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Government, UAW To Own 89% Of GM In Restructuring
Start Thinking Right ^ | April 27, 2009 | Michael Eden

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 they’ll 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.

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 GM’s Detroit headquarters.

Henderson said that although the government would own a majority of GM’s outstanding common shares, the Treasury “hasn’t 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.

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.

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.

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 GM’s $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 GM’s 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 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.

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.


TOPICS: Business/Economy; Government; Politics; Society
KEYWORDS: automakers; fascism; generalmotors; gm; government; lping; ownership; uaw
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To: tacticalogic

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.


41 posted on 04/27/2009 3:12:31 PM PDT by Michael Eden (Better to starve free than be a fat slave. Semper Vigilanis)
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To: Michael Eden

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.


42 posted on 04/27/2009 3:16:09 PM PDT by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: dfwgator

Hitler: “And how do you get a regular-sized German family in such a subcompact car?”


43 posted on 04/27/2009 3:17:11 PM PDT by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: Secret Agent Man
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."

44 posted on 04/27/2009 3:19:56 PM PDT by dfwgator (1996 2006 2008 - Good Things Come in Threes)
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To: dfwgator

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.


45 posted on 04/27/2009 3:23:51 PM PDT by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: truthandlife
I will not buy another GM product again if this is the case

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.

46 posted on 04/27/2009 3:25:18 PM PDT by El Cid (Believe on the Lord Jesus Christ, and thou shalt be saved, and thy house...)
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To: Michael Eden

The Obama plan for GM is, like its author, putridly fascist.


47 posted on 04/27/2009 3:26:49 PM PDT by Petronski (For the next few years, Gethsemane will not be marginal. We will know that garden. -- Cdl. Stafford)
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To: devere
Obviously the bondholders will insist on a bankruptcy filing...

Unless they are idiots, hamstrung by Obama, or both.

48 posted on 04/27/2009 3:27:48 PM PDT by Petronski (For the next few years, Gethsemane will not be marginal. We will know that garden. -- Cdl. Stafford)
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To: Michael Eden

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.


49 posted on 04/27/2009 3:28:49 PM PDT by kevinm13 (Tim Geithner is a tax cheat. Manmade "Global Warming" is a HOAX!)
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To: devere
Are they going to be sent to GITMO if they say no?

Not literally, but perhaps figuratively.

50 posted on 04/27/2009 3:29:40 PM PDT by Petronski (For the next few years, Gethsemane will not be marginal. We will know that garden. -- Cdl. Stafford)
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To: El Cid
Actually it sounds like you and I will be paying for GM via our taxes for years to come...

If that's the case then I should be able to go to the car lot and pick whatever GM product I want.

What's going to really suck about this is that the government will mandate discounted loans and rebates for certain elements of society. It will be just another form of reparations.
51 posted on 04/27/2009 3:30:18 PM PDT by randomhero97 ("First you want to kill me, now you want to kiss me. Blow!" - Ash)
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To: Michael Eden
This is exactly what I predicted would happen when GM got government bail out money. Obama is true to his ideology. The workers of the world will own the means of production. My next prediction is that the government will set about to (complete) the destruction of any legitimate competition to the worker's GM.
52 posted on 04/27/2009 3:31:41 PM PDT by Natural Law
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To: El Cid

I will not buy another GM product again if this is the case
- - - - -
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.

- - - - - - - - - - - -

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...


53 posted on 04/27/2009 3:34:40 PM PDT by Michael Eden (Better to starve free than be a fat slave. Semper Vigilanis)
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To: Michael Eden
My next family car (not truck) was going to be either a Caddilac CTX-V or a new Camaro .... after this plan?

Hell no, no way, no how, NEVER.

54 posted on 04/27/2009 3:42:14 PM PDT by Centurion2000 (We either Free America ourselves, or it is midnight for humanity for a thousand years.)
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To: KarlInOhio

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?


55 posted on 04/27/2009 3:42:33 PM PDT by slowhandluke (It's hard work to be cynical enough in this age)
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To: aliquando

United airlines redux...


56 posted on 04/27/2009 3:46:44 PM PDT by RobRoy
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To: edge10

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.


57 posted on 04/27/2009 3:50:18 PM PDT by RobRoy
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To: KoRn

I disagree.


58 posted on 04/27/2009 3:51:55 PM PDT by RobRoy
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To: randomhero97; Michael Eden
It will be just another form of reparations.

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.

59 posted on 04/27/2009 3:54:03 PM PDT by El Cid (Believe on the Lord Jesus Christ, and thou shalt be saved, and thy house...)
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To: tacticalogic
>>Now the other automakers are faced with having to pay taxes to fund their competition.<<

Really? I agree. Reminds me of this:


60 posted on 04/27/2009 3:56:23 PM PDT by RobRoy
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