General Motors is scheduled to begin trading on the New York Stock Exchange again next week, but that will be delayed if consumer group leader Ralph Nader gets his way. A recently written letter by the group urges the President to delay the IPO in the interest of U.S. taxpayers.
Ralph Nader and fellow consumer activists recently wrote a letter to the President, asking him to delay GM’s upcoming IPO. Reasons for the proposed delay include the fact that the United States government is poised to lose billions of dollars from the stock sale. As part of government-funded bailout last year, GM traded a 60.8-percent stake in the company for $50 billion in cash. In the upcoming IPO, the government will reduce its stake in the company to 40 percent, but stands to lose roughly $5 billion in the initial sale.
Rather than reducing its share, Nader’s group is pushing for the government to take an active role in the company pushing it to protect U.S. jobs while maintaining American production facilities. The group also believes that as majority stake holder, the U.S. government can direct GM to further its development of clean – namely electric – vehicles. However, when the government reduces its stake in GM, it will also be lessening its influence over the automaker. The letter also delves into the fact that GM has recently lobbied against raising fuel economy and safety standards.
Nader has been a thorn in the side of GM since he challenged the safety of the Chevrolet Corvair in the 1960′s. Although the car was later deemed safe by National Highway Traffic Safety Administration, it was the beginning of Nader’s quest to improve safety standards in automobiles.
What do you think, should the U.S. government delay the IPO, and continue its influence over GM, or should the Detroit automaker have the ability to act freely? Share your thoughts in the comments section below.