Obama and Akerson Take a Bow as GM Hits Another Milestone
DETROIT ( TheStreet) -- Now for GM
After the closing bell Thursday, the automaker will rejoin the S&P 500 as well as the S&P 100 index. The prospect prompted the Treasury to say Wednesday that it will sell 30 million shares, while the United Auto Workers Retiree Medical Benefits Trust will sell 20 million. Being in the S&P 500 is a plus for companies because index funds buy all of the stocks in the index.
GM shares hit a milestone on May 17, closing above the IPO price of $33 for the first time since May 4, 2011. The IPO took place in November 2010. GM shares closed Wednesday at $34.02, down 94 cents. The shares are up 15% this year.
More milestones are in GM's path. Perhaps this year the automaker's debt will restored to investment grade, after being rated as junk since 2005. By early next year, the U.S. Treasury will have sold its remaining shares. And perhaps one day, GM will return to the list of 30 stocks in the Dow Jones Industrial Average . It was kicked out in June 2009 as it entered bankruptcy.
While hurdles remain, can anyone really doubt that GM is well on its way to restoration as a blue chip company or that its bankruptcy was a successful one or that the decisions by presidents Bush and Obama to bail the company out were good ones?
Sometimes it seems that the story of the GM turnaround gets lost in the shuffle.
The Chrysler story is also impressive, although it hasn't quite captured our imaginations like Ford. In 2009, the U.S. government basically gave up on Chrysler, which was widely believed to have finished out the last of its nine lives. The thought was that if only the company could be propped up with a government bailout for a few years, avoiding a shutdown in the midst of the worst recession in 60 years, that would represent success.
In the desperate search for a buyer, no American stepped forward. So Fiat's Sergio Marchionne saved Chrysler.
Unfortunately, the GM story got tied up with our caustic political environment. No doubt a comment about "government motors" will at some point be added at the end of this story, part of a new age of journalism in which we measure success by the numbers of hits and comments.