agent Entrepreneur logo
MenuMENU
SearchSEARCH

U.S. Frets Over Foreign Investors in GM

September 3, 2010
4 min to read


The U.S. Treasury is concerned about how many overseas investors it should allow to buy big stakes in General Motors Co. through the carmaker's initial public offering this fall, people familiar with the matter told The Wall Street Journal.


The caution—aimed at minimizing any political fallout from the massive stock sale—could involve limiting or being selective about which non-U.S. investors such as sovereign-wealth funds would be invited to be "cornerstone" investors in the IPO, said these people.

Ad Loading...


Cornerstone investors typically are recruited to commit to buying and holding a large stake at a set share price as a show of confidence intended to draw in other investors. In exchange, they sometimes get a better price on the stock.


Sovereign-wealth funds and other overseas investors hold big stakes in many major U.S. companies. But the issue is touchy for GM, since U.S. taxpayers poured $50 billion into the car maker last year to fund its bankruptcy reorganization. The Treasury would begin to sell its shares through the IPO.


A decision on to what extent such overseas groups will be allowed as cornerstone investors in the IPO is expected within the next couple of weeks, these people said.


A larger group of cornerstone investors could clear the way for the Treasury to offload a bigger piece of its 61% stake in GM through the stock sale, which is planned for mid-November. GM and the banks underwriting the deal are pushing for the biggest possible investor pool to increase the size of the stock offering, which will likely involve stakes in the car maker sold by the Treasury, a union-managed retiree trust fund and Canadian governments.


The company would like to eliminate the U.S. stake as soon as possible since it has dissuaded some potential customers from buying its vehicles. But the Treasury wants to hold out for the best possible price for its stake in an effort to make the government whole on its investment or even make a profit. That might involve the U.S. selling less of its stake this fall and more over time.

Ad Loading...


To have cornerstone investors in place in time for the IPO, GM would need to have a plan in place in the next couple weeks, said the people familiar with the matter.


The automaker plans to launch a "road show," in which it would pitch the IPO to investors, immediately after the Nov. 2 midterm elections, with a goal of holding the offering before the end of November, people familiar with the plans said.


That time frame would give GM a chance to include its third-quarter performance as part of its pitch. The company, which made $1.3 billion in the second quarter, its largest quarterly profit in six years, has said it expects to continue to make money in the year's second half, though the profits will be slimmer.


A key part of the road-show message will be an assurance that new Chief Executive Dan Akerson will remain with the company for several years, according to people familiar with the matter. Akerson took over as CEO on Wednesday, succeeding Edward E. Whitacre Jr.


The 61-year-old Akerson told the board he would stay from two to five years, or possibly longer, said people familiar with the matter. Whitacre was unwilling to make that commitment, leading to his announcement last month that he would step down as CEO this week and as chairman by year's end.

Ad Loading...


GM's board felt it was critical to present a long-term CEO to investors as part of its IPO pitch.


Akerson, known for his work as a telecommunications deal-maker, is GM's fourth CEO in less than two years. He had been named by the government to the company's board last summer. Akerson's compensation package will likely include financial incentives that kick in after a few years on the job as a way to signal he intends to stay.


On Thursday, Akerson sent a Labor Day-timed message to employees in which he said he had met recently with United Auto Workers President Bob King and is confident the carmaker and union can work together.


Describing a meeting with Mr. King and UAW Vice President Joe Ashton, Akerson said, "While we will not always see eye to eye on everything, GM will succeed to the extent that management and labor work together."

More Industry

Two dodge cars outside of dealership.
Industryby Lauren LawrenceSeptember 17, 2026

Auto Affordability Inches Up

The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.

Read More →
Five men smiling for photo in front of Honda car dealership.
Industryby Lauren LawrenceSeptember 10, 2026

Ohio Auto Group Under New Ownership

After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.

Read More →
Blue and white RV parked on beach facing the ocean.
Industryby Lauren LawrenceSeptember 3, 2026

RV Group Expands Carolina Footprint

Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.

Read More →
Ad Loading...
Photo of two men and one woman on a discussion panel
Industryby Hannah MitchellSeptember 1, 2026

Agent Acumen

An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.

Read More →
Gloved hand holding two wrenches next to “Turn Overdue into Opportunity” Graphic
Industryby Lauren LawrenceAugust 27, 2026

Missed Maintenance Creates Opportunity

As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.

Read More →
Mitsubishi shadow line-up
Industryby Hannah MitchellAugust 25, 2026

Mitsubishi Unveils U.S. Plan

The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.

Read More →
Ad Loading...
Photo of a laptop, cellphone and eyeglasses on a desk next to an office window
IndustryAugust 24, 2026

Selling to Grow

The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.

Read More →
Mechanic holding a vehicle diagnostic device while standing above an open car hood
Industryby Hannah MitchellAugust 24, 2026

Recalled Vehicles Hit 5-Year High

Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.

Read More →
outside of car dealership with cars parked in front
Industryby Lauren LawrenceAugust 20, 2026

Auto Group Acquires Top-Performing Rooftop

Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.

Read More →
Ad Loading...
Cars from the rear on a Shanghai freeway
Industryby Hannah MitchellAugust 19, 2026

China as Pacesetter

Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.

Read More →
Ad Loading...