GM, he said, will have a U.S. dealership network of around 4,500, about 25 percent smaller than it was in early 2009 before the company entered bankruptcy protection.

More Industry

Photo of two men in suit jackets shaking hands next to new car inside of a dealership
IndustryApril 23, 2026

A New Consumer Culture in the Auto Dealership

Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.

Read More →
Closeup of the side of an Audi car
Industryby Hannah MitchellApril 23, 2026

New-Vehicle Sales Down

A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.

Read More →
Photo of Cadillac Lyriq SUV on road with partly cloudy sky in background
Industryby Hannah MitchellApril 16, 2026

Used Autos Selling for More

A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.

Read More →
Ad Loading...
Photo of facade of Waldorf Toyota car dealership
Industryby Hannah MitchellApril 16, 2026

Maryland Auto Group Sells

A group out West picked up the major D.C.-area collection, putting it in the upper tiers of private automotive groups in the U.S.

Read More →
Line graphic showing Cox Automotive's March Credit Availability Index status
Industryby Hannah MitchellApril 13, 2026

Auto Lending Opens Up in March

Lenders loosened access for subprime borrowers, and consumers with negative equity reached a record high, Cox Automotive reported.

Read More →
electric vehicle next to an urban charging station. EV Demand Diverges. F&I and Showroom logo
Industryby Lauren LawrenceApril 10, 2026

EV Interest Varies Regionally

U.S. consumer interest in electric vehicles lags behind other countries despite the rising gas prices caused by the ongoing war in the Middle East.

Read More →
Ad Loading...
Photo of the rear of a Mercedes GLC 400 electric SUV with a skyline in the background
Industryby Hannah MitchellApril 10, 2026

Brands Weighed on Projected Recalls

Research reveals the brands and models most likely to have higher recall rates over their lifetimes. While some brands rank high, addressing safety issues can be a selling point.

Read More →
Photo of white 2026 Ford Bronco on a sandy beach
Industryby Hannah MitchellApril 10, 2026

March New-Vehicle Sales Don’t Reflect War

Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.

Read More →
Photo of several cars on lifts in a service center
Industryby Hannah MitchellApril 9, 2026

Franchised Dealers Stand to Gain Service Business

Cox Automotive research shows both the opportunities and the challenges in turning consumers’ growing affordability needs into increased fixed-operations revenue.

Read More →
Ad Loading...
Photo of office desk with open laptop on it and an empty chair next to it
IndustryApril 9, 2026

What Matters Most in Building Your Agency

The partner you choose for growth and expansion is key, because better is the ultimate goal instead of growth for growth’s sake.

Read More →