- 11/18/10 05:57 PM ET
President Obama on Thursday hailed the initial public offering by General Motors as proof that his economic policies are starting to “pay off.”
The retooled automaker, which the Obama administration rescued with $50 billion in aid, in a government supervised bankruptcy proceeding last year, made a successful return to the New York Stock Exchange with an initial public offering that saw its stock surge before the closing bell.
The company’s stock was offered at an initial price of $33 per share and closed at $34.19, up 3.6m percent for the day.
“We are finally beginning to see some of these tough decisions that we made in the midst of crisis begin to pay off,” Obama said Thursday at the White House.
The initial offering was much higher than analysts had expected, and has spurred new hopes that the government, which owns 500 million shares in GM, could finalize its exit by the end of the next year.
Obama hopes to seize on the positive IPO by making his first domestic trip since the election to visit a plant that manufactures components for hybrid vehicles. Obama, along with Vice President Biden, will visit the Kokomo, Ind. plant on Tuesday.
“Just as I had faith in the ability of our automakers to persevere and succeed, I have faith in the American people to persevere and succeed,” Obama said Thursday.
But there is not guarantee that General Motors will be able to make a complete comeback from a painful bankruptcy and government intervention that saddled the company with a battered reputation as “government motors.”
Similarly, it is unclear whether Obama’s intervention with the automakers will help him in the 2012 presidential race, where several states in the industrial heartland will be critical to his reelection. In this year’s midterm election, Democrats lost scores of seats in Ohio, Pennsylvania, Illinois, Indiana and Michigan, which all have auto plants.
Republican leaders who have repeatedly criticized Obama’s efforts to help the automakers did not back down Thursday from their criticism.
“The government's reaction to General Motors and the bailout from the government I think could have been handled in a more orderly way by a bankruptcy judge without the heavy hand of the Federal Government in the midst of it,” said incoming House Speaker John Boehner (R-Ohio).
He said common taxpayers burdened with government debt have been hurt by the administration’s actions.
“When you look at the people who lost because of the government's actions, we're talking about tens of thousands of Americans who were punished as a result of the government's actions,” he said.
The administration sees the auto bailouts as one of the most tangible examples of success stemming from its action to boost the economy during the last two years.
U.S. auto companies, Obama said Thursday, are “once again on the rise.” He pointed to the operating profits both Chrysler and GM have managed in recent quarters, and applauded Ford’s resurgence, too. Ford is the only one of the automakers that did not receive a government bailout.
Some Republicans said that while they still opposed the terms of the bailout -- in particular, the GOP had opposed a deal wiping out GM's obligation to many secured creditors -- they were hopeful for the company.
“Hopefully, this will be a complete success in the end, and if it is, that's good for GM,” Sen. Orrin Hatch (R-Utah) said Wednesday on MSNBC. “It's probably good for those who are workers at GM, and, hopefully, it's good for our country as well.”
But other GOP figures continued to decry the government action. The news about GM, said Texas Gov. Rick Perry (R) on Thursday, is “probably a good exhibit of why the government should not be involved in the private sector.”
The last time GM made as much news as their IPO has it was on the brink of destruction, at a point where many didn't think the situation was salvagable. Today's news was considerably better, as the President explained this afternoon:
The retooled automaker, which the Obama administration rescued with $50 billion in aid, in a government supervised bankruptcy proceeding last year, made a successful return to the New York Stock Exchange with an initial public offering that saw its stock surge before the closing bell.
The company’s stock was offered at an initial price of $33 per share and closed at $34.19, up 3.6m percent for the day.
“We are finally beginning to see some of these tough decisions that we made in the midst of crisis begin to pay off,” Obama said Thursday at the White House.
The initial offering was much higher than analysts had expected, and has spurred new hopes that the government, which owns 500 million shares in GM, could finalize its exit by the end of the next year.
Obama hopes to seize on the positive IPO by making his first domestic trip since the election to visit a plant that manufactures components for hybrid vehicles. Obama, along with Vice President Biden, will visit the Kokomo, Ind. plant on Tuesday.
“Just as I had faith in the ability of our automakers to persevere and succeed, I have faith in the American people to persevere and succeed,” Obama said Thursday.
But there is not guarantee that General Motors will be able to make a complete comeback from a painful bankruptcy and government intervention that saddled the company with a battered reputation as “government motors.”
Similarly, it is unclear whether Obama’s intervention with the automakers will help him in the 2012 presidential race, where several states in the industrial heartland will be critical to his reelection. In this year’s midterm election, Democrats lost scores of seats in Ohio, Pennsylvania, Illinois, Indiana and Michigan, which all have auto plants.
Republican leaders who have repeatedly criticized Obama’s efforts to help the automakers did not back down Thursday from their criticism.
“The government's reaction to General Motors and the bailout from the government I think could have been handled in a more orderly way by a bankruptcy judge without the heavy hand of the Federal Government in the midst of it,” said incoming House Speaker John Boehner (R-Ohio).
He said common taxpayers burdened with government debt have been hurt by the administration’s actions.
“When you look at the people who lost because of the government's actions, we're talking about tens of thousands of Americans who were punished as a result of the government's actions,” he said.
The administration sees the auto bailouts as one of the most tangible examples of success stemming from its action to boost the economy during the last two years.
U.S. auto companies, Obama said Thursday, are “once again on the rise.” He pointed to the operating profits both Chrysler and GM have managed in recent quarters, and applauded Ford’s resurgence, too. Ford is the only one of the automakers that did not receive a government bailout.
Some Republicans said that while they still opposed the terms of the bailout -- in particular, the GOP had opposed a deal wiping out GM's obligation to many secured creditors -- they were hopeful for the company.
“Hopefully, this will be a complete success in the end, and if it is, that's good for GM,” Sen. Orrin Hatch (R-Utah) said Wednesday on MSNBC. “It's probably good for those who are workers at GM, and, hopefully, it's good for our country as well.”
But other GOP figures continued to decry the government action. The news about GM, said Texas Gov. Rick Perry (R) on Thursday, is “probably a good exhibit of why the government should not be involved in the private sector.”
President Obama on GM: "One of the Toughest Tales" Becoming a "Success Story"
Posted by on November 18, 2010 at 5:22 PM EST
The last time GM made as much news as their IPO has it was on the brink of destruction, at a point where many didn't think the situation was salvagable. Today's news was considerably better, as the President explained this afternoon:
Today, one of the toughest tales of the recession took another big step towards becoming a success story.By contrast, independent estimates have said that a million or more American jobs would have been lost had the government not taken the tough steps it did, dealing another brutal blow to the larger economy when it was teetering on the bring of complete disaster...
General Motors relaunched itself as a public company, cutting the government’s stake in the company by nearly half. What’s more, American taxpayers are now positioned to recover more than my administration invested in GM.
And that’s a very good thing. Last year, we told GM’s management and workers that if they made the tough decisions necessary to make themselves more competitive in the 21st century -- decisions requiring real leadership, fresh thinking and also some shared sacrifice –- then we would stand by them. And because they did, the American auto industry -– an industry that’s been the proud symbol of America’s manufacturing might for a century; an industry that helped to build our middle class -– is once again on the rise.
Our automakers are in the midst of their strongest period of job growth in more than a decade. Since GM and Chrysler emerged from bankruptcy, the industry has created more than 75,000 new jobs. For the first time in six years, Ford, GM and Chrysler are all operating at a profit. In fact, last week, GM announced its best quarter in over 11 years. And most importantly, American workers are back at the assembly line manufacturing the high-quality, fuel-efficient, American-made cars of tomorrow, capable of going toe to toe with any other manufacturer in the world.
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