Autoblog

Fiat pondering swallowing rest of Chrysler, US IPO

Jonathon Ramsey — Wed, 24 Apr 2013 16:01:00 EST

Filed under: Government/Legal, Chrysler, Earnings/Financials, UAW/Unions, Fiat

At the moment, Fiat is in court with the United Auto Workers, waiting for the justice system to provide some guidance on a fair price for 41.5-percent of Chrysler it doesn't own. Fiat owns 58.5 percent of the company and wishes to buy the remainder, which is owned by the union's VEBA retiree trust, but the Italian company and the UAW are on different sides of the galaxy when it comes to assigning a fair price to that outstanding stake.

Naturally, Fiat CEO Sergio Marchionne is considering his options. A new report in the The Wall Street Journal says one of the scenarios being considered now is - depending on the outcome of the court case - to purchase the 41.5-percent stake and then issue an IPO to recoup some of the cost. About two months ago, Marchionne put the odds of an IPO for a wholly combined Fiat/Chrysler at 50 percent. Even with the WSJ report, it's not clear if those odds have changed.

The current company structure leaves a lot of options as to how a potential IPO could be issued, but it's said that Marchionne is against it, preferring "to be one company," under Fiat, indivisible. If Fiat is finally able to purchase all of the Pentastar, it would get access to Chrysler's war chest, pegged at $11.9 billion at the end of Q3 in 2012, and that money can't come soon enough for a brand taking a beating in Europe and delaying product over cash concerns.

Fiat pondering swallowing rest of Chrysler, US IPO originally appeared on Autoblog on Wed, 24 Apr 2013 16:01:00 EST. Please see our terms for use of feeds.

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UAW urging Chrysler to sell shares to investors

Zach Bowman — Thu, 10 Jan 2013 13:30:00 EST

Filed under: Chrysler, Earnings/Financials, UAW/Unions, Fiat

The United Auto Workers union is pushing Chrysler to sell 16.6 percent of its stock to investors in an attempt to establish the value of the shares. The UAW is currently locked in a lawsuit with Chrysler parent company Fiat over how much the Italian automaker should pay to buy shares from the trust fund. Last year, Fiat told the trust it intended to exercise its right to purchase 3.3 percent of the union's shares at issue. But the union contended the 54,154 shares were worth closer to $381 million instead of the $155 million Fiat offered.

Currently, the UAW owns 41.5 percent of Chrysler while Fiat holds 58.5 percent of the company. Currently, it's unclear whether the UAW could force Chrysler to put the shares on the open market. Doing so would be the first step toward a much-anticipated initial public offering. Chrysler has said it will comply with its shareholders agreement, and Fiat has echoed that tune. According to The Detroit Free Press, the UAW Retiree Medical Benefits Trust has declined to comment on the situation.

UAW urging Chrysler to sell shares to investors originally appeared on Autoblog on Thu, 10 Jan 2013 13:30:00 EST. Please see our terms for use of feeds.

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CVC sells off 21 percent of Formula One

Noah Joseph — Wed, 20 Jun 2012 10:32:00 EST

Filed under: Motorsports, Earnings/Financials

It may be a while before Bernie Ecclestone is successful in his plans to float Formula One on the Singapore Stock Exchange, but that doesn't mean that he and his employers at CVC Capital Partners can't begin selling off chunks of their business.

Out of a valuation of $9.1 billion, CVC sold off $1.6 billion worth of Formula One to funds managed by Waddell & Reed Investment Management and Ivy Investment Management last month. That amount was augmented this week by another half-billion, bringing their total investment (and CVC's divestment) up to 20.9 percent, or $2.1 billion.

Because the buyers are primarily interested in the financial value of the business and presumably less in its day-to-day operation, we wouldn't expect much to change in how F1 is run. However, we wouldn't be surprised to see Formula One Management take a more proactive approach to marketing and promoting the series if the new shareholders are interested in capitalizing on their investment.

