• May 31, 2010
The government of the United States may be actively avoiding any direct involvement in the day-to-day management of General Motors, but that doesn't mean it won't have a say when the time comes for the automaker to go public again. According to The Detroit News, the U.S. Department of the Treasury has hired investment bank Lazard Frères & Co. to provide it with advice on the initial public offering process.

While both General Motors and the Treasury would obviously both like the latter to unload the majority stake it owns in the automaker as soon as possible, that process needs to be done carefully. Political and public perception considerations point to an early IPO, but that may not be the smartest thing to do from a business perspective. Selling before its clear that GM's recovery is well underway could lead to getting too low a share price. The bank will reportedly also look at other options for disposing of the 61 percent shareholding.

According to the report, Lazard Frères & Co. will get paid $500,000 a month for the first year and $250,000 per month after that if the sale hasn't yet been completed. Estimates from various sources are that the treasury will face losses of $25-30 billion on the bailouts of GM, Chrysler and GMAC.


[Source: The Detroit News | Image: Stan Honda/Getty]


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  • 19 Comments
      • 4 Years Ago
      That's a decent arrangement. No big banks, and no percentage-based underwriting "fee". And considering the decent performance of GM lately, the firm should not have problem attracting equity buyers.

      This should appease the tax payers.
        • 4 Years Ago
        Lazard is a relatively big bank..... not a BB, but it's king of the boutiques.
        • 4 Years Ago
        Appease the taxpayers? No.

        Please see the 10th amendment. After reading it, see article I, section 8.

        Ain't nuthin' in there 'bout bailin' out GM (or anybody else).

        It was unconstitutional. That means illegal. As in wrong. As in a violation of the oath of office for everyone involved in it on the government side.

        Nothing will appease the taxpayer on this. Nothing.

        Throw them all out. You can help initiate the first wave of departures this November.
        • 4 Years Ago
        One would hope.
      • 4 Years Ago
      An IPO any time this year does not seem prudent. The EU will take time to recover, and they affect the jittery market as much as the US does at this point.

      I'd like to see it sometime next year, maybe after some concept news on a Caddy A-series.
      • 4 Years Ago
      I am awaiting the GM IPO, but in all honesty, they are better off pushing it back as far as they reasonably can - the market is WAY the hell too unstable lately. If they happen to schedule it on a bad week, they could really cut the amount of money they get out of this IPO.
      • 4 Years Ago
      You mean americans might finally get a chance to own GM?!??!
      • 4 Years Ago
      I'm no economist, but it seems like $30 billion is a fair price if it results in those companies and those regions becoming economically stable. Economically stable is another word for continued receipt of tax revenue from those areas, as well as millions of dollars saved from not having to pay out unemployment to thousands of workers.

      No one could have predicted things were going to go this well, and we aren't out of the water yet, but it appears that the gamble to aid them is going to pay off, at least as far as GM is concerned. I think the investment into Chrysler is going to take longer to show fruits, if it ever does.
        • 4 Years Ago
        Yes its unfortunate how the government keeps aiding and abetting corporate corruption and destruction. I wish we would have needed to bail out the auto industry and instead spent $30 billion investing in jobs in a new industry (like high speed rail, or fuel cell technology). As it is, the question you have to ask yourself after this kind of government interaction is, are we better off then we would have been if we had done nothing?

        I think the answer is yes.
      • 4 Years Ago
      At a cost of $100,000 per job saved, what a bargain. Personally, I would have asked for the $100,000 as severance and looked for work elsewhere.
      • 4 Years Ago
      So, our money was forcibly taken from us and delivered to GM. Now they want to sell us the company. How is this any different than some thug stealing my watch and me having to buy it back from the place he pawned it? It isn't. Don't be stupid and "invest" in GM stock. Better yet, don't be a fool and buy one of their cars. Unless, of course, you want the whole sorry episode to repeat it self.

        • 4 Years Ago
        Your logic is awesome. How would buying their cars insure the "whole sorry episode to repeat itself" as in, they go bankrupt?

        Nobody is going to "force" you to buy any stock.
      • 4 Years Ago
      This a joke right. We the people have to pay someone 6 million the first years and 3 every yearr after that just for advice. This is just another example of the government spending out of control. They complain about excesive pay to top executive's and what are they doing. Talk about calling the kettle black.
      • 4 Years Ago
      Hope they don't hurry it up.
      • 4 Years Ago
      "Estimates from various sources are that the treasury will face losses of $25-30 billion on the bailouts of GM, Chrysler and GMAC."
      I'm curious why they lump in GM with Cerubus who was the the majority owner of Chrysler and GMAC.

      I'd like to see a breakdown and see which company or companies are truly losing the most tax dollars.
        • 4 Years Ago
        Because Wallstreet media is sympathitic to Wallstreet companies.

        Lumping Cerberus' losses in with the auto companies dramatically downplays federal money lost to Cerberus. And, making the Auto company bailout look bad helps Wallstreet's bailout look better in general.
        • 4 Years Ago
        Yeah, I don't where they get those estimates either because given recent numbers, those are WAY inflated. The US will lose money on Cerberus for sure but the others won't be bad.

        But overall, the loss of tax base resulting from GM, suppliers and all the other manufacturers in the US ceasing production at once (jobs that don't come back) would dwarf whatever was needed to maintain temporary liquidity. You have to be on some serious Fox News pills to not see how devastating that would have been to America.
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