In G.M. turnaround story, Washington played a big part

interns Contributor
Font Size:

DETROIT — When executives from General Motors begin pitching its public stock offering to investors this week, they will extol the company’s financial turnaround, its snazzy new car lineup led by the plug-in Chevrolet Volt, and its growing operations in China and other international markets.

The government is playing an integral role G.M.’s public stock offering by deciding how many of its 304 million shares it will sell off and at what price.

Absent from the pitch? The extraordinary role that the federal government has played in fixing the nation’s biggest automaker.

While the government’s $50 billion bailout last year saved G.M. from liquidation, the Obama administration has taken great pains to distance itself from any appearance of running the company. Even a hint of government meddling, administration officials say, could have a negative effect on the value of the American taxpayers’ stake in a publicly traded company.

Yet interviews with G.M. and federal officials show decisions by the government have played a pivotal role in shaping the automaker’s leadership, its business strategies, and now its initial stock offering, which will raise an estimated $10.6 billion at the same time that it reduces the taxpayers’ stake in the company from 61 percent to below 40 percent.

People familiar with the contact between G.M. and the Treasury Department say Ron Bloom, a senior adviser to the Treasury secretary Timothy F. Geithner, is told about actions that G.M. management and the board are contemplating before they occur.

Full Story: In G.M. Turnaround Story, Washington Played a Big Part –