CVC sells off 21 percent of Formula One originally appeared on Autoblog on Wed, 20 Jun 2012 10:32:00 EST. Please see our terms for use of feeds.

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GM says Facebook ads not effective, pulls campaign ahead of IPO

Chris Shunk — Wed, 16 May 2012 10:27:00 EST

Filed under: Marketing/Advertising, GM

The Internets are buzzing over the upcoming initial public offering of Facebook, but General Motors doesn't seem all that impressed. The Huffington Post reports that The General has pulled its Facebook ad campaigns just days before the social media site is scheduled to officially hit the stock market.

The pricey ad buy reportedly wasn't paying sufficient dividends for GM, which spends billions of dollars on advertising every year. GM Spokesperson Pat Morrissey confirmed that Facebook was being reassessed, but added that the automaker routinely reviews where it is spending its ad dollars. Morrissey then added that GM is looking for effectiveness when it doles out marketing cash, which doesn't bode well for Facebook's ability to draw clicks.

If GM's decision sounds at all irrational, the statistics seem to show that Facebook isn't exactly an ad-click magnet. A recent CNBC poll showed that 50 percent of all Facebook users never click on any ads, and only 12 percent of those polled feel comfortable purchasing anything through Facebook. Google appears to be more effective at attracting clicks, as The Wall Street Journal cites a click-rate that is seven times that of Facebook.

Regardless of GM's decision to break up with Facebook, we're guessing that the news probably won't drown out much of the anticipation for the IPO. After all, it isn't every day that an Internet site with 900 million mostly addicted users goes public.

GM says Facebook ads not effective, pulls campaign ahead of IPO originally appeared on Autoblog on Wed, 16 May 2012 10:27:00 EST. Please see our terms for use of feeds.

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Yellow-Flagged: Formula One's French Grand Prix and IPO potentially on hold

Jonathon Ramsey — Tue, 15 May 2012 13:30:00 EST

Filed under: Motorsports

It is exceptionally rare for Bernie Ecclestone to be shown the yellow flag when it comes to his Formula One business dealings, but that's what happened with two of his projects. A month ago, Ecclestone agreed to terms with France's sports minister David Douillet to reinstate the French Grand Prix at the Paul Ricard circuit (which Ecclestone happens to own). The contract hadn't been signed while minor details were settled, but the plan was that the French GP would alternate with the Belgian GP starting in 2013.

However, with the defeat of French president Nicolas Sarkozy and the election of François Hollande, new reports suggest that everything from the previous regime will come under review. And it seems unlikely that Hollande, who was voted in by taxpayers who wanted more for their money and their economic pain, will agree to have the state subsidize the race. Said the president-elect, "I do not think the French state should be responsible for any financial outlay. There are enough issues to consider without spending tens of millions of euros on a grand prix."

And across the world in Singapore, the GP is safe but the planned F1 Initial Public Offering in the nation-state now has a question mark after it. The squalls in the market that have depressed stock markets everywhere have IPO insiders cautious on the endeavor. Word is that they'll see how the imminent Facebook IPO fares and how the market responds before making a decision. There is also the matter of the Mercedes-Benz not having signed the Concorde Agreement, and Daimler says it needs to get that settled before F1 can go public. According to Reuters, if the offering isn't conducted by June then it - and the estimated $2 billion it is expected to raise - might have to wait until next year.

Yellow-Flagged: Formula One's French Grand Prix and IPO potentially on hold originally appeared on Autoblog on Tue, 15 May 2012 13:30:00 EST. Please see our terms for use of feeds.

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Is Jaguar Land Rover poised for an IPO?

Chris Shunk — Thu, 19 Apr 2012 09:29:00 EST

Filed under: Jaguar, Land Rover, Earnings/Financials, Tata

When Ford sold Jaguar and Land Rover to Tata Motors for $2.5 billion, the auto industry was in rough shape. And it didn't help that the luxury combo pack didn't exactly have a lineup full of fresh rides.

