GM stock sale won't end 'Govt. Motors' debate
Ammann: It’s “good for selling more cars.”
DETROIT -- Investors cheered General Motors' announcement last week that it will buy 200 million GM shares from the government. But what about car buyers?
GM executives contend that the $5.5 billion share purchase by year end -- and the U.S. Treasury's vow to sell its remaining 300 million shares by early 2014 -- are big steps toward transcending any "Government Motors" stigma.
It's "good for selling more cars," GM CFO Dan Ammann says. He said internal market research shows that government ownership has kept some buyers away.
GM dealers are mixed on that view.
Tom Durant, owner of Classic Chevrolet in Grapevine, Texas, one of the nation's highest-volume Chevy dealers, says the 2009 government bailout didn't faze his customers. "We just didn't see it," Durant says. "I think that's because we've got such a loyal group of customers."
Other dealers say the bad taste lingers for some consumers and will remain as long as the government has any stake in GM.
Last summer, Jim Stutzman, owner of Jim Stutzman Chevrolet-Cadillac in Winchester, Va., lost a fleet order of 30 Silverados because the chairman of the general contracting company didn't like GM's government-funded bankruptcy. Stutzman says he had sold hundreds of fleet cars and trucks to the company since the late 1980s.
"He just felt like purchasing our products would have been supporting a decision that he was totally philosophically opposed to," Stutzman said.
The company bought Ford pickups instead.
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