GM Plans To File Soon For Stock Offering

by Carolyn Beeler, NPR

A year after filing for bankruptcy, General Motors is preparing to seek SEC permission to start selling stock again.

Company officials say shares might start trading as early as this fall. GM's talk of an initial public offering comes after an encouraging year for the company.

Executives at GM say the company is making money and operating more efficiently. They've cut costs by more than $10 billion by closing plants, cutting jobs and reducing health care expenses.

George Magliano, an auto industry expert at IHS Global Insight, says the slow economy might not make this fall the best time for GM to start selling stock. But internally, he says the company is in good shape to put itself on the market again.

"Look at it from a cost structure basis, and they are at that point where they can do this stock offering," Magliano says.

The upcoming stock offering won't change anything for shareholders of the nearly worthless old GM stock.

Magliano says revenue from the GM IPO will be used to pay back the government for the auto company's bailout.

Dave Sargent of J.D. Power and Associates says as GM moves forward, a key to the company's success will be improving public perception of the brand. "Their quality has improved significantly over the last few years," Sargent says. "But when we look at how consumers perceive them they're still trailing, certainly some of the imports and also Ford."

Analysts say that public perception will be heavily influenced by how the compact, fuel-efficient Chevy Cruze fares when it's unveiled in September.

Broadcast Dates

• Morning Edition, July 12, 2010