A consumer advocate group headed by Ralph Nader said Thursday that the U.S. Treasury should make GM suspend its planned IPO so that it might ensure a better return for taxpayers. The group said in a latter to President Obama that the administration has a fiduciary responsibility to approach the stock sale with caution and leverage the governments ownership to make strides on auto safety and fuel efficiency.
“The U.S. stake in GM obviously poses novel managerial challenges to the government. The appropriate response to those challenges, however, is not to run from the responsibility through passive ownership and premature sale at a loss to taxpayers,” the letter said.
One point argued by the group, is that as majority shareholder in GM, the government has the ability to direct or influence the company on investments, but as the government”s stake diminishes, as it will upon the start of the divestment process, so does its ability to influence such action.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)