agent Entrepreneur logo
MenuMENU
SearchSEARCH

U.S. Plays Big Role in Share Offering of General Motors

August 19, 2010
2 min to read


WASHINGTON — As General Motors moves to become a public company again, all the big decisions on the timing, size and price of the share offering will be left to its largest shareholder: the U.S. government.


The Obama administration, mindful of the politics surrounding its $50 billion GM bailout, says it is eager to liquidate its 61 percent stake in GM as swiftly and lucratively as possible, The Wall Street Journal reported.

Ad Loading...


But administration officials say there is no push to sell shares before the November midterm elections. "We want to do this as quickly as practicable, but in a way that protects our investment," an Obama official familiar with timing discussions told the Journal.


The outcome of GM's share offering will be a critical political milestone for the Obama White House. The administration's decision last year to undertake a federal intervention in the affairs of the nation's largest auto maker—firing GM chief executive Rick Wagoner and steering it through a bankruptcy restructuring—provoked a backlash among conservatives. GM executives say that backlash also extends to potential customers, who say they will bypass the auto maker because they object to the federal bailout.


The White House said it had to step in to prop up GM and the smaller Chrysler to avoid chaotic collapses at two huge employers in the nation's heartland.


Now, as President Barack Obama tours the country to defend his economic policies, he has pointed to the rebounding auto industry to make the case that the taxpayer-funded interventions at GM and Chrysler accomplished their goals: Saving two iconic companies and salvaging thousands of jobs.


In a swing through Michigan last month, President Obama said that the entire U.S. auto industry was at risk in early 2009, when his administration decided to usher GM and Chrysler through bankruptcy proceedings with the help of tens of billions of dollars in taxpayer assistance.

Ad Loading...


"The industry looked like it was going over a cliff," he told workers at a Chrysler plant.


He then cited figures showing that the U.S. auto industry had hired 55,000 new workers in the year since GM and Chrysler emerged from bankruptcy protection last summer, after shedding 334,000 jobs in the year leading up to the GM and Chrysler bankruptcies.


The GM IPO, though, will end up answering a much simpler question: How much did taxpayers lose—or gain—by bailing out GM last year?


Analysts say that the market would have to value GM's stock at around $70 billion for the government to recover the whole of its remaining investment—a target that some say is unlikely, but not impossible.

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 →