Good News: GM Posts Profit; Bad News: Obama-Induced Lousy IPO Market May Mean It Remains Govt. Motors
This is going to require a lot more investigation than yours truly has time for at the moment, but it seems that if #1 were as good as indicated, #2 might not be happening:
- #1, Via AP — “GM posts $1.33 billion profit, a sign of strength” (Update: Changed at 12:45 p.m. to “GM posts big profit; CEO says he’s done his job”)
- #2, also Via AP — “GM CEO Whitacre says will step down Sept. 1″
(Both links are dynamic and will probably change throughout the day.)
But there is another possible reason why Whitacre is leaving.
We’re told that the government really, really, really isn’t involved in GM’s management. Hmm. I guess that means we’re supposed to assume that there’s absolutely no relationship (of course not, there couldn’t possibly be) between Whitacre’s imminent departure and this quote from last week:
I suspect that the White House’s car czar and cronies had a hard time digesting that level of antagonism.
Despite the apparent good news on the financial front, there’s a teeny-tiny problem with having Whitacre around after the blurt-out just noted. AP item #1 about GM’s profit reports that the failure that is Obamanomics has adversely affected the climate for the initial public offering that would “get the government out, period.” The AP’s quoted expert also dropped a bombshell — apparently without qualification — that may not survive future AP revisions (bolds are mine):
Although GM is performing well, the timing still isn’t right for it to sell shares in the next few months because of the sputtering economy, said Scott Sweet, senior managing partner of IPO Boutique in Tampa, Florida, which advises investors on IPOs.
Several recent IPOs have been postponed because of concerns that they won’t get a high enough share price, he said. He also said the Obama administration is pressuring GM to sell prematurely to influence the November congressional elections. Last week, Whitacre said the elections are not being considered, and the government has repeatedly said GM is in charge of the sale timing.
Saying that GM “is in charge of the sale timing” is NOT the same as saying “we’re not trying to influence the timing,” is it?