As GM goes, so goes the nation.
How many times have we heard that pronouncement in one form or another throughout the many, many years? I know I’ve invoked those words myself in this column space. The sentence once meant power and riches, until it took U.S. taxpayers’ hard-earned money to hand over nearly $50 billion to the automaker in 2008 and 2009 in order to put it on life support. Of course, the economy, too, began its nose-dive back then. As GM goes…
In mid-November the “new” GM went public selling $23.1 billion in shares. Too bad most of us little guys couldn’t buy any of that $35 IPO (initial public offering) stock. The banks and brokerages handling the new stock don’t make much off of those of us who might want, be able to afford, maybe a hundred or two hundred shares. Some folks, the haves, will make a bundle – at least short-term, long-term being what would be the best for all of us, though.
The IPO was long awaited, anticipated and quickly scooped up. Everyday, working-stiff, tax-paying, tax-protesting Americans ought to feel good that the “new” GM raked in billions from that IPO. Now the company can pay back even more of what we gave “old” GM to keep it from going belly-up; initially, that partial payback should equal $13.5 billion or more.
And if the Detroit automaker indeed survives and thrives, George W. Bush will have at least one grand legacy to pin up from the final weeks of his presidency, as he authorized the saving of GM right before he left office. And if GM does exceptionally well, the additional changes foisted upon it by Barack Obama will give his presidency a boost it hasn’t had since the 2008 election. GM could pay back the rest to us/U.S. before the 2012 election. That would be nice, maybe even show that GM is the phoenix risen from its own ashes.
November vehicle sales (the latest info at press time), like previous months, showed steady growth in the auto industry. In fact, auto sales were touted just weeks ago as the driving force of the steadily improving economy; one major prognosticator, IHS, says that because of pent-up demand, consumer confidence and credit becoming more available, a big jump in U.S. vehicle sales will come next year, even as sales inch up this year. So maybe some belated thanks will go to presidents Obama and Bush for bailing out GM.
The Detroit 3 have been retooling factories and hiring workers, but nationwide unemployment remains naggingly well above 9%, so, pent-up demand aside, who’s really buying? Banks supposedly are lending again, including subprime car loans to those who earlier wouldn’t qualify – aren’t we still trying to dig out from the subprime mortgage debacle? Is this fueling sales on the consumer side?
And for all that the “new” GM seems to be – and it certainly became the darling of the stock-buying business world and an awful lot of the media – I’ve the uneasy feeling of a skeptic needling me over all the wonderful news, especially the hoopla over the yet-to-be-put-to-the-test Volt electric. I want the car to succeed; wish I could afford one.
Nothing against GM, mind you. The company is doing what any company, small, large or too-big-to-fail, would do to win over customers. It’s even made the Volt the darling of the American media even before it went on sale – already it has been christened Car of the Year by Motor Trend magazine and 2011 Green Car of the Year by Green Car Journal – and the Volt hadn’t had to do anything but to show up to be oohed and ahhed.
GM’s reputation – old GM’s reputation – as a quality manufacturer has long been eclipsed by Ford, Toyota, Honda, Nissan, Subaru, even upstart Hyundai. Now, though, loud and many accolades have been handed it ahead of its new vehicles’ on-the-road records.
I’m hoping the automaker’s now four-brand line indeed proves out the claims and early praise, because I want GM to succeed. I want my tax money back.