In August of this year the New GM filed the proper ISO paperwork to begin to issue publicly traded shares and again become a public company. GM will offer some preferred stock and standard common stock, which initially will not pay a dividend. Additionally, the preferred stock, which will pay a small dividend, will be converted to common stock before 2013. The U.S. Treasury will own 61 % of the common stock, an amount equal to that of its share of the current private company. The remainder of the common stock will be divided between the Canadian Government, the UAW, and GM’s former bond holders. The preferred stock will be issued as a way to raise revenue and continue to repay the $50 billion dollar government loans and run the new company.
While the new GM has made some strides toward renewing the American people’s faith in the company with new products like the Chevy Cruze, the new company has been plagued with management issues that can make the new stock unattractive to prospective investors. The new GM has had four different CEO’s since March of 2009. When combined with a still shaky stock market, some experts wonder if GM stock can produce the results that the new company and the federal government hope to see. On the positive side, overseas sales can keep the struggling American company afloat. The “Heartbeat of America” may soon become the “Heartbeat of China.” In the first half of 2010, GM sold more cars in China than it did here at home. China is now accounting for 25% of GM’s global sales.
The new GM’s most significant improvement is the launch of the Chevy Cruze. Made in America, the Cruze is GM’s new competitor in the compact car genre. While its starting price of $16,995 is higher than its foreign competition, it does include many amenities like power locks and air-conditioning that are not standard on most compact cars. Another selling point for American buyers is that it made here in the U.S., while most other compacts are made overseas.
While these strides are great for GM as a whole, what does it mean for the Dayton area? Not much. The government-sponsored bankruptcy agreement is requiring the old GM, known as the Motors Liquidation Company, to sell off many of GM closed plants. The problem with these properties is that many are environmental issues that must be corrected before they can be sold. It is unclear if the 19 properties in Montgomery County fall into this category but GM is using $836 million of the $1.17 billion loan from the Treasury Department to begin clean-up of over 90 plants in 14 different states. Since this work should begin by early 2011, Daytonians will have to wait and see if GM will be able to sell the properties it owns here.
To read the GM IPO filing follow this link:
To read the GM IPO filing follow this link:
I remember when they built the paint shop. Gosh, it seems like yesterday. I drive by there frequently and am saddened by the steel and concrete that remains.
ReplyDeleteI'm going to "humanize" this company...I don't think I'll ever be able to forgive them. The lives and communities that were ruined because of this company. I don't anticipate ever giving them my business again.
I will be watching to see if they pay back that loan though!