GM Laying Groundwork for IPO, Showcases New Products and Concepts

On Tuesday, General Motors Company’s vice chairman, Tom Stephens, said the automaker plans to launch a compact Chevy SUV in several global markets. During a presentation of GM’s future product plans held at its technical center in suburban Detroit, Stephens told industry analysts that the new vehicle will be based on the company’s global compact vehicle platform.

In addition to showing pictures of the vehicle (which were not released to the media), analysts also got a glimpse of an SUV concept vehicle designed by the automaker’s South American division and a small car concept vehicle – both sporting the Chevy emblem. Stephens also showed a three-row van, bearing the Buick emblem, which will be marketed in China. No timelines were given for the launch of any of the vehicles.

GM’s chairman and CEO, Ed Whitacre, along with other top executives, joined the all-day conference calls to discuss the automaker’s current operations. The discussion included GM’s European restructuring as well as the company’s operations in other markets and its 85% capacity use in the U.S. and Canada.

The U.S. Treasury Department currently owns a controlling 61% share in GM. Two individuals with privileged knowledge about GM’s upcoming public offering say the Treasury Department may sell as much as 20% of its holdings through the sale, making it a minority shareholder.

Whitacre told the gathering, “We are not re-introducing GM. We are introducing a new GM.” He also said the company’s management team (which has undergone repeated shakeups over the past year) is executing well and that the company is positioned to break even despite potential lulls in demand.

According to a May 20 report by JP Morgan Chase & Company analyst, Eric Selle, GM’s equity is valued at $70 billion. Selle predicts GM’s current bondholders will see a return of 47 cents on the dollar, which will be converted into warrants and common stock in the new GM. At current bond prices, Selle valued GM’s equity at about $47 billion.

During the first quarter of 2010, GM reported net income of $865 million and operating profit of $1.2 billion. Cash flow for the quarter reached $1 billion and revenue climbed to $31.5 billion, up 40% compared with the same three month period a year earlier.

On May 17 the company’s CRO, Chris Liddell, called the report a “good, useful step” toward positioning the company for an IPO.

GM has also announced a plan to reduce production capacity and eliminate 8,300 jobs at its Opel and Vauxhall operations in Europe and the U.K. During the first quarter of this year, the brands lost a combined $506 million.

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