Find the latest episode of "The Uncertain Hour" here. Listen

GM to go public to pay back bailout

Marketplace Staff Oct 29, 2010
HTML EMBED:
COPY

GM to go public to pay back bailout

Marketplace Staff Oct 29, 2010
HTML EMBED:
COPY

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.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.