Head of autos task force reflects on GM's comeback
(Photo Credit: Melina Mara/The Washington Post)
Ron Bloom's voice brimmed with satisfaction on Friday, a day after General Motors made a largely successful return to the stock market following a government-imposed bankruptcy and restructuring.
"It was a good day for General Motors; it was a good day for the country," the senior Treasury adviser and point man for President Obama's auto task force said in an interview, as he traveled to his Pennsylvania home. "This is a very, very important milestone."
All told, the company raised $20.1 billion through its public offering, making it the largest in U.S. history. In addition, the Treasury sold nearly half of its 61 percent stake in the company, raising at least $11.8 billion and likely more.
Bloom spoke Friday about the balancing act he and his colleagues tried to maintain through iconic automaker's initial public offering. On one hand, they felt compelled to get the best price possible for the shares in order to recover taxpayer money. But perhaps the more fundamental goal this week was proving that the administration, despite its integral role in GM's bankruptcy and restructuring over the past 17 months, truly wants out of the car-making business.
"It took the issue of 'Government Motors' off the table," Bloom said. "We acted strongly and affirmatively to, I believe, wipe that issue off the table. That thing is dead and buried as of the close of business yesterday."
The government must wait six months before it can sell any more GM stock. While officials can choose when to divest the remaining stake - after all, the company's stock price ultimately will return how much money taxpayers win or lose on the investment - Bloom said the principle will remain the same as in the past: As soon as practicable.
"We will resolutely move to the exit," he said. "It will be a good day when we own no shares of General Motors."
Even if taxpayers ultimately take a loss on the GM investment, administration officials and other supporters noted this week that the U.S. auto industry has added more than 77,000 jobs since GM and Chrysler emerged from bankruptcy protection, vehicle exports are up well beyond 2009 levels, and the nation's Big Three car companies posted operating profits for the first three quarters of this year.
Meanwhile, Bloom acknowledged that Chrysler "still has a long way to go" before it could follow in GM's footsteps. But he argued that the company has exceeded expectations thus far, and the government's stake in Chrysler is much smaller than its share of GM.
Bloom and others who have labored for months on the auto bailouts know that the story isn't finished, that the work is far from over. But at the end of a week that brought good news after such a long slog, they allowed themselves a few moments to celebrate GM's reemergence.
| November 19, 2010; 7:15 PM ET
Categories: Auto industry
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