Only four years have past since that historic sale, but the industry is in much better shape and new vehicles like the Land Rover Evoque and Jaguar XJ have seemingly done wonders for the luxury brands. In fact, Tata's investment may be in much better shape than most anyone would have thought. According to Bloomberg, analysts predict that an Initial Public Offering could show that the brands are worth a combined $14 billion.

That's a monumental return on investment, and there are plenty of reasons for the lofty estimate. Tata reportedly earned $2 billion off JLR in 2011, and sales are at all-time highs. The brands are also expecting major growth in China and Russia, and Tata has promised to double its investment in new products. Tata has also pledged 40 new or refreshed models in the next five years, which is likely more new metal than some full-line manufacturers would be willing to promise.

But while JLR is apparently worth an estimated $14 billion, it appears that Tata isn't quite ready to issue an IPO. Company spokesman Debasis Ray told Bloomberg in an email that Tata is planning to fund the brands through internal cash accruals.

Is Jaguar Land Rover poised for an IPO? originally appeared on Autoblog on Thu, 19 Apr 2012 09:29:00 EST. Please see our terms for use of feeds.

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CVC gearing up to sell 20% of Formula One with $2B Singapore IPO

Noah Joseph — Tue, 10 Apr 2012 18:31:00 EST

Filed under: Motorsports, Earnings/Financials

Formula One has many homes: the Formula One Management company that controls its commercial aspects is based in London, the FIA that governs its sporting aspects is based in Paris, and you'd certainly have a point to make if you asserted its spiritual home was in Monaco. But none of these places are where its stakeholders are looking to float its Initial Public Offering. No, that place is Singapore.

CVC Capital Partners - the investment group that owns the majority of Formula One - has been toying with floating an IPO on the Singapore Stock Exchange for several weeks now, and according to reports is gearing up for the move. Both Bloomberg and Reuters are expecting that the stock issue would constitute about 20% of the business, likely to come mostly out of CVC's end which amounts to 63.4 percent, and not that of its manager Bernie Ecclestone whose stake comes to 5.3%. (Lehman Brothers holds another 15.3%, Ecclestone's ex-wife Slavica owns 8.5%, with the remaining 7.5% divided up between various minority investors.)

With the overall value of the business estimated at $10 billion, the 20% tipped to be offered on the open market is expected to bring in $2 billion in capital for its sellers, however CVC could opt for the minimum 15% to raise $15 billion. So... why Singapore? The vital Asian business capital has apparently been chosen to help F1 drum up support in the Far East, a region where grands prix are held in Malaysia, China, Japan, South Korea and Singapore itself.

CVC gearing up to sell 20% of Formula One with $2B Singapore IPO originally appeared on Autoblog on Tue, 10 Apr 2012 18:31:00 EST. Please see our terms for use of feeds.

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Ecclestone estimates Formula One IPO at $10B, hires Goldman Sachs to investigate

Zach Bowman — Tue, 20 Mar 2012 18:50:00 EST

Filed under: Motorsports, Europe, Earnings/Financials, Celebrities

Formula One may be headed toward an initial public offering worth a staggering $10 billion, according to Bloomberg. CVC Capital Partners Ltd., the majority owner of the Formula One Group, has hired Goldman Sachs Group to look into the motorsports empire's value. The deal would involve selling a portion of CVC's 63.4 percent stake in F1, likely with an IPO in Singapore. The news comes courtesy of an unnamed source familiar with the discussions.

Meanwhile, F1 Supremo Bernie Ecclestone has said that he will remain in his position regardless of CVC's course of action. He is not expected to sell his 5.3-percent stake in the Formula One Group. The CEO is reportedly in talks with current F1 teams over contracts that expire this year, offering big names like Ferrari and Red Bull up to $45 million to stay on. Currently, it's unclear whether any teams have agreed to the new terms, but Ecclestone says those talks won't need to be concluded for the IPO to progress.

