The General Motors IPO

Much is being made of the General Motors Initial Public Offering, but it might be well to reflect on the carnage that lies behind that event, because this is a new company being built on the rotting carcass of the old one.

Most such IPO’s are celebrations, issuances of stock for a new creation, the birth of a new enterprise. Not so General Motors. General Motors is a failed company which, with government sponsorship, relieved itself of its problematic issues and “toxic assets” and reformed itself into a whole new company of the same name.

All over the midwest are closed plants and voided labor agreements which also belong to General Motors; the “old” General Motors now renamed “General Motors Liquidation.” The workers of “old” General Motors are idled in large numbers, while a few of them and large numbers of new hires are working at the “new” General Motors for lower wages and fewer benefits.

Meanwhile, new investors are snapping up the stock offering of the “new” General Motors at $35 per share, Democrats are crowing about how well the bailout worked with this newly profitable General Motors, and telling us how the government will make a profit on the deal and it won’t cost the taxpayer a dime.

But it certainly cost those who worked for the “old” General Motors and unemployment is still well above 9.5% as it was when the “old” General Motors was in business.

Seems to me the only gainers are on Wall Street. As usual.