GM Public Offering Isn't A Comeback Story Yet
SCOTT SIMON, host:
General Motors was back on the New York Stock Exchange this week, less than 18 months after the iconic American car company had to be bailed out by the federal government. GM's initial public offering was one of the largest in Wall Street's history.
The company is more efficient and profitable but there's still plenty of questions about the road ahead.
For more, we turn now to Micheline Maynard. She's the senior editor of Changing Gears, a new Public Radio project that looks at the future of the industrial Middle West. Micki joins us from member station WBEZ in Chicago.
Micki, thanks so much for being with us.
Ms. MICHELINE MAYNARD (Senior Editor, Changing Gears): Thank you so much, Scott.
SIMON: And the company got off to a pretty good start on Wall Street at least this week, didn't it?
Ms. MAYNARD: It did. Originally, General Motors stock was supposed to sell somewhere in the mid-$20 range. And there was an enormous amount of interest in it, and it ended up opening at about $33 and going up in the first day of trading, although I think some of those gains moderated by the end of the week.
SIMON: Does it appear that the corporate restructuring that they underwent worked as planned - and, for that matter, the agreements with labor unions and the thinning out of their structure?
Ms. MAYNARD: General Motors today is a much leaner company than it was a year and a half ago or even two years ago. The one thing that consumers would notice, of course, is that General Motors got rid of four of their brands. They no longer have Saab, Hummer, Pontiac or Saturn. They have gotten rid of several hundred dealers, which is something else that you would notice driving down the street where there's a dealership.
And they did close a number of plants and lay off thousands of workers. That's something that's hurt communities across the Midwest, really across the country. So there have been some people who have suffered because of the comeback of General Motors.
SIMON: What seems to be the new car models that GM is looking to make an impression with?
Ms. MAYNARD: Well, a couple of them should be on people's radar now. One is called the Chevrolet Cruze, and it's a small car that's built in Youngstown, Ohio at the Lordstown plant. And it's intended to compete with cars like the Honda Civic and the Toyota Corolla. And it's actually gotten a lot of favorable publicity. It's just now showing up in showrooms.
The next vehicle that you'll be hearing a lot about is the Chevrolet Volt, which is a plug-in hybrid electric car that can run on an electric charge or on a small motor.
And Toyota is actually the leader in hybrid cars. It's been selling the Prius for about 10 years. Honda has the Insight. There's another electric model called the Nissan LEAF that's getting a lot of attention too.
So, you know, even as General Motors introduces these new cars, they do face a lot of competition.
SIMON: And what about the company's long-term prospects, because it's not as if Japanese and German auto manufacturers are standing still. And of course then there are Indian and Chinese and Brazilian companies coming into the market also.
Ms. MAYNARD: Exactly. One thing that we don't worry about now, I think, is that General Motors might collapse or dissolve. They basically got a new lease on life from what the Obama administration did for them. I think their long-term prospects are good, as long as they don't lose sight of the fact of what you just said: This is a very competitive market, nobody is standing still.
You know, but there are no guarantees in the car market. Chrysler also got a federal bailout. They're now under the control of the Fiat. And everybody is kind of waiting to see if they'll catch fire, because they haven't started selling stock again. It's not clear whether they will. They have been cutting dealerships and laying people off. They say they've got a turnaround in the works too.
But they are a little bit farther behind than General Motors. So really the two competitors in the American companies are General Motors and Ford.
SIMON: Micki, what does the survival and restructuring of GM conceivably mean to the industrial Middle West?
Ms. MAYNARD: Well, General Motors has been the most important company in the country for most of its hundred or so the year history. In the Midwest, it was really the company that mattered. People called it Generous Motors. They called it Mother Motors. The idea was that you would go to work there, work your way up the system, and have a nice retirement afterwards.
When General Motors started to fall on hard times, it affected everyone in this region from Janesville, Wisconsin over to Pittsburgh. It really was a company that buoyed the whole Midwest economy. So the fact that General Motors has been restructured, the fact that the General Motors building is now the Renaissance Center in Detroit but it's still there, is a great inspiration to a lot of people in the Midwest region. And its future health is something that a lot of people are counting on.
SIMON: Micheline Maynard, senior editor of a Public Radio project called Changing Gears, speaking with us from Chicago.
Micki, thanks so much.
Ms. MAYNARD: My pleasure, Scott.
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