Finally, "General" Motors Once Again

Thursday, November 18, 2010, was a big day for the entity formally known as “Government Motors.” GM went public. It is again being traded on Wall Street and it made history once again. This IPO offering was the biggest in our nation’s history. The initial price offering of $33 dollar per share went up immediately upon the opening of the stock market to $35 dollars per share. The federal government was the biggest seller, selling off 358 million shares and netting a tidy profit of $11.8 billion dollars, a little over 20% of the $50 billion that was given to GM to prevent the bankruptcy that happened anyway. The government plans to sell its remaining 500 million shares over the next two years. This opening offering also reduced the federal government’s share in GM from 61% to 36%, effectively taking away its power over GM, at least on paper.

This doesn’t mean that the power in GM left the U.S. Over 90%of the stocks were purchased by American investors. But not by “the little guy.” Many personal investors attempted to purchase GM stock through brokers on an individual basis and were shut out by larger backers and banks. GM also reserved 5% of the offered stock for purchase by employees but required a minimum purchase of $1000. Apparently, the company did not plan to be traded by small time investors. But that didn’t affect the success of the sale. GM stock may have netted a total of $23 billion, when the preferred stock figures are added to the volume traded on the stock market Thursday.

This is great news for current GM employees but means little for the thousands that lost their jobs with GM. The end of the year also marks a closing for the former employees of the Moraine Assembly plant. Their benefits received from GM will end at the end of the year, including medical insurance. The Dayton area unemployment is still well above the national average and, as many of these former GM workers move to find jobs that will support their families, it is expected that this area will see an increase in financial troubles. While former Moraine Assembly workers will not see the benefit of this new page in GM’s history, hopefully it will mean good things for one of the largest employers in America.