Back when I first turned my attention to writing about state issues, I remember thinking, "I hope I can stay away from the auto industry". Ha ha ha! That was a good one.
And here we are today, two years through the fire and rising from the ashes, a shiny new GM is born. Kids, this has been one helluva ride.
General Motors is returning to life as a public company Thursday with a stock offering worth potentially $23 billion, ending the government's role as majority shareholder and closing a remarkable chapter in American corporate history.
The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.
The IPO could wind up as the largest in history. GM set a price of $33 per common share on Wednesday, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they'll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.
Together, the sale of common and preferred stock will bring the deal's value to a record $23.2 billion.
As of now, a phenomenal success story - but it came at such a price. The loss of thousands and thousands of jobs across the Midwest doomed the Democrats in the elections as the economy is just now starting to recover, and the shell-shocked and economically battered voters turned their states over to the people who would have let the industry die in the first place. Hard to figure. People looking back at this time in history will probably scratch their heads and go "Huh?", and anyone who lived it will shrug their shoulders and say, "Timing".
As of now, I have a very real fear that the Republicans will try and tank the economy so they can blame Obama in 2012. It will be Michigan Writ Large in Congress starting in January, a bit more complex of course, but already the signs are starting that the "Just Say No" crowd has been rewarded for their obstruction and will only accelerate their efforts. No more aid to states that are still bleeding, Republican governors vowing massive cuts this coming budget year, no more extensions of unemployment to millions that will now turn to those states and find little to help them, this so-called "austerity movement" threatens not only a fragile US economy, but a fragile world economy as well.
What will that do to auto sales? Who knows. One can only hope we have enough forward momentum to rise above those who seek to destroy so they can regain power.
For today though, smile at this success, and wish GM all the best. The lessons learned from this difficult time should serve them well.
Ren Cen, Summer 2008