Ecclestone estimates Formula One IPO at $10B, hires Goldman Sachs to investigate originally appeared on Autoblog on Tue, 20 Mar 2012 18:50:00 EST. Please see our terms for use of feeds.

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Montezemolo shoots down Ferrari IPO rumors

Zach Bowman — Tue, 20 Mar 2012 11:31:00 EST

Filed under: Performance, Europe, Earnings/Financials, Ferrari, Luxury

Put your money away, people. Ferrari Chairman Luca di Montezemolo has told a German newspaper his company will not be going public anytime soon, saying, "No, there is nothing on the agenda," according to Automotive News Europe. According to the executive, Ferrari parent company Fiat doesn't need the cash that would be generated by an IPO, and that while he can't know what will happen in the far-off future, right now the automaker will continue with business as usual.

Rumor of a Ferrari IPO first hit the internet back in September after sources told Reuters that Fiat had been approached by multiple investment banks offering to list the exotic Italian supercar manufacturer on the Hong Kong stock exchange.

This isn't the first time word of a Ferrari IPO has hit the web. Long before Fiat bought Chrysler, rumors whipped around over the possibility of an outright sale or a public offering to drum up cash. Then, a little over a year ago, Montezemolo outright denied the plans all together after the dust settled.

Montezemolo shoots down Ferrari IPO rumors originally appeared on Autoblog on Tue, 20 Mar 2012 11:31:00 EST. Please see our terms for use of feeds.

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Delphi planning $550M IPO

Chris Shunk — Mon, 07 Nov 2011 08:32:00 EST

Filed under: Plants/Manufacturing, Earnings/Financials

It took Delphi four years to exit bankruptcy, but after a major restructuring and staggering losses, the parts maker is once again ready to sell shares to the public. The Detroit News reports that Delphi will offer a $550-million stock offering later this month. The move comes after Delphi announced in May of 2011 that it would seek an Initial Public Offering, though the $550 million sum is nearly half of the originally announced $1 billion IPO.

Though Delphi suffered massive losses over the past decade, the past two years have been very solid. The parts maker made $703 million in 2010, and through nine months of 2011 Delphi has earned $911 million. Investors will likely like the fact that the $911M in profits came on only $12.1 billion in sales. That's a very healthy margin of 16.3 percent, and with auto sales seemingly only going up, future profits could look even more impressive.

Delphi's labor costs are another reason for the vastly improved profits margins. Delphi got rid of 45,000 U.S. employees during bankruptcy, and now 90 percent of the auto supplier's workforce is located in low-wage countries. That's not a good sign for U.S. manufacturing jobs, but it's likely exactly what investors want to hear.

Delphi planning $550M IPO originally appeared on Autoblog on Mon, 07 Nov 2011 08:32:00 EST. Please see our terms for use of feeds.

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Montezemolo denies Ferrari IPO

Noah Joseph — Fri, 22 Jul 2011 10:29:00 EST

Filed under: Ferrari

Fiat has gone from a local automaker to a major industry powerhouse in a relatively short span of time, increasing its own market stake while taking over Chrysler to expand its global reach. But something's gotta give, figured the industry analysts, leading to speculation that one of its most valuable properties could be sold - at least in part - to raise capital for the rest.

Following much speculation that Fiat could begin selling off shares in Ferrari, the latter's powerful chairman Luca di Montezemolo has reportedly flat-out denied any possibility of an initial public offering on the open stock market.

Now, that's not to say that Fiat couldn't opt to sell all or part of Ferrari via other channels - say, privately to another automaker or group of investors. Montezemolo has been known, after all, to issue somewhat misleading statements, such as the repeated denial of an upcoming entry-level model right up until the introduction of the California. So we wouldn't quite put the issue to rest just yet, but we won't be calling our stock brokers with a standing order, either.

