Wednesday, May 20, 2009

Bizarre Car Czar

The government has informed taxpayers of two developments. First, that it will begin operating its newest department -- Government Motors -- June 1, 2009. Second, that the money originally loaned to the old GM has been declared a gift. No repayment required. Thanks America. You're the greatest.

When the company gets into full swing, it will probably introduce a model named Cameleopard, a daring hybrid that will combine the best aspects of bicycles, solar energy, sailing and electric lawnmowers. It is also expected that the United Auto Workers will receive substantial ownership in Government Motors, eventually.

Giving workers a stake in the means of production is a step that is coming way too late. Sad. The old GM was a company with a relatively small equity base. It would have been easy and smart for UAW members to have accumulated a substantial stake in the company over the last 60 years. They would have had an important place on the board of directors for decades if they'd been smart.

Instead, workers formed the opposition and forced the company down a path filled with compromises that have led to the pending bankruptcy.

What lies ahead for the newest state-run enterprise? Think Amtrak. Part of that railroad business works well enough to produce an operating profit. But most of it is a loser, providing rail service that survives on government funding. Government Motors will become another make-work program for auto-workers who will build a lot of cars no one buys.

GM bankruptcy plan eyes quick sale to government

NEW YORK, May 19 (Reuters) - General Motors Corp's plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.

The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.

If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.

Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.

The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.

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Blogger David B. Dancy said...

you should have called the cops on your buddy for that redrum. iT MAKES YOU AN ACCOMPLICE.

11:40 AM  
Blogger no_slappz said...


Wrong. Having knowledge of a crime does not turn the knower into an accomplice.

However, my friend to whom the murderer confessed is the one with the moral obligation to mention his OJ/Rosie Grier experience to the cops.

1:05 PM  

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