So, GM plans to cut 21,000 jobs, close 13 plants, cut it's 6500 dealerships to half that, and kill the Pontiac line.
And then give the UAW 39% of the company, 10% to it's bondholders, and 50% to the government.
The bondholders aren't pleased and will likely kill the deal. I don't blame them.
Me? I'll miss the Pontiac line. It's been pretty much my main car for the last 10 years, in various forms. A shame they made it so boring.
Here's the thing, I don't think dumping the company on the union is a terrible move. I mean, they have more sway over decisions than anyone else, why not make them major partners? The government being the majority shareholder is a joke though. Would YOU buy government-made cars?
And there's 10% 1% (edit: stupid brain) missing.
Basically, the whole deal looks like a disaster in the making, where I'm sure the major banks will end up making a killing with their CDS holdings. Funny, isn't it, that the government would sacrifice the auto industry to save the banks.
Personally, I still think they should just let 'em fail. If bankruptcy protection doesn't work, then I'd expect some of those thousands of workers would get it in their head that they could buy up a factory or two and make better cars. There has to be some enterprising entrepreneurs out there dying to take a stab at making fuel efficient cars with lots of modern features that people actually want. They'd jump at the opportunity to buy up some fully functional factories and hire former union workers in a profit-sharing venture. But that would be... what's the phrase? Free market capitalism? Can't have that, can we?
Tuesday, April 28, 2009
That's One Solution For GM...
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5 comments:
I envision a lot of these lines will have to get bought up by someone.
No more jeeps would be unAmerican or something......
and the missing 10%? Your math sucks.....hahahaha
NEW AND IMPROVEMENT Govenment produced automobiles!
Now FEMA approved!
Olive drab Malibu's for EVERYONE!
Bullet Proof glass, and solid rubber tires optional.
funny statement I read from conservative brog HotAir
"Imagine you’re one of the bondholders of GM, the people who bought the automaker’s debt in order to invest in the company and keep it running over the last several years. Now that the company is near collapse, the Treasury offers you this deal. Even though you own $27 billion in GM bonds, you’d get 10% of the company. The UAW, which has a claim on $20 billion for its health-care and pensions obligations, would only have to sacrifice half of that to get 39%. The feds, who will invest another $9 billion to bring their total investment to the same level as your bonds, wants 51%.
Huh?"
By the way, I think I read somewhere that the last 1% is what will be owned by the current shareholders under the new restructuring plan. And I assume even that is 1% too much for what those investors would probably like to see.
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