Montezemolo denies Ferrari IPO originally appeared on Autoblog on Fri, 22 Jul 2011 10:29:00 EST. Please see our terms for use of feeds.

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BYD raises $219 million in China IPO

Autoblog Staff — Tue, 21 Jun 2011 18:21:00 EST

Filed under: China

Chinese automaker BYD raised a less-than-stellar 1.42 billion yuan ($219 million U.S. at the current exchange rate) in its initial public offering in Shenzhen, China late last week. Analysts say that BYD's IPO was weighed down by weak investor sentiment and worries over the automaker's poor performance.

In a statement released to the Shenzhen Stock Exchange on Sunday, BYD announced that it had priced its IPO at 18 yuan ($2.78 USD) per share and had initially set its sights on raising 2.19 billion yuan ($338 million USD). BYD sold 79 million shares in its IPO and will use proceeds from the sale to fund its lithium-ion battery project, add to research and development and expand its automotive unit.

Over the past three years, Shenzhen-based BYD tried to return to the stock market and finally received approval from the China Securities Regulatory Commission in May. The automaker has struggled as of late, with sales declining since the second half of 2010.

BYD raises $219 million in China IPO originally appeared on Autoblog on Tue, 21 Jun 2011 18:21:00 EST. Please see our terms for use of feeds.

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U.S. hesitant to sell its GM stock due to low price

Jeff Glucker — Wed, 08 Jun 2011 14:01:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

The United States government still has a vested interest in the success of General Motors. In fact, the U.S. government is sitting on 500 million shares, which are currently worth about $14.3 billion dollars based on current prices. There is a problem, though, as the U.S. Treasury Department was hoping to get a larger pile of green for its GM investment.

When GM initially hit the stock market with its IPO, the per-share price was $33. Now, it's down around $28.78, which doesn't sound like much of a drop, but across 500 million shares, that figure represents a massive hit to the wallet.

For the time being, BusinessWeek reports that the U.S. government is going to sit on the stock in the hopes that it climbs back to IPO levels.

U.S. hesitant to sell its GM stock due to low price originally appeared on Autoblog on Wed, 08 Jun 2011 14:01:00 EST. Please see our terms for use of feeds.

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Delphi files for $100 million IPO

Jeff Glucker — Fri, 27 May 2011 09:59:00 EST

Filed under: Etc., Earnings/Financials

2009 was a rough year for most companies in the automotive industry. Delphi, a major automotive parts supplier, saw things a little differently. After entering bankruptcy in 2005, Delphi was able to climb out of its Chapter 11 hole in 2009. Now, two years later, Delphi is heading to Wall Street, and it looks like the parts supplier is about to make it rain.

Delphi has filled out an S-1 form and handed it over to the SEC. An Initial Public Offering will soon follow, and Delphi is looking to bring in $100 million. Delphi believes that number will fluctuate as analysts evaluate the company and the strength of its balance sheet.

If you've been following the recent rash of automotive IPOs, then you might think $100 million sounds low. Analysts agree with you.

The $100 million figure is merely a placeholder value, so that filing fees can be calculated. It's quite possible that millions will be turning into billions. Recent movement in the automotive industry has investors spending serious amounts of money. General Motors hauled in $23.1 billion during its IPO at the end of 2010. Delphi has cleaned up billions of dollars in debt while slimming down its overhead.

We'll be paying close attention when "DLPH" starts scrolling across the ticker.

Delphi files for $100 million IPO originally appeared on Autoblog on Fri, 27 May 2011 09:59:00 EST. Please see our terms for use of feeds.

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Report: Fed mulling summer sale of GM stock, would take big loss

Aaron Richardson — Thu, 21 Apr 2011 08:41:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

The Federal Reserve is eying a move to dump a large portion of its remaining General Motors stock this summer, a move that could see taxpayers lose nearly $11 billion on the deal. According to The Wall Street Journal, GM stock hasn't done nearly as well as banks and Fed officials predicted it would, falling to $29.97 a share on Monday, down from its $33-per-share IPO in November.

