Project Dawn: A New Day?

Oh, where to start.  While being a tax payer contributing to the $50 billion bailout the government floated to GM and therefore partial owner of this company, I am somewhat intrigued by the possibility of recouping the funds via an IPO on the New York and Toronto Stock Exchanges.  Although in order for the taxpayers to get full compensation, the market value of the automotive company would have to be close to $70 billion.  To provide some dimension, Ford is worth $40 billion while Toyota is close to $120 billion (significantly down after all its disastrous recall).

In all honesty, I don’t expect to ever see a dime of my money back, as Obama will then use it as his piggy bank to save the next national disaster (unemployment, anyone?) and there are so many issues I have with why this IPO is hilarious, I guess there is no better way that to bullet-list them

  • Underwriters:  Morgan Stanley , JP Morgan, Bank of America, and Citibank  have been jointly charged with underwriting the IPO.  Sorry, but are these not the same institutions that so poorly mismanaged money that they were partially responsible for the mortgage collapse/massive recession?  Wonderful. This is exactly who I want in charge of trying to get my money back.
  • Timing:  Obama is pretty much in a deep hole. With an approval rating hovering in the mid 30’s going into many local and state elections, the Democrats could really use a feather in its cap.  Then the light bulb goes off!  Why not issue an IPO that results in Government Motors becoming more General Motors again by the Treasury selling 20% of its 304 million common shares it currently holds- genius!  Oh wait, maybe Geitner might want to make VERY sure that the IPO will actually result in paying back the 50 million- otherwise the Obama will be held responsible for short selling its citizens. Yikes.
  • Repayment: How would us, the taxpayers, be reimbursed for so generously (or forced as it were) to help out GM?  Is there going to be a flat fee tax credit?  A bonus check sent to each taxpayer? If so, what about all those immigrants who contributed but have been sent home (Arizona, I am talking to you) or have returned home due to the lack of employment?  What, are we just going to cut a check for $5 billion and send it over to Western Union in Jaurez,Mexico and just request that every Mexican with a recent pay stub from a registered US business to get their share?  If that is so, I might just get my visa renewed and take a little vacay to our Southern neighbor.
  • Oversight: Once the IPO is issued, the US Treasury (Canada’s either) will be allowed to appoint board nominees. However, it will still influence executive appointments and compensation. Whew! That’s a load off, especially as we have seen how great they have overseen Goldman Sachs compensation and financial decisions (including sending $4.3 billion to foreign companies)…..errr, wait a minute.

While I could go on forever with the holes in this beyond brilliant idea, there is simply too many other topics currently in my Ali that I need to take on.  Plus, I must go dedicate time to reviewing my mail for my “stimulus check” with ‘GM hit it big’ in the memo line.

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