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

Login or Create new account to add a comment!

Recommended

Mercedes-Benz has revealed that in 2017, its series 124 coupé will be celebrating its 30th anniversary. While this itself is a significant event, it will also mean that this model...
by - January 21, 2017
BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 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