The Obama administration appears to be in the final stages of engineering a takeover of bankrupt General Motors that would turn the company over to a combination of worker leaders and government officials.
Under the plan being developed by GM’s current chief executive, Fritz Henderson, the United Auto Workers would end up owning 39 percent of the restructured GM, with the UAW agreeing to take common stock instead of cash to pay off half the $20.4 billion that GM owes the UAW workers fund to pay pension and health benefits to retired GM workers, according to the Wall Street Journal.
The plan also calls for the U.S. Treasury to give GM an additional $11.6 billion in bailout loans, on top of the $15.4 billion the government has already given.
In return, the Treasury expects to pick up at least half the ownership of GM, as payment for half the outstanding bailout funds that will total $27 billion by the time the deal is done.
So, when the deal is completed, GM will be 89 percent owned by the government and the union.
The clear losers are the current holders of GM stock and the creditors of GM.
Henderson has threatened to file for bankruptcy unless GM’s creditors agree to settled for 10 percent of the company.
This would leave the current GM stockholders with less than 1 percent of GM common stock.
The Wall Street Journal commented that the government owning 50 percent of GM or more “would turn GM into a sort of Government Motors, making the federal government the company’s de facto boss and bank lender.”
Ironically, the Obama administration’s heavy-handed insistence on transforming GM into a European-style automaker owned by government and workers may have increased the likelihood GM will be forced into a late-May Chapter 11 bankruptcy filing.
An ad hoc committee of GM bondholders called the proposal “neither reasonable nor adequate,” characterizing the offer as a “blatant disregard of fairness for the bondholders who have funded this company.”
The GM bondholders asserted the proposal being floated by the Obama administration and the current GM management “amounts to using taxpayer money to show political favoritism of one creditor over another.”
Red Alert’s author, whose books “The Obama Nation” and “Unfit for Command” have topped the New York Times best-sellers list, wrote that at the end of last week, the bank crisis appeared nowhere near finished, with more pain yet to come in a global recession that may have a long time to go before economic recovery.
Corsi received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.
In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.
For more information on bankruptcy plans for GM and Chrysler and for financial guidance during difficult times, read Jerome Corsi’s Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, “The Obama Nation.”
Mish’s Global Economic Trend Analysis: GM to Become “Government … – Even without a majority stake, the government was able to use its muscle in March to oust GM Chief Executive Rick Wagoner. But such a major holding would turn GM into a sort of Government Motors, making the federal government the …
Government Motors’ Choice: Green Cars or Greenbacks? – Henry Payne … – Tuesday, April 28, 2009. Government Motors’ Choice: Green Cars or Greenbacks? [Henry Payne]. Should it happen, the General Motors/Treasury proposal to give majority control of America’s biggest automaker to the federal government would …
Ed Driscoll » Updates From Government Motors – The federal government and the workers will own one of our largest and most storied industrial companies. That has never really happened before. In other words, the governmental restructuring of General Motors is a social experiment …
The Violence Worker!: Government Motors – General Motors is finished. If the deal goes through as planned, General Motors will die on the vine. Chrysler is also headed fro the scrap yard. While I am a lousy prognosticator, I just can’t believe Fiat or any other…
Zero Hedge: Government Motors To Force Over 1000 Dealers To Close – Government Motors To Force Over 1000 Dealers To Close. Just out from the Associated Press. Not sure how this gets done in practice absent massive state-specific lawsuits. Also, some good insight on why Obama being the biggest …
No Runny Eggs » Blog Archive » Government Motors to axe Pontiac … – In case you missed all the news about General Government Motors yesterday, let’s recap (courtesy Investor’s Business Daily): GM will drop Pontiac as a brand, 8000 jobs, and 2600 dealerships by next year. I suppose the good news is the …
GM, Now Government Motors | NEOAVATARA – General Motors presented a plan to restructure the company, with some surprising and controversial steps to decrease its debt. First, GM plans to cut 23000.
Is it going to be ‘Government Motors’? – Investor’s Iraq Forum … – The Wall Street Journal commented that the government owning 50 percent of GM or more “would turn GM into a sort of Government Motors, making the federal government the company’s de facto boss and bank lender.” …
GM to Become “Government Motors” | The Money Blogs – The clock is ticking for GM. If an agreement with the bondholders and the unions is not reached by June 1, GM is headed for bankruptcy court. If the deal is approved as currently on the table, the Treasury department would become GM’s …
Government Motors – Henry Payne – Planet Gore on National Review … – Government Motors [Henry Payne]. Detroit, Mich. — “If the government now has a 50 percent equity stake in GM, how do you feel about being a nationalized company?” asked an on-the-ball British newspaper journalist in General Motors CEO …
“Chuckie D” speaks: GM – “Government Motors” – So we could have a “government owned” (nationalized) auto company and a “union owned” auto company; which raises some interesting questions: 1/ If GM (Government Motors) continues to fail and lose money, will the government subsidize …
Government Motors – Dodge Nitro Forum – GM’s latest plan would cede control to US Posted Tuesday, Apr 28, 2009, 12:32 pm in Employee News The US Treasury Department would own a majority.
implode-explode.com – Implosion News Pick-ups: GM to Become … – GM to Become “Government Motors”. (blogspot.com). Search IEHI news archive: Enter your search terms. Web, IEHI. Submit search form. 2009-04-28. “The clock is ticking for GM. If an agreement with the bondholders and the unions is not …
Mover Mike » Government Motors – Government Motors. Posted on April 28th, 2009 by MoverMike. It looks like the bondholders of General Motors totaling $27 Billion will end up with 10% of the reorganized auto company. The U.S. which has $15 Billion at risk will get 50% …
Lake Minnetonka Liberty: Government Motors kills off 21000 jobs … – Government Motors, Obama Motors, General Motors, Marxist Motors, whatever the hell… big, bloated, Socialist government just created 21000 lost jobs. They do that very well, particularly under the leadership of the president, you know, …
GM (Government Motors) Closes Pontiac and Saturn. – I’m sure you all have seen the news, but really closing entire divisions especially these two which actually have a loyal following amoung younger.
Government Motors prepares for massive layoff « Right Minded Online – Judging by the recent performance of the Government Motors Corporation, I don’t think President Obama would have made it as a big-time CEO. The Community Organizer in Chief, who currently serves as the de facto CEO of Government Motors, …
JSMiles: Government Motors: GM and the Socialist Experiment – GM, once the symbol of American manufacturing might, is selling itself to the Federal Government and to the United Auto Workers. So, we will get to see how Uncle Sam and a union that bankrolls the Democratic Party run a…
linkfilter.net – fresh links daily – G.M.: Government Motors · government. Link #145483 submitted by Mac on Apr 27, 2009 07:04pm. (+100XP) http://www.detnews.com/article/20090427/AUTO01/904270396/Treasury+w… The U.S. Treasury Department would own a majority stake in General Motors Corp., have the right to appoint all of its directors and have veto power over all shareholder actions under the company’s new restructuring plan unveiled today. This link was last accessed on …
Government Motors – Theater of the Absurd | The Lonely Conservative – General Motors is rapidly turning into a really bad joke. But the joke’s on their bondholders and taxpayers. This just exemplifies why government has no business getting involved in business.
Winnipeg Auto Com
http://seatbealt.blogspot.com/2008/11/classic-autos.html
www.wpgauto.com
