GM share sale shows revival of auto industry as economic pillar

Article by Anita Panait, on June 8, 2013

The auto industry was once considered a pillar of economic growth in the United States. But that changed in 2009 when the industry suffered a heavy financial blow and succumbed to a near-collapse, highlighted by the bankruptcy of General Motors and Chrysler Group. Recent events, however, signaled the revival of the local auto industry to once again become a pillar of US economic growth.

One of these events is the decision of the Obama administration to dispose more of its stake in General Motors Co. The US Treasury Department recently announced a plan to sell around 30 million GM shares, which consummation would reduce the federal government’s stake in the carmaker to less than 15 percent.

This event is further boosted by GM’s return to the Standard & Poor's 500 Index for the first time since its 2009 bankruptcy. GM investors and owners are set to be updated on the carmaker’s progress its annual shareholders meeting in Detroit on June 6, 2013.

George Magliano, senior economist at IHS Automotive, remarked to Bloomberg that the "auto industry is alive and well," noting that one of the leading industries in the recovery is the auto industry.

According to data from the Commerce Department, carmakers in the US accounted for 14 percent of the 2.1 percent average rate of growth for gross domestic product during the revival that commenced in the third quarter of 2009.

Carmakers are set to post to their best sales figures this year since 2013. GM, Ford and Chrysler all managed to increase their market share in the first five months of 2013, the first time in 18 years. The US federal government has poured around $80 billion to financially rescue the auto industry, over $63 billion of which were used on GM and Chrysler. According to a March 31, 2013 Treasury estimate, the effort will cost taxpayers $20.3 billion. [source: Bloomberg]

Topics: gm, shares

If you liked the article, share on:

Comments

Recommended

Kia is taking things a step further with the new Kia Stinger, which they first introduced at the 2017 Detroit Auto Show. With the specs given to us by the...
by - June 25, 2017
Earlier this week, Nissan revealed a teaser of the new 2018 LEAF’s interior, giving us an idea of what the electric vehicle has to offer. The company released a video...
by - June 25, 2017
The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries