Bankruptcy Still Fresh For Cautious GM Investors

The "new" General Motors started selling its stock to the public Thursday. The return of GM brought excitement to Wall Street as an American corporate icon was resurrected. But, the new GM still has obstacles ahead.

STEVE INSKEEP, host:

General Motors is once again trading on the New York Stock Exchange. President Obama hailed this sale as a victory for his administration, bringing GM out of bankruptcy and turning it back to the public, after the U.S. spent $50 billion on a bailout.

President BARACK OBAMA: American taxpayers are now positioned to recover more than my administration invested in GM, and that's a very good thing.

INSKEEP: The U.S. Treasury stake in GM will drop by nearly one half for now. So even if yesterday symbolized the resurrection of an American corporate icon, GM still has plenty of challenges.

NPR's Sonari Glinton reports.

SONARI GLINTON: Normally, the first public offering of stock is a time of tremendous celebration for a company. Champagne, cigars, pats on the back, cake. But on the conference call after GM's stock began trading, CEO Dan Akerson showed a quality rare for a top executive: humility.

Mr. DAN AKERSON (CEO, General Motors): We know how we arrived here. We know what went wrong. And I believe we've learned a lot from that.

GLINTON: So far, Wall Street seems to believe the GM executives have learned their lesson. On its first day on the New York Stock Exchange, almost a third of the volume traded was GM.

David Whiston is an analyst at Morningstar.

Mr. DAVID WHISTON (Analyst, Morningstar): I've always been quite optimistic on this deal. I'm not surprised to see it go up on its first day and I'll be looking for it to go up more over time.

GLINTON: Whiston says the last year of results show the company is worth the risk and he's been urging his clients to buy.

Mr. WHISTON: If GM can now break even when the total U.S industry sells about five million fewer cars a year, that means as vehicle volumes start coming back, GM is going to be printing money.

GLINTON: The people who most want that to happen are those closest to the company - the employees, retirees and dealers. They got a chance to buy shares as trading began.

Terry Voytko works at GM's plant in Lordstown, Ohio. He bought a small amount of the GM stock. But he did so cautiously - very cautiously.

Mr. TERRY VOYTKO (General Motors Employee): I knew so many people that had invested heavily in General Motors prior to this, that I work with and that lost a lot of money. A lot of money.

GLINTON: John Christie runs the GM Retirees Association, an organization of non-union retirees. He also cautiously bought stock and he hasn't forgotten the bankruptcy either.

Mr. JOHN CHRISTIE (Director, GM Retirees Association): It hurt a lot, but we cant stay there. You know, we do have to move on and this looks like the new GM is starting to come out. At least in some small way I want to be a part of that.

GLINTON: While Wall Street investors, GM workers and retirees may be ready to turn the page, that doesn't mean the company is in the clear.

Dr. SEAN MCALINDEN (Research Center for Automotive Research): And the public will only forgive GM and Chrysler finally if they repay every last red cent they borrowed with interest.

GLINTON: Sean McAlinden is with the Center for Automotive Research. He says General Motors still has a lot of hurdles to get over.

Dr. MCALINDEN: They have to pay back their loans. They have to pay off that pension, and they have to get ready for much higher levels of fuel economy, even under the Republicans, you know, in the future, which will take a great deal of money for investment.

GLINTON: McAlinden says there's no room for error for GM. He says politically speaking, if the company fails again, it's on its own.

Sonari Glinton, NPR News.

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