Obama Motors
aa
Back in December, in an economy far, far away, then-CEO
Rick Wagoner tossed out the scary cost to taxpayers of $100
billion if General Motors wasn't saved by the government.
Well, GM was saved in December and again in March, and as
early as today the feds will rescue it a third time in a
prepackaged bankruptcy that is already costing at least $50
billion, and that's for starters. Welcome to Obama Motors,
and what is likely to be a long, expensive and unhappy
exercise in political car making.
Taxpayers have so far put up nearly $20 billion, which was
supposed to be a loan at market rates but under Treasury's
forced restructuring will mostly be converted into equity
in the new GM. The feds are also putting up $30.1 billion
in "debtor in possession" financing and will effectively
nationalize the once-mighty auto maker by taking roughly
60% ownership. (That's not counting $12.5 billion to save
GMAC, the company's financing arm.) The Canadian government
will go along for the ride for 12% of the new GM, the UAW
will get about 17.5%, and the hapless bond holders have to
settle for 10%.
The Obama Treasury is portraying this as the best solution
to the mess it inherited, leaving GM with much-reduced
legacy costs for health care, a cleaned-up balance sheet, a
humbler UAW that has forgone some performance pay, and a
more efficient dealer network and product line. GM, we are
told, will now be able to make a profit and some day even
return money to taxpayers. If you close your eyes and
imagine that GM's private managers would be able to make
decisions based solely on business judgment, you can even
start to believe.
But then you snap out of it...
Continued:
http://online.wsj.com/article/SB124381255295170405.html
krp
"aa" <rema...@reece.net.au> wrote in message
news:QDXGB2YH3996...@reece.net.au...
> Wall Street Journal
>
> Back in December, in an economy far, far away, then-CEO
> Rick Wagoner tossed out the scary cost to taxpayers of $100
> billion if General Motors wasn't saved by the government.
> Well, GM was saved in December and again in March, and as
> early as today the feds will rescue it a third time in a
> prepackaged bankruptcy that is already costing at least $50
> billion, and that's for starters. Welcome to Obama Motors,
> and what is likely to be a long, expensive and unhappy
> exercise in political car making.
Production for the Hummer will now be moved to China by the new owners.
China, Incorporated. They already make almost ALL the electronics our
military uses.