When I sat down to talk with President Barack Obama at the Ford plant on the south side of Chicago, I knew he would tell me the auto industry is in far better shape because his administration stepped in last year to save GM and Chrysler.
The success of the auto bailoutsis why the President toured GM and Chrysler plants last week before visiting Ford this week.
But there's an interesting question about the GM IPO many investors would like the President to address.
Why not make the GM IPO open to taxpayers? After all, the taxpayer money (almost $50 billion) saved GM. Shouldn't they get a chance to truly own GM and profit if it succeeds?
When I asked President Obama this question, he said, "Well, here's the thing about the IPO. I am hesitant to talk about details on an IPO because it has to go through the Securities & Exchange Commission process of registration and so forth, so I've got to be careful where I tread here."
The President added, "GM has indicated that it is going to move forward with an IPO at some point later this year. When it does so, we expect that taxpayers will get back all the money that my administration has invested in GM. Over time, that is going to be extraordinarily significant, because what it means is we've stood up for this industry, and you know what, we got a good return. But the general point about who's participating in the IPO, who can potentially be an owner in this company and also make some money on that investment over the long-term, beyond my looking out for the interests of taxpayers, I've got to be careful about what I say as regarding individual investors."
So I pressed the President again, "But would you be open to the idea of a Dutch auction, if you will, an open IPO so that the average investor might have an opportunity?"
This time the President was more direct saying, "You're not going to get anything out of me on this one because as I said, I want to make sure that we are not breaching any registration rules or any requirements on the SEC. What I know is that as a general proposition, taxpayers can be made whole as a consequence of the good decisions that we made last year, even though those decisions were unpopular."
While I understand the Presidents position about not commenting on GM's IPO, it is a fair question that should be addressed by someone in Washington. If there are specific reasons for not having an open IPO, tell us what those reasons are so people will understand.
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