Economy

Could GM Help Fuel Obama 2012?

By Adam Sorensen | @adamsorensen | November 16, 2010 | +

Two stories today that suggest it’s not so far-fetched:

Forbes on the feeding frenzy for GM’s Thursday initial public stock offering:

Demand for GM stock is so heavy that one person briefed on the IPO said orders are seven times the number of common shares that are up for sale.

GM announced Tuesday that it would raise the price range for common stock being sold this week to $32 to $33 per share, up from the range revealed two weeks ago, $26 to $29.

At $33 apiece, the total value of the 1.5 billion outstanding GM shares would be nearly $50 billion, up $6 billion in the last two weeks.

And Motor Trend on the Chevy Volt, its newly crowned Car of the Year:

In the 61-year history of the Car of the Year award, there have been few contenders as hyped — or as controversial — as the Chevrolet Volt. The Volt started life an Old GM project, then arrived fully formed as a symbol of New GM, carrying all the emotional and political baggage of that profound and painful transition. As a result, a lot of the sound and fury that has surrounded the Volt’s launch has tended to obscure a simple truth: This automobile is a game-changer.

If the government can come out of the automaker bailout experiment with minimal losses (and gains aren’t yet out of the question), it will be one of the few  self-evident and politically viable economic policy victories that Obama can carry with him into his re-election effort.

Related Topics: Barack Obama, Democratic Party, Economy, White House

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  • http://shortplaysaboutrealpeople.wordpress.com Michael Maiello

    This is dangerous territory. Surely you know better than to measure the effectiveness of a policy by something as fickle as a stock offering, don’t you? What if the IPO is great but then the shares tank 1-5 years later? Will you be calling it the presidential pump and dump? If you’re going to judge the policy, judge it based on how many jobs it saved and at what cost. The success (or not) of the IPO, or the trajectory of GM’s share price on the secondary market, should not be the arbiter of success or failure here.

  • apr2563

    Michael: Very good point. Unfortunately, we so often judge success based on the stock market and not in real world outcomes.

  • Ivy_B

    Excellent points. Of course it is much more complicated to evaluate than a quick snip at the IPO.
    .
    In addition to direct jobs, there are all the supply chain and local business jobs. I read that places with big plants of foreign car makers (Yes, you Mitch McConnell) had people from those plants going to their congresspeople pointing out that if the supply chain failed it would dramatically affect them as well.

  • http://jcapan.wordpress.com jcapan

    Well, since we have “two” parties jockeying to be the oligarchs’ retainers, one could argue that what’s good for Wall St. is the only barometer for political success in America.
    .
    No other way to explain Obama-nomics–his policies have clearly been far better for the ruling class than the working class. If his faction of the duopoly wants to keep the financial taps flowing…

  • square1

    Similar to the above comment, I would caution the press — and the administration — against focusing too much on whether the government turned a profit or not on the investment.

    Democrats should be proud that they stood tall for U.S. manufacturing and literally millions of middle-class working Americans when the Republicans would have shuttered Detroit and forced Americans to buy all their cars from foreign companies, either built abroad or built in non-union, low-paying factories in the South.

  • lreed580

    According to an official from Ford Motor Co., who was on Washington Journal last week, if the Government had not bailed out GM and Chrysler, the whole industry, including Ford would have collapsed.

  • herby002

    I hope GM’s working on more models than just the Volt. As good as it might be, it’s not enough to carry the whole company. The next cars in the pipeline have to be innovative, and at least as well made as the competition’s in order to win back buyers.

    Then there’s Chrysler. The sales of Fiat cars might bring buyers into the (dual) dealerships and help the bottom line of the company, but the Chrysler brand won’t be “back” until it produces well-made models that can get really high ratings from Consumer Reports, etc.

    I’ll hold my breath. There’s still a lot riding on the success of all three “domestic” manufacturers.

  • liberalmeltdown

    I love the scent of hypocrisy on the web.
    .
    http://news.yahoo.com/s/nm/20101102/bs_nm/us_gm_taxbreaks
    GM can avoid federal taxes on $50 billion of profits: report
    .
    Suddenly all the anti-corporation liberals are cheerleaders for GM.
    ‘
    Gee, can I get a waiver on my taxes for the next 20 years?
    .
    In addition the government is planning on giving a $7500 rebate to consumers on the $41,000 Price tag. I guess if it doesn’t sell they can up the rebate… say $20,000. Or, just include a car in exchange for votes in 2012. The volt’s acceleration isn’t spectacular; that’s for sure. But, hey it’s Government Motors.
    .
    To address some of the comments above: The stock market is the real world. The democrats want to tell people what kind of cars that they can drive. I hope that American car manufacturers will finally improve the quality of the products that they produce. That would make them competitive with the rest of the world.
    .

  • herby002

    “I hope that American car manufacturers will finally improve the quality of the products that they produce. That would make them competitive with the rest of the world.”

    I’m glad that you agree with what I said earlier. The rest of what you said is standard reflexive “conservative” dreck.

    Be careful what you’re spouting word-for-word: Rush might do a one-eighty on you tomorrow if he signs GM as a sponsor; then you’ll be philosophically as bereft as the Communist Party after Stalin signed the peace pact with Hitler.

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