Source: The Associated Press

General Motors, the corporate titan that collapsed into bankruptcy only to be saved by Canadian and U.S. taxpayers, returned to life as a public company Thursday in North America’s largest initial public offering worth US$23 billion.

The shares headed higher in New York and Toronto, less than a year and a half after a restructuring that saw the company receive billions of dollars from the U.S., Canadian and Ontario governments, close factories, slash jobs and shed billions in debt on both sides of the border.

“It is a great day for everyone with a stake in GM: employees, retirees, dealers, suppliers, taxpayers and yes, new shareholders,” GM chief executive Dan Akerson told a conference call with reporters Thursday morning.

“Going public is an important milestone on our way to being a new and different and better GM.”

Akerson said the company will be judged on its cars going forward.

“At the end of the day, the quality of the products and the design of the products will rule in the marketplace and that is where we intend to participate,” he said.

In Ottawa, Finance Minister Jim Flaherty said the participation of the two Canadian governments in one of the biggest bailouts in corporate history — they sold about 35 million of their shares in Thursday’s IPO — helped preserve and restructure the Canadian auto sector.

“This was a very difficult decision to make, but it was necessary in order to avoid the significant harm that would have been done to the company’s employees, their families and their communities,” the minister said in a statement late Thursday.

“The recovery of the automotive sector over the past year demonstrates that the financial assistance provided by governments has had the desired effect in terms of protecting Canadian jobs, now and for the future.”

Tony Faria, co-director of the automotive research centre at the University of Windsor, said a revamped GM has done well in cutting costs and improving its line up.

“They have brought out a lot of really quality new vehicles,” said Faria, noting that GM is now competing in both quality and fuel efficiency with the Japanese car makers.

But, he noted, the company must not become complacent.

“They have to keep doing all of these things,” he said. “It takes a long time to fully change.”

On the floor of the New York Stock Exchange, a crowd eight deep jostled around the company’s trading post, adorned with its familiar blue-square logo with an underlined “GM.”

Akerson rang the opening bell as raucous cheers went up and the sound of a Chevrolet Camaro’s revving engine echoed through the room.

In Toronto, GM Canada president Kevin Williams and Carol Stephenson, a business academic who represents the Canadian and Ontario governments on the General Motors board, were joined by CAW national president Ken Lewenza to help kick off trading on Toronto Stock Exchange, where GM shares also began trading Thursday.

The company’s bankruptcy in June 2009 wiped out its shareholders along with $27 billion in bond value and saw the U.S. government take a majority interest, giving GM the nickname: “Government Motors.”

Since then, the giant automaker has streamlined its products, brought in new smaller and more fuel efficient cars popular with drivers and is expanding its share of key Asian markets in India and China. The company is also putting its future in its Volt electric car and other new technologies.

Once, the world’s biggest car producer, GM closed 14 of its 47 plants — including some in Ontario — shuttered or sold off its Hummer, Saturn, Saab and Pontiac brands, and slashed its debt from about $46 billion to about $8 billion.

Union retiree health care costs are now the United Auto Workers’ responsibility, and the controversial jobs program that paid idled workers almost a full salary has been scaled back dramatically.

Chief financial officer Chris Liddell said the company aimed to be debt free.

“We used to be a $100-billion finance company and a $100-billion pension plan with a small car company attached. We have to get away from that sort of model,” Liddell said.

“We have to get back to making cars and having that driving the economics of the business.”

GM employs 209,000 people in the United States today, down from 324,000 in 2004. But it’s making money. Before bankruptcy, GM lost about $4,000 per car. Now it makes about $2,000 each.

However, the verdict is still out on whether the company’s new management and autoworkers union will co-operate enough to ensure continued success.

With its successful return to the stock market, GM must now focus on making and selling cars that people want to buy.

Akerson said the company is turning its attention to building smaller, more fuel efficient cars.

“We’re trying to make a real strong thrust into the low end of the market,” he said.

Lewenza, head of GM Canada’s largest union, encouraged the federal and Ontario governments to hang on to their GM shares because they could be worth more in the future.

“The best choice for taxpayers and Canadian workers would be for government to retain a significant portion of its shares, to help ensure that the company maintains its Canadian manufacturing footprint and preserves Canadian jobs,” Lewenza said in a statement.

“Government assistance averted what could have been a disaster in several regions of the country, and helped preserve the government’s own tax base. In the end this will be a good deal for workers, for the economy, and for taxpayers.”

The shares (NYSE:GM) traded at US$34.26 in New York and were at US$34.01 in Toronto (TSX:GMM.U) at the close of trading Thursday, a gain of more than three cent on a volume of 7.1 million shares.

GM set a price of US$33 per common share on Wednesday, at the high end of a range that had already been increased due to demand for the stock.

The U.S., Canadian and Ontario governments and other owners raised a total of US$18.2 billion by selling some of their shares at the IPO price. GM raised another US$5 billion by selling 100 million preferred shares at US$50 each.

In the stock offering, the U.S. government made US$11.8 billion by selling 358 million shares at $33 apiece. The U.S. Treasury stands to make US$13.6 billion if bankers exercise options for up to 412 million shares, as planned. The government would still have about 500 million shares, a one-third stake. It would have to sell those shares over the next two to three years at about US$53 a share for U.S. taxpayers to come out even.

The reduced government stake should help repair the company’s image, which had been tarnished by accepting the bailout money, Akerson told reporters.

“They have taken their ownership down by roughly half,” he said. “I would say that the average taxpayer in the United States would look at this particular transaction as very positive.”

The Canadian and Ontario governments had owned a combined 11.67% of General Motors that they received as part of its C$10.5-billion contribution to last year’s bailout of the automaker. They reduced that stake to below 10% by selling about 35 million shares.

Canadian Industry Minister Tony Clement and Flaherty have said they’re in no hurry to sell more GM shares at this time, since they’ve been advised the stock may be worth more in future.

GM had reserved some of its new stock for employees, retirees and car dealers to buy at the offering price. The company did not reveal how many people took the offer, but Liddell suggested it was short of the full 5% that was set aside.

Williams, who was appointed to head GM’s Canadian subsidiary in March, said the company recognizes the opportunity that people in both countries have given General Motors and the need to prove itself.

“General Motors is a much leaner, much faster organization,” Williams in an interview with BNN, a specialty business cable channel.

“We’ve looked at every part of the business and restructured it for success. We’ve driven our cost structure to the lowest point in a very long time and we’ve put the company in position for sustainable growth going forward.”

with files from the Associated Press