GM IPO talk now dumbest thing in world: York

By @ibtimes on

Talk of an initial public offering for General Motors Co by the second half of next year is so premature as to border on the ludicrous, a former director of the largest U.S. automaker said on Monday.

GM exited bankruptcy in July after the U.S. Treasury pumped about $50 billion in financing into its restructuring, and now owns more than 60 percent of the Detroit-based company. Analysts have said an IPO could be a way for U.S. taxpayers to recoup their investment over time.

It's the dumbest thing in the world to be talking about an IPO right now, former GM director Jerry York, at the Reuters Autos Summit in Detroit. It's time hopefully will come and when the time is here we'll all know it.

As part of a massive restructuring that included the elimination of thousands of jobs, GM is shedding brands to focus on four core nameplates -- Chevrolet, Cadillac, GMC and Buick. It has closed Saturn and Pontiac outright and is trying to sell Hummer and Saab.

It stands to lose one to two percentage points of market share from its current level of 19 to 20 percent, as a result of the reduction in the number of brands it sells, York said.

They're not going to be able to make up all the volume that they had with the four brands they are shedding with four brands they are retaining, said the 71-year-old adviser to billionaire investor Kirk Kerkorian. I think that inevitably their market share is going to go down a point or two just by virtue of shedding those four brands.

The company's new board appears to be on the right track in righting a ship that last year lost its position as the world's top automaker to Toyota Motor Corp, York said.

They've done a lot of the right things and we'll all know in another six to nine months whether they need to do more structurally, he said.

(Reporting by David Bailey, writing by Scott Malone; editing by Carol Bishopric)

Join the Discussion