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Things Are Looking Up For General Motors

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On: Tue, Nov 23, 2010 at 12:23PM | By: Sherry Christiansen

Things Are Looking Up For General Motors

According to many insiders from General Motors, things are really beginning to look up for the Detroit automaker. Last week's successful Initial Public Offering enabled the company to pay off a quarter of the amount owed to the federal government. An Ohio dealer, Chris Haydocy, reported to Automotive News that he was all too familiar with the new name that many consumers had labeled General Motors with“Government Motors.” The federal government becoming 61% majority stakeholder of GM translated to a boycott of Buick, Chevrolet, Cadillac, and GMC automobiles by Conservatives in the Buckeye State and around the country.

After General Motors was able to raise $23.1 billion at its recent IPO, Haydocy and many other dealers feel things will change, and dealers are beginning to feel more hopeful about a rise in sales for all GM brands. According to Steve Girsky, GM Vice President of Corporate Strategy: “Government ownership hurt sales; our studies showed that consumers knew it going into the showroom.”

Last week's IPO topped out at $23.1 billion last week after GM changed the price of the common shares to $33 per share instead of the original estimate of $26. The stock closed at $34.26 a share.

All four of GM brands have shown a significant sales increase; so far in 2010 the total is 29% of total U.S. sales.

Carroll Smith, a Texas Chevrolet dealer, commented that he “won't be happy until the government has sold its stake in GM.”

The IPO reduced U.S. ownership in GM to around 33%.

Smith told news reporters that he feels strongly government ownership has hurt his 2010 sales. He said many consumers were giving praise to Ford Motor Company for refusing to take federal bailout money, and he is certain that sort of thinking transferred to a loss of GM’s customer loyalty.

Another dealer interviewed by the press, Tom Durant, a Chevrolet dealer in Dallas, feels that the element that will determine GM’s future the most is its products, and now that GM’s sales are climbing there will be more money to invest in new product development.

"We had new products coming out during bankruptcy and lots afterward," said Durant, owner of Classic Chevrolet. "That's what this game is all about."

So far in 2010, the Chevy Cruze, Chevy Volt, and Buick Regal have been introduced, as well as GM’s popular HD full-sized pickup trucks.

Dealers across the country feel that the IPO will bring renewed success to General Motors. According to Ohio dealer Haydocy: "People aren't investing because of civic pride; they want to see the story behind the success."


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