It’s been a busy day over at the New York Stock Exchange. GM’s initial public offering (IPO) had its stock priced $33 but it opened well over that at $35.40. As I type this, the latest trade was $35.18.
Detroit Free Press editorial cartoonist Mike Thompson perhaps put it best:
Something tells me that that a whole lot of anti-auto bailout politicians and think tank types who get paid to opine that government can’t do anything right called in sick today. Having berated the bailout from the start and desperately spun every bit of positive news about General Motors and Chrysler in recent months, even these folk would have a hard time casting today’s news coming out of Detroit in a negative light.
Folks at the US Treasury are pretty happy about the trading price, too:
General Motors’ stock opened at $35 at 9:36 a.m. on the NYSE, above the $33 price of the initial public offering. The price spiked to $35.99, fell to $34.65 and has since hovered in the $35-range. The U.S. Treasury is hoping the stock price doesn’t rise too much on the first day so it can avoid complaints that it should have asked more for its shares.
GM officials, unlike their counterparts in the banking industry, are openly thanking US taxpayers for what they have accomplished:
GM North American chief Mark Reuss called it an emotional day, saying he was proud to work for GM and thanking taxpayers for giving GM “a second chance.”
“Today is a day we begin reinventing the soul of the company and who we are and what we stand for,” Reuss told The Detroit News.
Remember what the bankers told the US taxpayers after we bailed their asses out of the fiasco they created? Here’s what:
Think we should have let them fail despite this end result? The Center for Automotive Research disagrees:
Accountants, journalists and politicians are frantically calculating whether taxpayers will recover the $80 billion they invested in the turnaround of General Motors and Chrysler.
Was it worth it?
Wednesday, the Ann Arbor-based Center for Automotive Research issued a study that says most likely yes.
The upshot: doing nothing would have triggered an economic apocalypse.
Kristin Dziczek, who led the study, said multiplying stock prices by number of shares misses a key point.
More than 1.4 million jobs, most of them at suppliers, service and other vendors, would have been lost had the two companies been liquidated. In reality, About 193,100 jobs tied to GM and Chrysler were lost last year. Another 171,200 are being lost this year.
“We’re weighing it against what would have happened if the government had not intervened,” Dziczek said.
The total outlay was $80 billion. GM, Chrysler and Chrysler Financial have paid back $13.4 billion in principal, according to the Treasury Department.
The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.
Remember, Chrysler’s shares won’t be sold until the second half of 2011. The $11 billion or more GM raises today will be an important first step.
Because the IPO today ended up selling even more stocks than was originally forecast, the US Government’s share fell from 61% ownership of GM to 33%.
In other words: Good-bye Government Motors, hello GENERAL Motors.
By Mike Thompson for the Detroit Free Press
Here are the president’s comments this afternoon on the GM recovery:
UPDATE: Yesterday was a day where Michigan was abuzz with GM. After learning a couple days ago that the Volt had been named Motor Trend’s Car of the Year, it beat out Nissan’s all-electric Leaf to be named the Green Car Journal‘s Green Car of the Year.
Here’s another thing we learned and this one was buried in a Detroit Free Press article:
Thursday wasn’t all play and no work. Chevrolet announced it would spend $40million of its marketing budget over the next three to five years toward community projects meant to reduce carbon dioxide emissions.
The project, which Chevy will advertise with an ad campaign that launches Sunday, should reduce carbon dioxide emissions by 8 million metric tons. That’s the equivalent of the amount Chevy estimates will be emitted by the end of 2011 by the 1.9 million vehicles it plans to sell in that time period.
Projects could include planting trees, funding wind farms or weatherizing to help schools save energy and money.
GM is trying to show “we’re not the company that we were before,” U.S. marketing chief Joel Ewanick said.
I, for one, am VERY pleased to see them taking these steps.
In addition to thanking US taxpayers yesterday, GM CEO, Daniel Akerson, also thanked the employees of GM:
General Motors Co. CEO Daniel Akerson arrived at the Renaissance Center on Thursday evening to the applause and cheers of several hundred employees gathered in the lobby and balconies of the GM headquarters building to celebrate its stock launch.
He wanted to deliver his personal thanks to the workers for helping the company “achieve the impossible dream” of traveling from bankruptcy to the New York Stock Exchange in less than a year and a half.
“The resiliency and character of the employees of this company is what has brought General Motors to where it is today,” Akerson said. “Thanks to your hard work and commitment, it feels like a new day has dawned for the new General Motors.”
And finally, have a look at this video, submitted in the comments of the Daily Kos version of this blog entry by dupage leo. If the Obama campaign doesn’t run ads exactly like this starting in 2012, they are fools.
I’m just sayin’…