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Commentary: GM IPO Proceeds Should Go Back to Taxpayers

American taxpayers who spent $50 billion bailing out General Motors may see some returns, if the Obama administration allows it.

There appears to be a “new” GM emerging – one that is seeing improved sales after the firm’s massive restructuring and new car offerings, and one that’s becoming a dominant force overseas, particularly in countries like China and Russia.

So now, it's time for the government to show taxpayers if “new” GM is really strong and not just rhetoric, by planning for the automaker’s IPO proceeds to go to the people who allowed this American icon to exist. This could be done in a few ways.

GM Headquarters
AP
GM Headquarters

The GM IPO could be done through a modified Dutch Auction, by advertising and providing easy to use websites to allow interested taxpayers could participate, similar to the way China and Hong Kong offer major state-owned enterprises. The IPO could include share grants in the style of major state owned enterprises in Eastern Europe. Tax rebates could be another way.

The point is - there are options. And while the IPO underwriters have accepted a low fee to do the deal and may not want to see their profits eroded further, the U.S. government hopefully has learned from its experience in bailing out Citigroup and other banks. Loans to those financial institutions may have been repaid with interest, but it was the employees, not taxpayers, who reaped the benefits when banking stocks rebounded.

If GM really is ready to ride, some of these ideas should have traction. But if GM is still saddled with unbearable labor contracts that may send it back into bankruptcy, then the government owes America the truth.

If we can't be part of the IPO because GM is a weak company and the stock may drop, we deserve to hear that from the White House.

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