Bloom: Chrysler IPO in 2011, GM in 2010

Ron Bloom, the new chairman of President Obama’s auto taskforce, told reporters that he doesn’t think an Initial Public Offering of stock in the newly restructured Chrysler Group LLC will happen in 2010 as some had previously predicted. He thinks the following year is more likely, according to the Detroit News:

He said he doesn’t expect Chrysler to offer shares of stock for sale until 2011 through an initial public offering.

“I don’t think Chrysler’s IPO is a 2010 event,” Bloom told reporters on the sidelines of the Center for Automotive Research’s Management Briefing Seminars here. “I think it’s a little further off.”

He said a decision on the timing will be up to Chrysler’s board.

But he did say that he still expects the new General Motors to begin to offer stock to the public sometime in 2010. The importance of this is that it allows the government and the union’s VEBA healthcare trust fund to begin selling off their shares of stock in the companies, returning them as soon as practical to being fully publicly owned companies.

Bloom said that the selling off of the government’s nearly 61 percent stake in GM will require at least three separate sales with six months between them. Selling off that much stock all at once would cause the value of the stock to plunge. That means the earliest the government could get its investments paid back by selling off GM stock is late 2011 — and that’s assuming the stock is selling at an adequate price to recoup the costs of the tens of billions of dollars in taxpayer dollars invested in the restructuring.

The UAW will similarly have to sell off its stake in the two companies over the next two to three years because it has to replenish around $15 billion in the healthcare trust fund in order to cover the costs of medical care for all UAW employees after 2010.