November 18, 2010 / 8:53 PM / in 7 years

Obama, Biden head to auto city in wake of GM IPO

* Gibbs happy to “I told you so”

* Obama to visit an auto plant

By Patricia Zengerle

WASHINGTON, Nov 18 (Reuters) - President Barack Obama and Vice President Joe Biden will both travel to an Indiana city that is home to several automobile plants next week, the White House said on Thursday, in the wake of General Motors’ successful stock offering.

The trip to Kokomo, Indiana, will take place on Tuesday, Nov. 23. Major employers in Kokomo include Chrysler LLC and the auto parts supplier Delphi Corp.

General Motors shares shot up as much as 9 percent on Thursday as investors bet that the top U.S. automaker can make a lasting recovery as it returns to private ownership after a blockbuster initial public offering.

The start of trading in GM shares was one of the final steps in an IPO process negotiated by the Obama administration that raised $20.1 billion in common and preferred shares, making it the biggest IPO in U.S. history, and helping to justify the administration’s industry bailout.

“The government’s stake in a rescue efforts prior to today’ IPO was 61 percent reduced down now to 26 percent,” White House spokesman Robert Gibbs told a news briefing.

“We continue to be on track to recoup the entire investment made by the Obama administration in the survival of GM and Chrysler and, quite candidly, the entire domestic auto industry,” he said.

Obama, who was to make a statement on General Motors later on Thursday, will visit an auto plant when he is in Kokomo, an administration official said.

“In recent years, Kokomo has been hard-hit by devastating plant closing and layoffs, but with the help of the Recovery Act and the Administration’s auto restructuring plan, Kokomo is on the rebound today and unemployment has dropped by nearly 8 percentage points since mid-2009,” the administration said in a statement.

It said a new hybrid vehicle component manufacturing plant has opened in Kokomo with the help of a grant from Obama’s Recovery Act economic stimulus program. Chrysler, which was also part of the auto industry bailout, has invested $300 million in its Kokomo plant, which has helped retain more than 1,000 workers, the White House said.

Gibbs said the successful IPO put the lie to those who had scoffed at the bailout plan.

“It is hard to look at where we are today and think that it is anything other than a successful idea and good news,” Gibbs said. “... I‘m happy to do the ‘I told you so.'” (Editing by Chris Wilson)

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