USA Today
TRAVERSE CITY, Mich. — General Motors is itching to free itself from government ownership, aiming for its initial public stock offering as soon as possible so the government can sell its stake and recoup its loans.
GM Chief Executive Ed Whitacre said Thursday that it is damaging GM's brands. "We don't like this label of government ownership," he said at the Center for Automotive Research's annual industry conference here. "People in GM are embarrassed by that. You lose your reputation and it's hard to get back."
Consumers may not be as turned off by the situation as Whitacre thinks, says Karl Brauer, senior analyst at Edmunds.com. He says a segment of the population is unhappy about the bailout. But others either don't care or favored it. "There's a strong number, maybe not an equal number, of people who are very much fans of GM who were not happy about the idea that the company could go out of business," he says. "They were happy to see it get saved."
The government converted its GM bailout loans to a 61% equity stake in the bankruptcy reorganization. When GM becomes a public company again through the IPO, the U.S. can sell its shares and recoup the money.
Steve Girsky, GM's vice chairman, wouldn't put a target date on an IPO.
"There are factors that go into this, one of which is our performance, the other is the market performance — one of which we control, the other of which we don't," he said, but added, "We want the government out, period. We don't want to be known as 'Government Motors.' "
The carmaker will post second-quarter earnings some time next week, and Whitacre promised solid results. GM posted $865 million in first-quarter net income in May.
But responding to speculation that GM also would file for the IPO then, Whitacre said GM isn't ready.
GM must file an S-1 form with the Securities and Exchange Commission, a filing that may be as big as a phonebook. It typically then takes several weeks to gain SEC approval, meaning GM must file soon if it wants its IPO before the Nov. 2 elections, though Whitacre says politics are not a factor.
Some worry that GM is rushing. Brian Krasicky, a partner at restructuring firm O'Keefe and Associates, said two or three solid quarters may not convince IPO investors: "If shares sell low, then it exposes the market's perception of GM's success story as being premature or weak."
GM Chief Executive Ed Whitacre said Thursday that it is damaging GM's brands. "We don't like this label of government ownership," he said at the Center for Automotive Research's annual industry conference here. "People in GM are embarrassed by that. You lose your reputation and it's hard to get back."
Consumers may not be as turned off by the situation as Whitacre thinks, says Karl Brauer, senior analyst at Edmunds.com. He says a segment of the population is unhappy about the bailout. But others either don't care or favored it. "There's a strong number, maybe not an equal number, of people who are very much fans of GM who were not happy about the idea that the company could go out of business," he says. "They were happy to see it get saved."
The government converted its GM bailout loans to a 61% equity stake in the bankruptcy reorganization. When GM becomes a public company again through the IPO, the U.S. can sell its shares and recoup the money.
Steve Girsky, GM's vice chairman, wouldn't put a target date on an IPO.
"There are factors that go into this, one of which is our performance, the other is the market performance — one of which we control, the other of which we don't," he said, but added, "We want the government out, period. We don't want to be known as 'Government Motors.' "
The carmaker will post second-quarter earnings some time next week, and Whitacre promised solid results. GM posted $865 million in first-quarter net income in May.
But responding to speculation that GM also would file for the IPO then, Whitacre said GM isn't ready.
GM must file an S-1 form with the Securities and Exchange Commission, a filing that may be as big as a phonebook. It typically then takes several weeks to gain SEC approval, meaning GM must file soon if it wants its IPO before the Nov. 2 elections, though Whitacre says politics are not a factor.
Some worry that GM is rushing. Brian Krasicky, a partner at restructuring firm O'Keefe and Associates, said two or three solid quarters may not convince IPO investors: "If shares sell low, then it exposes the market's perception of GM's success story as being premature or weak."
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