General Motors is trying to shake its “Government Motors” tag off bit by bit, and the American carmaker has filed for an initial public offering (IPO) which could be worth as much as $16 billion, an insider told Bloomberg last week. GM didn’t reveal the number of shares that will be offered in the IPO or the price in a statement to the Securities and Exchange Commission.

According to people familiar with the deal, the IPO may be held in November, and the aim is to sell a fifth of the Treasury’s 304 million shares, cutting the government’s stake to less than 50%.

GM filed for Chapter 11 bankruptcy protection on June 1, 2009, after posting $88 billion of losses since 2004 (that was the last year the company reported an annual profit). The government stepped in with a $50 billion taxpayer bailout and as a result, the U.S. Treasury currently owns 61% of GM.

Things have looked up ever since. The company has just reported a Q2 2010 net income of $1.54 billion as vehicle sales and production increased, a 44% rise from the previous quarter. Revenue increased 44% from a year ago to $33.2 billion thanks to strong sales in China and popular models like the Chevrolet Equinox. However, GM’s European operations (Opel/Vauxhall) is consistently letting the side down – it lost $506 million in the first quarter.

Besides regaining legitimacy as a private company, the funds generated from the IPO will be channeled to revive Opel/Vauxhall and rebuild GM’s remaining domestic brands Chevrolet, Buick, GMC, and Cadillac. The Detroit carmaker has already offloaded Saab and wound down Hummer, Pontiac and Saturn brands.