Nader seeks suspension of GM stock offering

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WASHINGTON (AP) — Ralph Nader and consumer groups want the Obama administration to suspend General Motors’ initial public stock offering, saying taxpayers could lose billions of dollars in the deal.

Nader said in a letter Thursday that delaying the stock offering would allow the government to recoup more of its $50 billion investment and cautioned that the government would have less influence over the auto giant by reducing its ownership stake. He estimated taxpayers could lose nearly $5 billion by conducting the IPO this year.

General Motors is moving ahead with a public offering expected to raise about $10 billion. The stock sale is expected to occur Nov. 18 and the government, the largest owner, is expected to reduce its stake in the company from 61 percent to just over 40 percent.

GM has outlined plans to sell 365 million shares for $26 to $29 per share. The Treasury Department would receive about $7 billion from the stock sale, which would be followed by additional sales in the future to further reduce its ownership stake.

The Obama administration has said it wants to sell off its ownership of GM as quickly as possible while protecting taxpayers and recouping as much of the $50 billion in federal aid as it can. Treasury officials have said they are not involved in GM’s daily business decisions.

The Treasury Department and GM both declined comment on Nader’s letter. But there have been no indications that the IPO will be delayed. GM executives are conducting a global “road show,” discussing the company’s prospects to institutional investors to drum up interest in the sale.

The letter was signed by Nader, the former presidential candidate and longtime auto industry critic, and leaders of consumer watchdogs Public Citizen and the Center for Auto Safety.