Posted on 04/27/2009 2:37:46 PM PDT by Michael Eden
Game, set, and match to the Statists and the big labor agenda. From this point forward, the government will be deciding what cars are made, and the unions will literally be negotiating with themselves to determine how much theyll earn making them.
The government was able to buy it's way into total control of the auto industry for only a few billion dollars. A tremendous day for Statism, a dark day indeed for the free market and for individual liberty.
From the Associated Press:
DETROIT General Motors Corp. could be majority owned by the federal government under a massive restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand.This is about as blatant of a case of simultaneously talking out of both sides of one's mouth as there is. The government has no interest in running GM; they just want to be able to fire the company's GM and have the power to decide who is on the board of directors. You've got to give the Obama administration points for sheer chutzpah. And millions of political cuckolds are literally choosing to believe him rather than trusting their own lying eyes.The plan, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.
GM is living on $15.4 billion in government loans and said Monday in a filing with the U.S. Securities and Exchange Commission that it envisions receiving an additional $11.6 billion....
GM said that it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.
In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.
If both are successful, the government and UAW health care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, CEO Fritz Henderson said in a news conference at GMs Detroit headquarters.
Henderson said that although the government would own a majority of GMs outstanding common shares, the Treasury hasnt demonstrated interest in running the company, but would have someone on the board looking out for the taxpayers interest. The task force has directed current board chairman Kent Kresa to replace several board members.
There's a story entitled, "The Devil and Daniel Webster" that describes what can happen when one foolishly makes a deal with the devil. Unfortunately, the Jabez Stone stand-in (GM) won't have any Daniel Websters to confound Mr Scratch (brilliantly depicted by Barrack Hussein). The lesson of this story is that it's bad enough to do a deal with the devil; but never, NEVER, NEVER do a deal with the government. You can't win, and you won't even be able to lose with dignity.
The shareholders, the VEBA (health care trust) and the government would want to have a someone on the board of directors, he said.The dealer closings are not included in the job loss numbers sited at the beginning of this article, which will easily add well over one hundred thousand more jobs to the low-ball total cited at the beginning of the article.Deals with the UAW and the Treasury have yet to be finalized, he said.
The struggling automaker said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap. Henderson said the objective is to reduce GMs $27 billion of outstanding public debt by about $24 billion. The company estimates that after the exchange, bondholders would own 10 percent of the company.
That would leave current common stockholders with only 1 percent, GM said. Still, GM shares rose 34 cents, or 21 percent, to $2.03 in midday trading.
The plans, if successful, would reduce GMs debt by $44 billion from the present figure of about $62.4 billion.
We would be substantially less-leveraged as a company, Henderson said.
Kip Penniman Jr., an analyst with KDP Investment Advisors Inc., predicted the exchange offer would fail and GM will file for bankruptcy....
The company also said it plans to reduce its dealership ranks by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605. When asked how GM would accomplish that, Henderson would say only that the company would be making offers to the dealers in the coming weeks.
Mark LaNeve, vice president of North American sales and marketing, said a big chunk of the dealership reduction about 450 would come with the elimination or sale of Saturn, Hummer and Saab. GM would then look to end relationships with dealers that do only a small volume of business with GM, and then move on to other dealers, he said....
The same government that couldn't run a cafeteria without going millions of dollars into the red; the same government that still can't run a successful post office in spite of the numerous successful businesses that have sprung up all around it; the same government whose model for successful customer service is the Department of Motor Vehicles, is going to be teaming up with the very unions who ran the auto manufacturing industry out of business in the first place to build cars.
The auto industry today; the oil industry tomorrow. We don't need oil anyway. Just ask Senate Majority Leader Harry Reid: It's devil-juice, for sure.
I wrote an article around a youtube video entitled, "The Car That Will Save The Auto Industry (And The Planet!)." It's not a joke any more, given that we elected a bunch of totalitarian Statists to run our country.
Ever heard of the Soviet government-produced Lada? You haven't? Don't worry; you'll be getting a chance to own its American equivalent in just a few years.
Yes, but paying higher taxes to pay for your government supported competition is “change you can believe in.”
GM: the NEW “GSE” (after Fannie and Freddie) to lead the way to tomorrow’s disaster.
I was already set not to buy another GM car or truck again if I could avoid doing so. Ford got the Escape SUV working pretty well and I’ll be sticking with those as long as I can buy used ones in good shape.
Hitler: “And how do you get a regular-sized German family in such a subcompact car?”
"And can you make a special version, just for Jews? I'll show you where to put the exhaust pipe."
You know, I am sure Volkswagon just cringes every time these kinds of pictures surface. TO a lesser extent Mercedes Benz, as Volkswagon built ‘the peoples car’.
Never had one, never will. It is good not to own something that Hitler was excited about.
Actually it sounds like you and I will be paying for GM via our taxes for years to come...
A bizzaro world. A foreign entity has taken over our Government, and the US Constitution is no longer operative.
The Obama plan for GM is, like its author, putridly fascist.
Unless they are idiots, hamstrung by Obama, or both.
As Rush has said over and over, the auto manufacturers have been taken over by government and government is setting them up to be given to the UAW. A match made in heaven.
Not literally, but perhaps figuratively.
I will not buy another GM product again if this is the case
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Actually it sounds like you and I will be paying for GM via our taxes for years to come...
A bizzaro world. A foreign entity has taken over our Government, and the US Constitution is no longer operative.
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But, but, but, but, that would be taxation without representation. And the mainstream media said that nothing like that was going on when they attacked the tea party rallies.
Did you vote for this stuff? I don’t remember voting for this stuff...
Hell no, no way, no how, NEVER.
Hmmm. If the UAW owns GM, could Ford claim some kind of conflict of interest in having UAW workers at all? Maybe Ford should insist on splitting up the UAW?
United airlines redux...
The company will be toast. A lot of people will stop buying their cars out of principle. Few will buy on principle.
This is a joke, but really one in a long line of jokes.
I disagree.
I call it communism, and no, I didn't vote for it either.
Its been a silent coup; but after winning the Cold War, we've turned over the reins of our government to the reds...
Although it is true that we keep our real treasures in Heaven, and not on Earth (where moth and rust doth corrupt, and thieves break in and steal) ... It still sucks when you've been robbed.
Really? I agree. Reminds me of this:
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