During last week’s conference call, GM Chairman and CEO Ed Whitacre announced that GM’s next major milestone is an initial public offering (IPO). Whitacre didn’t announce a time frame, saying that the move will allow the government “to divest its equity in an orderly and timely manner.”
Whitacre went on to say:
The timing of the IPO is contingent on a number of factors that need to be aligned as we go forward or before we go forward with that. We want to initiate this as soon as possible, but we’re only going to do it when the market condition and internal conditions are right.
Reading into Big Ed’s statement, it seems that The General will first align its internal operations as a privately-owned entity so that – when it’s time for the IPO – it’s a lean, mean, (profitable) vehicle-selling machine. After all, it seems easier to make worldwide operational changes (like factory closures) as a private company. We expect the federal government to divest itself of GM stock in a staggered fashion, as a singular offering may flood the market and create more supply than demand.
During the same press event, Whitacre announced his permanent appointment to the position of GM CEO as well as the automaker’s plans to repay U.S. and Canadian government loans by June 2010.
Stay tuned as it happens! In the mean time, would you buy shares in The New GM once the stocks are publicly available? Let us know in the poll below the break!
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Come April, the U.S. Treasury will end an assistance program to automotive suppliers. Last March, the government used $5 billion to smooth credit transactions across the auto industry. Neil Barofsky, a special government inspector supervising the financial and auto bailout money, reported to Congress that the arrangement is “scheduled to terminate in April.” Since its inception last year, the program has been reduced from $5 billion to $3.5 billion, including $1 billion for Chrysler’s suppliers and $2.5 billion for those of The General. 
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