Government Motors

General Motors is finished.  If the deal goes through as planned, General Motors will die on the vine.  Chrysler is also headed fro the scrap yard.  While I am a lousy prognosticator, I just can't believe Fiat or any other entity would want to take a stake in  a company whose majority owner is the same union that helped bring the company to its knees.

I'm not sure how this deal works:

Meanwhile, however, bondholders pose a major stumbling block to the restructuring. Under the proposed offering which GM filed with the Securities and Exchange Commission, investors holding $27.2 billion of GM bonds would swap those bonds for 10 percent of the equity shares of the restructured company. The United Auto Workers would get up to 39 percent of the company in return for half of the $20 billion GM owes to a health fund for retired workers. Current shareholders would get 1 percent of the new shares.
The bond holders get a 10% share for 27.2 Billion in bonds.  The UAW gets a 39% share for 10 billion in bonds.  I admit I'm no math wiz, but that makes about as much sense as as buying dimes with dollars..  No matter how you add and subtract, multiply and divide, slice and dice, parse and edit, it looks like everyone but the Union is getting a very short end of the stick.

If the bondholders reject this, they then stand to lose everything in a bankruptcy.  If they take the deal, they get something but the UAW gets a sweetheart deal that smells like payback.

Either way, this does not end well for GM.  I just do not believe the UAW and the Government will be able to inspire any kind of confidence in their product.  As the owner of a 2006 Chevy van, I was looking at trading it in the next couple of years, but I guess I'm forced to run the thing until the wheels fall off now.  If I do manage somehow to trade it in for a new one in the future, it won't be for a Chrysler or a GM product.

This is Socialism.  Welcome to the end of America.

VW

Comments

[The Griper]

michigan is going all to hell. better get your tent and move way up north, amigo, where you can live off the land.

[WMD_Maker]

I see where the govt is already telling GM what it can and cant build. As part of the deal for more money GM has been forced to shut its HPV (High Performance Vehicle) group. This group has design responsibility for the CTS-V and Corvette ZR1. 2 option packages that have sold comparatively well dispite the high added cost. Good chance th v8 is dead under the watchfull eye of Obama

[Glenn Cassel AMH1(AW) USN Retired]

Looks like the next one will be a Ford. if the UAW is going to be owning the other two, I will not help them out in any way, shape or form.

[Bloviating Zeppelin]

Fiat is in itself something of a loser, if you read anything from JD Power. Plus, Fiat already has an agreement with Ford on its Ka. Fiat and Chrysler are the blind leading the blind. GM will simply end up bankrupt and reorganized, and that might be a good thing.

BZ

[WMD_Maker]

Fiat will now control Jeep. Having 4wd meant being able to get stuck further out. With Fiat in control that brings a whole new meaning to being stuck further out. Now it will add the probability of the thing just quitting on you instead of getting all 4 stuck in the mud

[Jenn]

Screw the unions. They are respinsible for this mess. From the teachers unions to the construction unions you name 'em. Screw 'em all. You should see what they've done to Cali. Sorry but it just doesn;t seem right for a dude who's nailing a piece of wood to another piece of wood to get paid 75 bucks and hour with full med and bennies.