According to the Journal, the Fed would need to sell the stock at $53 a share to break even on its initial $50 billion GM bailout. High fuel prices have hurt sales of trucks, which provide lots of profit for GM, while bailing managers and shaky supply lines made investors nervous; none of which has helped stock prices any.

Despite the potential to lose lots of money on the GM bailout, it's thought that the Fed would like to be shut of all its GM stock before the end of the year to avoid possible controversy in an election year. No matter what happens, the Fed will have to wait to sell any of its stock until May 22, when the IPO lockout, which prevents the government from selling its stock, ends. Even with another month to go before the sale, GM stocks aren't likely to be in much better straits by the time the Fed is ready to sell.

[Source: The Wall Street Journal]

Report: Fed mulling summer sale of GM stock, would take big loss originally appeared on Autoblog on Thu, 21 Apr 2011 08:41:00 EST. Please see our terms for use of feeds.

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Williams F1 team considering IPO stock issue

Noah Joseph — Mon, 24 Jan 2011 08:57:00 EST

Filed under: Motorsports, Earnings/Financials

Rubens Barrichello tests the Williams FW32 with new Pirelli tires at Yas Marina Circuit in Abu Dhabi

What's the best way to make a small fortune in Formula One? Arrive with a large one. Williams has another idea though, and it's a radical one in the field of motor racing: The British outfit may float shares on the stock market.

Williams insists the idea is being considered in order to secure a long-term future (as its team principals are some of the oldest on the grid) and not as an effort to raise funds in the short term. After selling part of the team to Austrian investor Toto Wollf, it suffered from the departure of a number of sponsors at the end of last season. But the team insists its budget is secure for the coming championship, having recently announced a deal with Venezuelan oil company PDVSA that followed the signing of Venezuelan driver and reigning GP2 champion Pastor Maldonado to replace Nico Hülkenberg for next season.

The Williams group consists of more than just the F1 team, encompassing Williams Grand Prix Engineering as well as the hybrid development business Porsche used for the 911 GT3 R Hybrid, the development and construction of the Formula 2 chassis and separate operations in Qatar, which would ostensibly all be part of the IPO if the company decides to go ahead with the move. At the moment, however, Frank Williams and company appear to be dipping their proverbial toes in the water. Follow the jump for the official statement.

[Source: Williams | Image: Glenn Dunbar/LAT/Williams]

Continue reading Williams F1 team considering IPO stock issue

Williams F1 team considering IPO stock issue originally appeared on Autoblog on Mon, 24 Jan 2011 08:57:00 EST. Please see our terms for use of feeds.

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Fiat to increase Chrysler stake to 51% ahead of IPO?

Zach Bowman — Mon, 03 Jan 2011 16:29:00 EST

Filed under: Chrysler, Earnings/Financials, Fiat

According to Automotive News, Fiat may be looking to increase its stake in Chrysler from 20 percent to 51 percent before the Pentastar goes public. If true, that would mean that Fiat intends to repay Chrysler's federal loans before their 2013 due date. Doing so would allow the Italian automaker to sink its teeth into its American property by an additional 16 percent.

Sergio Marchionne, who serves as the CEO of both Fiat and Chrysler, said that while he doesn't know for certain whether he would move to have Fiat take over a larger portion of Chrysler, it is a possibility. The executive said that such a move would provide plenty of benefits for both automakers.

Fiat itself has been undergoing fairly substantial changes outside of its tie-up with Chrysler. The company just split into two different operations, with its automotive efforts flying under one banner and its industrial work sailing under another.

[Source: Automotive News - sub. req.]

Fiat to increase Chrysler stake to 51% ahead of IPO? originally appeared on Autoblog on Mon, 03 Jan 2011 16:29:00 EST. Please see our terms for use of feeds.

