Posted on 04/29/2009 9:06:28 PM PDT by St. Louis Conservative
President Obama insisted at his press conference last night that he doesn't want to nationalize the auto industry (or the banks, or the mortgage market, or . . .). But if that's true, why has he proposed a restructuring plan for General Motors that leaves the government with a majority stake in the car maker?
The feds have decided they should own a neat 50% of GM, yet that is not the natural outcome of the $16.2 billion that the Treasury has so far lent to the company. Nor is the 40% ownership of GM that the plan awards to the United Auto Workers a natural result of the company's obligations to the union.
Yet Secretary Timothy Geithner and his auto task force, led by Steven Rattner, have somehow decided that Treasury and UAW chief Ron Gettelfinger will get to own a combined 90% of GM. If there's a reason other than the political symbiosis among the Obama Administration, Michigan Democrats and the auto union, it's hard to discern. From now on let's call it Gettelfinger Motors, or perhaps simply the Obama Motor Company, though in the latter they'd have to change the nameplates.
The biggest losers here are GM's bondholders. According the Treasury-GM debt-for-equity swap announced Monday, GM has $27.2 billion in unsecured bonds owned by the public. These are owned by mutual funds, pension funds, hedge funds and retail investors who bought them directly through their brokers. Under Monday's offer, they would exchange their $27.2 billion in bonds for 10% of the stock of the restructured GM. This could amount to less than five cents on the dollar.
(Excerpt) Read more at online.wsj.com ...
Who on earth would buy a car from a government owned GM? not I...would you?
The fed gov is controlled by Obama and the UAW is just another arm of the DNC. GM and Chrysler doesn’t have a chance. Of course, we taxpayers don’t either.
No. I would not buy a GUM ( government/union motors) vehicle.
In other words, We’ll be pumping billions of dollars of taxpayer money into GM for eternity.
No reason or desire to turn a profit or even break even. Taxpayers will put the books back in the black.
Will GUM become a non-profit?
GM is now Amtrak on steroids.
This is outright theft. Obama, Geithner, and the UAW are quite literally stealing General Motors Corp from its rightful owners in broad daylight.
Not me. The only “American” car I’ll buy now is a Ford (and they were already better than what GM and Chrysler put out).
I wonder how long before Dems complain that taxpayer money is buying GM commercials on Rush and other Talk Radio?????
You can tell Rush is having a harder and harder time being a GM cheerleader.
Gettlefinger: Just another nicely dressed commie.
No. Not even with a gun to my head. Twice now I have made that comment on two threads in two minutes.
It already is.
Furthermore, I don't see what's been done to make the new company more profitable than the old one. I'm still waiting for the other shoe to drop - when it's clear that they still can't make money, UAW and Obama will throw the workers' health and pension plans on the taxpayer, too. You Freepers that swear you'll never again buy a GM or Chrysler product - it doesn't matter whether you buy, you'll pay anyway. And with enough government subsidies, even a company run by incompetents can force Ford into receivership. Then Obama and UAW will own it, too.
BTW, with the announcement of the automakers' new owners, is GM common stock officially worthless now? Silly me, I thought owning stock meant you actually owned a piece of the company...
The Wall Street Journal has supported open-borders and the end result is Obama. The chickens have come home to roost.
The WSJ is a crap paper now and I will not be renewing it aftre 15 + years.
It already is.
Sorry, but I'm laughing my butt off reading that exchange... : )
The government tried to do the same thing under Clinton with the Smith & Wesson settlement, where it and the gun grabbers cooperated to try to turn S&W and the other gun makers into a cartel that could only sell guns people didn’t want to buy. S&W’s erstwhile customers fought back with a huge boycott. Former customers of Chrysler and GM should do the same. Otherwise Chrysler and GM will become a government owned cartel that’s too big to fail, meaning the government wills set out to regulate all the other auto makers into the same kind of straight jacket, with all of them forced by the government, the UAW, and the Watermelons to make matchbox cars people don’t want to buy.
After today, any Freeper who admits to buying an “American-made” auto should be banned for life. Others have been banned for much less.
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