General Motors is up for an initial public offering and this could be good news for the federal government which stands to gain back some of the bailout money it had extended to General Motors during the economic crisis. At present, the U. S. government owns 60.8% of the company. This initial public offering involves selling shares of stock to the public in order to raise more money. Morgan Stanly and JP Morgan Chase have expressed an interest in the offering.
This comes after General Motors reorganized the company and now shows signs of recovery after having lost money during the economic crisis of 2008, laying off workers, and taking outdated models off the market. President Obama ordered the company to downsize in view of its economic woes, after formerly enjoying a 51% market share.
General Motor’s problems began in 1962 when it failed to recognize the needs of the consumers and the Japanese were able to steal away some of its most loyal customers. It also failed to produce cars which were more economically suitable to customers in view of rising gas prices. GM”s strategic marking plan had failed.
Because of the Treasury Department’s involvement in this IPO, the GM underwriters will not make very much on this deal, as the U.S. may limit their fees. For any business owners who are involved in strategic planning for their companies, General Motors makes an excellent case study for the ramifications of marketing decisions and their effect on the company’s future.