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Report: Saudi prince claims to own 1% of GM

Zach Bowman — Tue, 23 Nov 2010 13:57:00 EST

Filed under: GM, Earnings/Financials, Middle East

The dust is beginning to settle around the General Motors IPO, and we're finally getting a sense of exactly who is holding onto big slices of the company. The New York Times is reporting that Saudi Prince Walid bin Talal has managed to snag a full one percent of the automaker with a massive $500 million investment. The prince has a long history of backing various American companies through Kingdom Holdings, including Citigroup. Talal says that in the case of The General, he has faith that the company's new management can pull off respectable growth and profits.

The prince calls King Abduallah uncle, and while he isn't likely to ever ascend to the country's throne, odds are he wouldn't want to even if he had the chance. Last we heard, the guy was worth somewhere in the neighborhood of $20 billion thanks to his successful investments.

[Source: The New York Times | Image: Rabih Moghrabi/AFP/Getty]

Report: Saudi prince claims to own 1% of GM originally appeared on Autoblog on Tue, 23 Nov 2010 13:57:00 EST. Please see our terms for use of feeds.

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Report: Marchionne admits Fiat may sell off Ferrari ahead of merger

Jeff Glucker — Tue, 16 Nov 2010 09:00:00 EST

Filed under: Chrysler, Earnings/Financials, Ferrari, Fiat

Sergio Marchonne, CEO of Fiat and the Chrysler Group, has stated that he is looking to raise some cash ahead of the upcoming Fiat/Chrysler merger. One possible way to do this? Reduce its 90 percent ownership stake in Ferrari through an IPO. Fiat estimates that Ferrari is currently worth $3.3 billion, and offering stock in the Italian sports car manufacturer could generate some serious coin.

Earlier in 2010, Marchionne had stated a Ferrari IPO was possible but that he also wanted the automaker to revert to its traditional 90 percent ownership stake. After a five percent stake purchase from Mubadala Development company, it got the 90 percent ownership stake it was looking for yet talk of the initial public offering seems to contradict Marchionne's plans.

If the IPO does happen, we have a good idea who will be first in line with a briefcase full of hundreds.

[Source: Automotive News - sub. req. | Image: Massimo Pinca/AP]

Report: Marchionne admits Fiat may sell off Ferrari ahead of merger originally appeared on Autoblog on Tue, 16 Nov 2010 09:00:00 EST. Please see our terms for use of feeds.

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Report: Ralph Nader urges government to postpone GM IPO

Jeff Glucker — Fri, 12 Nov 2010 11:29:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

Ralph Nader has written a letter to President Barack Obama, urging him to delay General Motors' IPO. According to The Detroit News, his fear is that the automaker is still the "same old arrogant GM" and that the government stands to lose a bundle on the sale of its stock.

Nader is not alone in his criticism. His letter is signed by Public Citizen President Robert Weissman, Center for Auto Safety Executive Director Clarence Ditlow and former Public Citizen president Joan Claybrook. The group suggest that GM is taking steps that undermine the Obama administration's efforts after it was directly supported by the government and U.S. taxpayers. It feels that General Motors should not be lobbying congress while owners by the government. Per Nader, "They are lobbying against Obama's own policies on fuel efficiency, auto safety."

In his letter, Nader also states,

"The primary rationale of investing in GM had to be to preserve jobs and prop an economy in a severe downward spiral. As majority shareholder in GM, the United States has the ability to direct or influence the company's investment decisions. As the U.S. reduces its share, so its capacity to influence such decisions diminishes."

Ralph Nader knows that this letter is a Hail Mary attempt to delay General Motor's IPO, but he is hoping for some congressional support to build momentum. What do you think about Nader's move? Have your say in 'Comments.'

[Source: The Detroit News | Image: Brendan Smialowski/Getty]

Report: Ralph Nader urges government to postpone GM IPO originally appeared on Autoblog on Fri, 12 Nov 2010 11:29:00 EST. Please see our terms for use of feeds.

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