GM IPO a major milestone for U.S. auto industry: Obama
Friday, 19 November 2010, 00:46 IST
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Washington: U.S. President Barack Obama has termed auto-maker General Motors' $23.1 billion initial public offer that concluded on Wednesday a major milestone for the American auto industry, capping a remarkable two-year turnaround for the company. GM's IPO was the largest stake sale ever in the U.S.. "General Motors' initial public offering (IPO) marks a major milestone in the turnaround of not just an iconic company, but the entire American auto industry," Obama said in a statement. "Through the IPO, the government will cut its stake in GM by nearly half, continuing our disciplined commitment to exit this investment while protecting the American taxpayer," he said. "Supporting the American auto industry required tough decisions and shared sacrifices, but it helped save jobs, rescue an industry at the heart of America's manufacturing sector and make it more competitive for the future," Obama said. "The proceeds will help pay back the U.S. government for the $49.5 billion it spent on its controversial rescue of GM, which has gone from losing billions of dollars a year to making $4.07 billion so far in 2010," reported The Wall Street Journal. "The Detroit company, after eliminating half its eight brands, slashing its debt and trimming its work force in bankruptcy, has been gaining U.S. market share with strong-sellers such as the Chevrolet Equinox and Buick LaCrosse after years of seeing customers slip away to foreign-based rivals," it said. "Stripped of laggard brands, costly healthcare benefits and bulging debt, the shiny new GM has attracted investors that range from former employees to Chinese auto giant SAIC to big pension funds that only recently lost money on the old GM," The Washington Post wrote. "The GM offering has become a referendum not only on the company, but also on the economy," The Washington Post report said. Despite jitters over the past week about the Federal Reserve's monetary policy, Ireland's debt crisis and weak demand for goods, many investors said they are confident that American car sales will continue to pick up and that GM will benefit. "American taxpayers' ownership of General Motors was halved on Wednesday and billions of dollars in bailout money was returned to the federal government as a result of the nation's largest initial stock offering ever," The New York Times reported.
Source: PTI
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