After years of hideous design, plastic body cladding, and generally questionable products, General Motors is back on the prowl with four new models for 2011 and a coveted Motor Trend Car of the Year award for its make-or-break model, the Chevy Volt. GM hasn’t been without its stumbles this past year, though, including a what-were-they-thinking memo urging dealers to drop “Chevy” for Chevrolet and a slip by chairman Ed Whitacre that could have botched the IPO timeline. But the new GM seems to have left most of its past transgressions behind and proceeded this week with its IPO, which was either the largest or second-largest IPO in U.S. history, depending on how you measure it. So how did the sale go?
- The Obama administration can breath a sign of relief, writes Clare Baldwin and Soyoung Kim for Reuters. The IPO “is good news for the Obama administration, which faced criticism for bailing out GM.” Over at Bloomberg, David Welch and Craig Trudell point out that the administration did well, but it needs to sell the rest at a higher price to break even. To recover the entire $49.5 billion investment, including the $13.4 billion George W. Bush committed, the Treasury needs to sell the rest at $53.07.
- Taxpayers see some returns, too, writes Todd Lassa at Motor Trend. The government unloaded just over 358 million shares at $33 a share, which equates to $11.8 billion. That’s still a far cry from the $49.5 billion the government pumped into the company last year, but the sale leaves the Treasury with a 33 percent stake in the company. There’s hope yet that we could break even.
- UAW retirees will keep their health benefits longer, says Matthew Dolan and Phred Dvorak at the Wall Street Journal. VEBA, the independent trust tasked with supporting benefits for retired UAW workers, sold nearly 90 million shares worth a total of $2.9 billion. Auto makers originally paid lump sums into the trust to relieve themselves of pension burdens, but when GM and Chrysler entered bankruptcy, the trust received an equity stake instead. VEBA still holds 173.5 million shares in the new GM.
- Speaking of Chrysler, they’re not doing so hot, notes Bill Vlasic and Nick Bunkley of the New York Times. While the flurry of press around GM’s IPO has driven Ford’s stock higher (it’s slew of new models hasn’t hurt, either), Chrysler appears to be falling behind. “Chrysler’s sales in the United States are less than half what they were five years ago and its product lineup is still in the early stages of an overhaul,” they point out. CEO Sergio Marchionne is fighting years of stagnant product development, but small cars designed for his other company, Fiat, may be the American marque’s white knight.
- Oh yeah, GM did pretty well, too, says David Welch, Lee Spears, and Craig Trudell at Bloomberg. If the company can sell its total allotment of initial shares, it will pull in $23.1 billion, making it the single largest IPO in history.