GM's IPO: The Spiritual Rebirth of a Giant
In New York, it was clear by sunset that this was no ordinary trading day. The facade of the NYSE, which was normally covered in an oversize American flag since the Sept. 11, 2001 attacks, was now masked by a chrome-colored GM logo.
Although the exchange opens at 9:30, by 9:15 the floor post for General Motors was overcrowded with traders, that would normally be unobserved in this modern day of electronic trading. At 9:30 the opening bell sung, followed by the prolonged sound of a Chevrolet Camaro being operated at increased speeds. Executives crowded around CEO Dan Akerson and applauded, and cheers normally heard only during big stock rallies went up from the floor.
And a big stock rally it was, with prices per share shooting from $33 to almost 36. And as the stock rose, so did the climate on the trading floor, reports MSNBC.
"I think it's a buy," said DME Securities trader Alan Valdez's optimistic statement given to reporters. "Just a year ago the company was in bankruptcy. People thought they'd never sell cars again. So this is huge. What is great for GM is great for the country. It's great for Main Street."
The White House emphasized the importance of breaking away from the automotive industry, while taking credit for a taxpayer bailout that helped save the industry and tens of thousands of jobs. GM employs 209,000 people in the United States, about 115,000 fewer than it did in 2004.
Just before the stock offering, Treasury Secretary Timothy Geithner called Akerson to congratulate him and other GM executives for a job well done, according to MSNBC reporters. On Thursday afternoon President Barack Obama gave a statement from his White House briefing room, saying that "an industry that helped to build our middle class is once again on the rise."
"These last two years haven't been easy on anybody," the president said. "They haven't been without pain or sacrifice, as the tough restructuring of GM reminds us."
"We are finally beginning to see some of these tough decisions that we made in the midst of crisis pay off," he added, apparently speaking not just of the GM bailout but of other bailout and stimulus measures adopted during the worst of the economic meltdown.
Obama commented that the stock offering had set back the government stake to 33 percent from 61 percent. For taxpayers to break even on the $50 billion federal bailout of GM, the government needs to sell the rest of its shares at an average price of $53, as reported by the previously mentioned publication.
It was a moment of pride for Detroit, despite the dark period it went through since the beginning of the downfall of the US auto industry in the late 2000s. People cannot stress enough that the harm has already been done and Michigan's unemployment rate only recently fell beneath 13 percent, compared to a national rate of under 10 percent.
"They've already been affected by the plant closings, the layoffs. It's been devastating," said Tim Jenkins in an interview with the aforementioned source, a mortgage banker who lives in the suburb of Grosse Pointe. He said he was too close to retirement to invest in GM stock, which he worried would be volatile for a while.
At the GM headquarters, several hundred workers cheered and welcomed Akerson at a party celebrating GM's return, as reported by the media. It was going about the time the stock market closed, with GM finishing the day at $34.19, up $1.19 from the offering price.
"Sixteen months ago, we were pretty much flat on our backs," the CEO said in a statement, "but we picked ourselves back up and got back in the game. We need to work hard to repay that confidence and trust that has been placed in us."