Posted on 07/20/2012 5:51:00 PM PDT by madison10
General Motor Co's (GM.N) underfunded pension plan has found a buyer for its illiquid private equity assets - the Chinese government, which is willing to pay between $1.5 billion and $2 billion, the Financial Times reported on its website...
(Excerpt) Read more at reuters.com ...
Irony..............
Those union boys and girls will LOVE this.
China bailing out Obama’s GM union pensions 3 months before the election. There’s another 50,000 votes in swing states and $25 million campaign donations from thankful UAW officials.
So China will buy the quality (but not mature) 10 year bonds the GM pension funds holds,...at a discount because the fund needs cash?
Can you explain the implications?
China is now PARTNERS in all GM factories in China. Now China controls the pension fund : )
Both Ford and GM are trying to reduce Pension Liabilities by asking early retiree's and retiree's to take a lump sum Cash or in Ford's case stay aboard the Pension or in GM's case take one of 2 annuity options with Prudential.
GM is trying to jettison all of it, Ford is going a little slower.
My guess this illiquid stuff is still valuable, and who has cash? The Chinese. They are now buying stakes or becoming whales(?) to these Funds.
Ohhhh, crap...China just TAKES the pension fund, without so much as a never mind to retirees. This is not just in China, right? This is the WHOLE pension fund?
“This is the WHOLE pension fund?”
Yes.
” My guess this illiquid stuff is still valuable, and who has cash? The Chinese. They are now buying stakes or becoming whales(?) to these Funds. “
Once again....yep.
Is that really what’s happening? China is buying assets which will then boost GM’s pension fund. The fund really won’t change hands, will it?
I’m back to Oh, crap. Thanks for the insight.
China is buying many US companies through various back doors. This way, they don’t need any government approvals over here.
* Buy-out options offered to employees ( see post 8), They will get rid of all this liability, where as Ford still would carry some with their plan.
* Sell assets in Pension Plan to Payout either in Cash or to buy an Annuity or Annuity w/ survior benefits.
* The Liability is then eliminated by paying out in Cash ( all Liability to invest is w/ the Retiree) or the purchasing of an Annunity Contract of which GM has no Liability, the contract is then between Retiree and Prudential.
But GM needs cash to do these options, ergo sell these "funds" to do it, to the Chinese...
Thanks. The buy-out offered to retirees was only offered to white collar workers. GM may be considering offering the retiree buy-out to hourly, but no one is sure yet.
May be why they are looking for more liquid cash, right?
General Motor Co's (GM.N) underfunded pension plan has found a buyer for its illiquid private equity assets...
Thanks, I’m gonna have to do more homework to really understand what’s up.
I don't think so..
When they took contract law back 800 years and invented a new type of bankruptcy, the Hourly UAW pension stayed on, and they got an equity stake i.e GM stock to fund their pension. They need the stock
I don't think so..
When they took contract law back 800 years and invented a new type of bankruptcy, the Hourly UAW pension stayed on, and they got an equity stake i.e GM stock to fund their pension. They need the stock
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