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China swoops down on GM pension plan's assets: FT
Reuters ^ | July 18, 2012

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 ...


TOPICS: Business/Economy; Foreign Affairs; Government; News/Current Events; US: Michigan
KEYWORDS: assets; china; gm; gmpension; michigan; outsourcing; pensions; uaw

1 posted on 07/20/2012 5:51:06 PM PDT by madison10
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To: madison10

Irony..............


2 posted on 07/20/2012 5:53:25 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: madison10

Those union boys and girls will LOVE this.


3 posted on 07/20/2012 5:57:22 PM PDT by Cyclone59 (Obama is like Ron Burgundy - he will read ANYTHING that is on the teleprompter)
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To: madison10

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.


4 posted on 07/20/2012 5:58:29 PM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: madison10

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?


5 posted on 07/20/2012 5:59:23 PM PDT by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: stephenjohnbanker

Can you explain the implications?


6 posted on 07/20/2012 6:00:38 PM PDT by Silentgypsy (If you love your freedom, thank a vet.)
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To: Silentgypsy

China is now PARTNERS in all GM factories in China. Now China controls the pension fund : )


7 posted on 07/20/2012 6:06:54 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: Navy Patriot
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?

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.

8 posted on 07/20/2012 6:11:07 PM PDT by taildragger (( Palin / Mulally 2012 ))
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To: stephenjohnbanker

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?


9 posted on 07/20/2012 6:12:34 PM PDT by madison10
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To: madison10

“This is the WHOLE pension fund?”

Yes.


10 posted on 07/20/2012 6:16:08 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: taildragger

” 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.


11 posted on 07/20/2012 6:18:01 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker

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?


12 posted on 07/20/2012 6:20:17 PM PDT by madison10
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To: stephenjohnbanker

I’m back to Oh, crap. Thanks for the insight.


13 posted on 07/20/2012 6:21:21 PM PDT by madison10
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To: madison10

China is buying many US companies through various back doors. This way, they don’t need any government approvals over here.


14 posted on 07/20/2012 6:25:11 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: madison10
No, this is what I think is going on...

* 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...

15 posted on 07/20/2012 6:28:33 PM PDT by taildragger (( Palin / Mulally 2012 ))
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To: taildragger

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?


16 posted on 07/20/2012 6:33:03 PM PDT by madison10
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To: cripplecreek; AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; ...

Thanks madison10.
General Motor Co's (GM.N) underfunded pension plan has found a buyer for its illiquid private equity assets...

17 posted on 07/20/2012 6:35:55 PM PDT by SunkenCiv (https://secure.freerepublic.com/donate/)
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To: taildragger

Thanks, I’m gonna have to do more homework to really understand what’s up.


18 posted on 07/20/2012 6:44:34 PM PDT by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: madison10
GM may be considering offering the retiree buy-out to hourly, but no one is sure yet.

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

19 posted on 07/20/2012 6:46:31 PM PDT by taildragger (( Palin / Mulally 2012 ))
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To: madison10
GM may be considering offering the retiree buy-out to hourly, but no one is sure yet.

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

20 posted on 07/20/2012 6:46:39 PM PDT by taildragger (( Palin / Mulally 2012 ))
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To: Oldeconomybuyer

Succinct.


21 posted on 07/20/2012 6:49:47 PM PDT by the invisib1e hand
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To: taildragger

I think that pension set up (GM stock) is for those that were still working and building up pension when GM went into “bankruptcy” and are still working or retired after the bankruptcy. I’m talking about those that are/were already retired. Don’t take my word for this, I’m still trying to figure it out.

Thanks.


22 posted on 07/20/2012 6:51:59 PM PDT by madison10
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To: madison10
My guess is that the early buy outs and other gimmicks apply only to white collar / non union employees - those which involve a contract between employer and employee.

Sounds like this sale involves the union slugs' account - based on a contract between the employer and the union.

In the first instance the employer wins (happened to me) but, in the second instance, replacing "employer" with "investor" might be interesting.

23 posted on 07/20/2012 7:27:08 PM PDT by norton
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To: norton

PING PENSION BUYOUT


24 posted on 07/20/2012 8:39:17 PM PDT by TNoldman (AN AMERICAN FOR A MUSLIM/BHO FREE AMERICA.)
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To: madison10

China must be pretty damned certain that the US government will bail the GM pensioners out. Unfortunately, they’re probably right so there’s almost zero risk for them.


25 posted on 08/02/2012 5:35:18 AM PDT by Rockitz (This is NOT rocket science - Follow the money and you'll find the truth.)
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