U.S. Car Czar Bloom Predicts GM IPO in Late 2010
Washington - The Obama administration's top auto adviser expects General Motors Co. to hold a stock offering by the end of 2010. But car czar Ron Bloom said Chrysler Group LLC's public offering is still farther away, reported The Detroit News.
In an interview this week, Bloom also reflected on why the administration succeeded in quickly putting GM and Chrysler into bankruptcy as part of an $80 billion auto industry bailout.
He said it is his view that "sometime in the back half of the year, probably more likely fourth (quarter) than third," GM hopefully will be able to make an initial public offering (IPO) of its stock. "The company has an obligation to us to make their best efforts to accomplish an IPO."
The government swapped most of its $50 billion loans for a 61 percent majority stake in GM, but has pledged to keep hands-off its equity. GM announced it would begin repaying its remaining $6.7 billion government loan with $1 billion quarterly payments starting Dec. 31.
"GM's early repayment is a good thing. The early signs are positive. That's obviously a good thing, but I don't want to overread it. Nobody's uncorking Champagne," Bloom said.
Chrysler's turnaround is farther off; the Auburn Hills automaker doesn't plan to hold a public offering until at least 2011. The government holds a 10 percent stake in Chrysler, which received $12 billion in government loans, and has turned over 20 percent and operational control to Fiat SpA's CEO Sergio Marchionne.
Bloom said he didn't dispute the timetable set by Marchionne for an IPO. "There is a long way to go between now and then, and many things can change," Bloom said.
GM has to convince investors it has made significant progress before it can start selling stock.
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