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STEVE CHIOTAKIS: GM this morning said its initial stock price will be more than expected. So when it starts trading in New York on Thursday, it’ll fetch between $32 and $33 a share. That’ll net taxpayers billions of dollars after the government during the financial crisis bailed out the troubled Detroit automaker.
Stephen Rattner is the former head of President Obama’s Auto Task Force, and author of the book “Overhaul.” He’s with us from our New York bureau. Thanks for being with us.
STEPHEN RATTNER: Thanks so much for having me.
CHIOTAKIS: Is this a good deal for tax payers? This 32, 33 bucks a share?
RATTNER: I think it’s quite a good deal for tax payers. It implies based on where the stock will presumably trade after and so forth, that of the $50 billion total put into GM, tax payers will recover at least $42, $43 billion and maybe all $50 billion. Remember that a lot of that money was put in under the Bush administration, under the early Obama days — that’s kind of a bridge. So I think all things considered, tax payers are doing incredibly well here.
CHIOTAKIS: It looks like a lot of the stock won’t be accessible to a lot of tax payers, though. And their money bailed the company out. Is that fair?
RATTNER: The stock may not be accessible on the initial public offering itself, but it’ll start to trade on Thursday morning, and then they can buy it in the open market, like everybody else. I am not familiar with exactly how they are allocating shares here but the idea of essentially having a nation wide offering, and saying any tax payer can buy it unfortunately, as fair and as equitable as that may sound the logistics of that would be essentially impossible.
CHIOTAKIS: What od you think would’ve happened had the government not gotten involved?
RATTNER: I think this is one of the most importnat points for Americans to take away from this whole experience: whether you like bailouts or not, you have to understand what the alternative was, in this case. If the government had not stepped in and provided this financing, these companies would’ve closed their doors, they would’ve laid off every single worker, they would’ve shut their doors, all their suppliers would’ve gone out of business. The next thing that would’ve happened is that Ford would’ve shut down, because it wouldn’t have been able to get parts from these suppliers who are now shut down, and you would’ve had a catastrophe. You would’ve had a couple of million jobs lost in an instant. And so people who say that there was a third alternative, of somehow the government staying out, that these companies reorganizing themselves on their own using private capital, was fantasy land. There was no private capital. The markets were frozen.
CHIOTAKIS: Stephen Rattner, former head of the Auto Task Force, and author of the book “Overhaul,” Stephen thank you so much.
RATTNER: Thanks so much for having me.
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