Reply With Quote
Don't confuse "building" with "assembling". Where do you think those parts come from? *hint* It aint Mexico or China.
http://www.washingtonpost.com/wp-dyn...051303382.html
i don't think the public should forget or forgive the loan, but it will probably go the way of oil subsidies.
Don't confuse "building" with "assembling". Where do you think those parts come from? *hint* It aint Mexico or China.
http://www.washingtonpost.com/wp-dyn...051303382.html
I think the Fed is reportedly going to get something like 16 billion back when it reduces it's stake from 61 to 49% or there abouts.
That's a pretty good initial payment.
They'll get back something. 60% of GM's stock will be worth something. It's just not going to be worth anything close to $50 billion.
Of course another concern is that GM's S-1 filing for their IPO is also saying that they're carrying $26 billion worth of unfunded pension obligations so the US taxpayer may not be done giving money to GM just quite yet.
I'm just using GM's own numbers.
Can't see it. 12% of GM being worth $16B would mean that the company as a whole would have a market cap of $133B. GM's all-time high for market cap is in the low $50's.
You really think it's that simple to suddenly turn the largest company on the planet into a full 180? They were losing something like $3,000,000 an hour at one point.
Last edited by Cry Havoc; 08-20-2010 at 12:35 PM.
Everyone hopes for GM's success. Whether they pay back the funds or not is not the point. With the taxpayer fitting the bill the government's responsibility was to the taxpayer and putting together a reorganization package that gave GM the best opportunity for success. I find it hard to believe that catering to the same group that was largely responsible for the company's demise is putting the taxpayers interest first.
The bigger issue for the bondholders is the precedent set by the government. If the investors of the world now have to worry about the U.S. government stepping in and changing the rules of bankruptcy law fewer investors will invest in bonds. This will then make it more difficult for companies and municipalities to raise capital.
We have a winner.
we all understand that cowboy. but the critical timing was a hit this country couldn't absorb.
Are you sure there is no other claim union members would have other than unpaid earned wages?
The big union claim was unsecured pension obligations.
By agreeing to reduce GM's health care liabilities by 11 Billion the UAW got 17.5% of the new GM.
To contrast that, the Bondholders gave up 27 billion of debt and got a measly 10% of new GM.
Not exactly equitable was it?
And they made a sizable concession that they approved, just as majority of the bondholders approved their concessions.
If the parties agreed to this in an attempt to avoid a traditional bankruptcy, why are you acting like they were forced to do it?
[cue "Because the government is powerful" and could have made it worse canard]
If the bondholders thought they were being treated so terribly, they shouldn't have agreed to the terms.
They agreed to the terms.
exactly. Thats how extortion works.
But they could have just gone into bankruptcy.
They agreed not to.
Yes. Pension plans are defined benefit plans watched over by ERISA. ERISA ensures that plans are funded properly on an annual basis. If a company goes out of business the plan assets are administered by a third party. The participants then typically take the lump sum and move it to an IRA.
The taxpayer was going to be on the hook with or without the bailout. This is something people don't seem to understand:
People who lose their jobs in recessions are a severe burden upon a society financially.
Unemployment benefits, loss of tax revenue, domino economic effects are all something to be considered (among other factors) when determining how much money the taxpayer was going to lose in either scenario.
They agreed not to because of the money promised by our government. With that money came the power to influence and structure the deal around benefitting the unions. If we as the taxpayer don't own GM's bonds and are not part of the union wouldn't we want to structure the deal to give GM the best opportunity to resume profitability as quickly as possible. As I mentioned before I find it hard to believe that putting the union first in line considering the role the union played in the companies downfall was the best strategy for us as taxpayers.
So the bondholders benefited from the taxpayers as well.
OK.
If all we are doing is shaking our fists at unions, there is no need to cloak it in something else.
Why do you guys keep saying it was an all or nothing? What if GM had been purchased in bankruptcy by someone like Toyota? The successful product lines/factories would remain open and the workers would still be employed.
They all agreed not to go into bankruptcy.
With the government gun to their heads. Sure, they agreed. At that point it wouldn't have been rational not to.
What gun?
I'm shaking my fist at the government who is spending my tax dollars. The unions did what every other interested party tried to do which is get all they could. The unions won out because there members vote with the libs.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
