GM’s Road from Bankruptcy to the NYSE

General Motors has definitely suffered its ups and downs over the past year. From having to file for bankruptcy and let go of some major vehicle brands last summer, to seeing a major profit in recent months, the company has managed to rebound quite nicely after more than a year of turmoil.

As it improves its business, GM is making attempts to sell more cars and even get back on the New York Stock Exchange in hopes of rebuilding and getting back on top of the auto industry.  While the road there may be a bit bumpy, it looks as though the manufacturer may just get its wish.

Top Auto Manufacturer to Bankruptcy

If you’re at all familiar with General Motors history then you know this company had been on top for a while. Getting its start in 1908 in Flint, Michigan, General Motors Company quickly became known as one of the “Big Three” auto manufacturers along with Ford and Chrysler.

Over the years, the company acquired numerous automakers, including Buick, Oldsmobile, Cadillac, Pontiac, Chevrolet, Saturn and Saab. It was also the largest U.S. automaker and the world’s second largest for 2008 by sales.

So how did the company go from being one of the best in the world to having to file for bankruptcy?

According to experts, one major reason for the company’s failure was its inability to remain competitive against foreign car manufacturers like Toyota, which not only produced stylish cars, but also had fewer mechanical problems. Some also say that the company overproduced SUVs and therefore had tons sitting on dealer lots that simply weren’t selling.

As a result, the company was forced to file for a Chapter 11 bankruptcy, which is also known as a restructuring or reorganization of the business, on June 1, 2009. On July 10 of the same year, the bankruptcy was completed and the company was essentially handed over to the U.S. Treasury.

The Auto Bailout

Once the company went bankrupt, President Barack Obama determined General Motors, among many other companies struggling during this time, was too big to fail. it received nearly $60 billion in government loans under the Troubled Asset Relief Program (TARP) as an auto bailout.

However, in order to properly restructure, GM would have to make repayment of the TARP loans a part of their long-term strategies. One of the changes the company made was to drop a number of its once-leading vehicles.

This meant Hummer, Saab, Saturn and 100-year old Pontiac all had to go.

TARP Payback and $1.3 Billion Profit

After months of regrouping, GM said it was able to repay the TARP funds and later made an impressive profit. In April 2010, the company announced it had repaid its multi-billion dollar loan from the government “in full, with interest, ahead of schedule” because of its rapid car sales.

However, Fox News and other media outlets revealed the automaker actually hadn’t paid the funds back through car sales and had instead repaid the money by withdrawing from another TARP fund with the Treasury Department.

So were the profits real then? In August 2010, the company announced that it had brought in $1.3 billion in profits in the second quarter of this year. So far, no one has disputed the earnings, which equated to $33.2 billion in revenue.

Subprime Business and the NYSE

As a way to continue its progress, GM is making attempts to sell more cars and get people to make more investments in its business.

For months, it attempted to get back into the subprime business because it would then be able to sell cars to a larger consumer base. However, Ally Financial Inc., which had taken control of its financing business, was not fond of risky auto loans.

After a huge effort from the company, it was able to acquire AmeriCredit Corp. and begin the process of presenting car financing options to subprime borrowers.

Another major move that the company made was announcing its proposal to go public later this year and sell shares on the New York Stock Exchange. A big share seller prior to going bankrupt, it hopes to offer common General Motors stock (NYSE: GM) as a way to repay the second TARP loan.

GM Sees Major Sales Loss in August 2010

The latest in General Motors news is that despite making major improvements, the company had a very difficult month in August 2010. Seeing its largest drop in sales in 27 years, GM suffered a 25 percent decline from only a year prior.

Experts say a number of issues hurt the company’s sales, including the Cash for Clunkers program, the sale of GM brands and the fact the consumers are simply too nervous to buy in an uncertain economy.

Despite the struggles the company has seen, it has managed to bounce back quite nicely. While there is still likely to be a long road to recovery, it is possible. A good recovery means jobs for Americans and an improved economy, so let’s hope the recovery is steady and successful.