Bloomberg – GM Retirees Bully Bondholders With Obama’s Help:
General Motors Corp.’s likely bankruptcy filing is being cast in some quarters as a fight between “money people” intent on making a killing and honest efforts by the government to save a company and jobs.
In reality, GM’s demise comes down to a fight between retirees.
Under the restructuring plan on the table, GM’s retirees would get 39 percent of the company, along with the promise of a $10 billion payment into their health-care trust fund. That is in exchange for $20 billion GM owes the fund.
Not making out so well are current or future retirees who depend on the performance of mutual funds, 401(k) plans and insurance companies that invested in GM bonds. These debt investors, who are owed about $27 billion, will get just 10 percent of the company.
On one side are GM’s unionized retired workers. On the other, are the rest of us — either in retirement or saving for it. Guess who will lose as things now stand?
And needless to say the Chrysler deal falls along similar lines, screwing investors of all sizes for the benefit of the United Autoworkers Union. Someone wins, someone loses, and funny how the people who give the most money to politicians generally win.
Hat tip to Instapundit.
RSS Posts Feed
