President Obama on Thursday hailed the initial public offering by General Motors as proof that his economic policies are starting to “pay off.”
The retooled automaker, which the Obama administration rescued with $50 billion in aid, in a government supervised bankruptcy proceeding last year, made a successful return to the New York Stock Exchange with an initial public offering that saw its stock surge before the closing bell.
The company’s stock was offered at an initial price of $33 per share and closed at $34.19, up 3.6m percent for the day.
“We are finally beginning to see some of these tough decisions that we made in the midst of crisis begin to pay off,” Obama said Thursday at the White House.
The initial offering was much higher than analysts had expected, and has spurred new hopes that the government, which owns 500 million shares in GM, could finalize its exit by the end of the next year.
Obama hopes to seize on the positive IPO by making his first domestic trip since the election to visit a plant that manufactures components for hybrid vehicles. Obama, along with Vice President Biden, will visit the Kokomo, Ind. plant on Tuesday.
“Just as I had faith in the ability of our automakers to persevere and succeed, I have faith in the American people to persevere and succeed,” Obama said Thursday.
But there is not guarantee that General Motors will be able to make a complete comeback from a painful bankruptcy and government intervention that saddled the company with a battered reputation as “government motors.”
Similarly, it is unclear whether Obama’s intervention with the automakers will help him in the 2012 presidential race, where several states in the industrial heartland will be critical to his reelection. In this year’s midterm election, Democrats lost scores of seats in Ohio, Pennsylvania, Illinois, Indiana and Michigan, which all have auto plants.
Republican leaders who have repeatedly criticized Obama’s efforts to help the automakers did not back down Thursday from their criticism.
“The government's reaction to General Motors and the bailout from the government I think could have been handled in a more orderly way by a bankruptcy judge without the heavy hand of the Federal Government in the midst of it,” said incoming House Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio).
He said common taxpayers burdened with government debt have been hurt by the administration’s actions.
“When you look at the people who lost because of the government's actions, we're talking about tens of thousands of Americans who were punished as a result of the government's actions,” he said.
The administration sees the auto bailouts as one of the most tangible examples of success stemming from its action to boost the economy during the last two years.
U.S. auto companies, Obama said Thursday, are “once again on the rise.” He pointed to the operating profits both Chrysler and GM have managed in recent quarters, and applauded Ford’s resurgence, too. Ford is the only one of the automakers that did not receive a government bailout.
Some Republicans said that while they still opposed the terms of the bailout -- in particular, the GOP had opposed a deal wiping out GM's obligation to many secured creditors -- they were hopeful for the company.
“Hopefully, this will be a complete success in the end, and if it is, that's good for GM,” Sen. Orrin HatchOrrin Grant HatchLobbying world Congress, stop holding 'Dreamers' hostage Drug prices are declining amid inflation fears MORE (R-Utah) said Wednesday on MSNBC. “It's probably good for those who are workers at GM, and, hopefully, it's good for our country as well.”
But other GOP figures continued to decry the government action. The news about GM, said Texas Gov. Rick Perry (R) on Thursday, is “probably a good exhibit of why the government should not be involved in the private sector.”