GM to go public to pay back bailout
The logo for the General Motors Company is seen at the top of its World Headquarters and Renaissance Center complex in Detroit, Mich.
TEXT OF INTERVIEW
JEREMY HOBSON: To the taxpayer owned automaker General Motors now. The company is expected to go public next month as it tries to raise money to repay its government bailout money. And ahead of the IPO, GM is trying to spruce itself up for investors.
Marketplace's Nancy Marshall Genzer is covering this story for us this morning. She joins us now live from Washington. Good morning, Nancy.
NANCY MARSHALL GENZER: Good morning, Jeremy.
HOBSON: Nancy, what's GM's doing to make itself more attractive to investors?
GENZER: Well, it's slimming down, Jeremy. GM says it's going to buy back about $2 billion worth of stock owned by the U.S. government. It's going to contribute at least $6 billion to its pension plans. And it's going to put back some money into to its health care fund for retired workers. As I said, GM is slimming down, cutting back on debt to impress investors.
HOBSON: Of course, GM still owes us taxpayers a lot of money. Is it making any progress on that debt?
GENZER: Well, the U.S. government still owns about a 61 percent stake in GM. You remember, we acquired that after spending about $49 billion to bail out the car maker during the financial crisis. I talked to Michelle Krebs of edmunds.com about whether taxpayers will get their money back. She says GM will repay it, eventually. But even after that, there could be ongoing damage to its reputation.
MICHELLE KREBS: GM has thought that having government ownership has hurt sales. I don't know that it'll even be clear opt the American public that it has paid that back. That's be an interesting challenge in terms of, whether there will be a lingering effect of that.
GENZER: Krebs says GM is fighting that perception by focusing on quality. And she says GM's newest models are built well and they're selling well.
HOBSON: Marketplace's Nancy Marshall Genzer in Washington, thanks Nancy.
GENZER: You're welcome.