With General Motors Co.'s return to the stock market, President Barack Obama said that this is proof that the US auto industry is recovering and will continue to do so as taxpayers seek to get their money back from a government bailout.
At the White House, Obama said that GM’s raising of over $20 billion from its IPO is “one of the toughest tales of the recession took another big step towards becoming a success story.”
Obama said that last year, the bailout for GM had added up to a $49.5 billion taxpayer bailout. The US Treasury is expected to get $13.6 billion from the IPO.
Bloomberg data show that for taxpayers to be fully repaid, the remaining shares held by the government have to be sold at an average of about $53 each to make back its total investment.
Meanwhile, GM gained 3.6% to $34.19, cutting an earlier surge of 9.1%. Obama also took the opportunity to defend the politically unpopular bailout of GM and Chrysler Group LLC. He said that if GM had failed to act, there would have been “economic chaos.”
He said that that there’s still a “lot of work to do to rebuild this economy.” He said that finally, GM has to see these difficult decisions that were made in the midst of a “pay off.”
He said taxpayers are “now positioned to recover more than my administration invested” in the company. The IPO is expected to lessen the government's stake to 37% from 61%. [via autonews - sub. required]