What a sorry state of affairs we find our country in today. It has become apparent from the sheer amount of money the government has to commit to GM that this company should just be allowed to die and be liquidated. Ford and Chrysler could buy GM's good brands and then grow marketshare in an auto market without GM, both would most likely thrive. But that would mean fewer jobs for the United Auto Workers, the main reason American auto companies are dying in the first place. So now the U.S. government is the largest shareholder in the largest car maker in America. I wonder how Ford management feels competeing with a government owned GM and Chrysler. Will it really be a level playing field or will GM and Chrysler offer below market interest rates on car loans through the taxpayer subsidized GMAC which now can offer loans to both GM and Chrysler customers. Capitalism is dying before our eyes my friends, it's very sad to watch.-Lou
U.S. to take majority state in General Motors
Bankruptcy likelihood rises
Wasington Times-The White House is driving General Motors Corp. toward a bankruptcy reorganization that would grant the government as much as a two-thirds stake in the battered automaker, while consigning bondholders and unions to minority shares.
GM's bankruptcy now appears more likely than ever within days as the government declined to significantly increase the share of the company offered to bondholders from the 10 percent level they previous rejected. Meanwhile, the United Auto Workers union revealed that its retiree health care fund would receive no more than a 20 percent share of the company.
Within two months, the U.S. and Canadian governments together under the plan would own nearly 70 percent of the storied Detroit company, which is considered the backbone of the U.S. auto and manufacturing sectors, according to sources familiar with the discussions. Canada would receive a small share in exchange for assisting GM, but the sources declined to be more specific.
The overwhelming share of the company the government is giving itself much exceeds the 50 percent share originally reported last month and angered bondholders who feel that the government should have offered more to investors in light of the union's agreement to halve its earlier reported 39 percent share.
"The government is going to get more? Talk about making this worse," said Bill Zastrow, 59, a small-business owner in Massachusetts with $240,000 invested in GM bonds. "I would have thought that would give them the opportunity to do the right thing and sort of even things out."
The White House defended the giant stake it is taking in the nation's largest manufacturer, saying the move was necessary to make sure taxpayers profit from what is likely to be a very expensive investment in GM as it goes through bankruptcy.
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