Since the company's bailout in 2008, GM has quietly been referred to as "Government Motors". However comical, this nickname actually has serious implications regarding not only how GM has operated for the past two years, but also how GM will be taken public with an Initial Public Offering taking place on November 17. One of the most controversial aspects is the ability of sovereign wealth funds, like in the Middle East and China, to purchase extensive holdings in GM. The Obama administration and its financial advisers understand the political sensitivity of the situation, but in the end decided to allow access to large foreign investors.
However, I believe it may not be so much the question of whether foreign wealth funds should have the ability to buy GM stock, but whether these entities should be given what could be large and immediate profits when U.S. citizens, those who theoretically provided the billions in taxes to keep GM afloat, will not enjoy such access.
This sensitive situation involving one of our nation's oldest and most iconic companies further illustrates the importance of the midterm elections that have just finished up. With a conservative and economically concerned congress, the likelihood of gridlock between Obama's plans and theirs is certainly increased. Who knows what lies in the fate of one of our nation's icons.
Morgan Duff
http://www.reuters.com/article/idUSTRE6A04RG20101101?pageNumber=1
I would imagine that Middle Eastern or Chinese investments would be more of a political problem than a finacnial one. I'm not sure how the new Congress factors into this but there is some bad blood between conservatives and GM.
ReplyDeleteThis is probably a good time for GM to loose it "Government Motors" title.
GM's IPO will begin to pay the government back. Personally, I think my ideological brethren need to back off from the "Government Motors" crap.
ReplyDeleteImagine the take over of "government motors" by a foreign nation. I'm sure there are regulations as to the amount of shares that foreign nations can purchase of GM, but the possibility is certainly present. In context of our nation's economical situation it would actually present America a great way to get back to financial soundness.
ReplyDeleteBtw, Chris, it's "lose" not "loose"
ReplyDeleteLOL