If I were Government Motors employee, I'd be praying for the comparatively sane process of bankruptcy as I would have a greater chance of keeping my job than under this plan:
DETROIT (AP) -- General Motors Corp. could be majority owned by the federal government and the United Auto Workers under a massive restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand.
The plan, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.
GM is living on $15.4 billion in government loans and faces a June 1 deadline to restructure and get more government money. If the restructuring doesn't satisfy the government, the struggling company could go into bankruptcy protection.
GM said in a filing with the U.S. Securities and Exchange Commission that it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.
In addition, GM is offering the UAW stock for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.
If both are successful, the government and UAW health care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, CEO Fritz Henderson said in a news conference at GM's Detroit headquarters.
The only thing more idiotic than keeping the GM management in place would be to give the UAW a large block of stock in the company. This is, after all, a union whose every action is nothing short of a shot to the head for the libertarian assumption that humanity is prone to rational self-interest and has called into question every platitude spoken in favor of Homo Economicus. If the UAW had ever been a rational actor rather than a chip right off the old socialist block, it would have long ago agreed to fiscally conservative restrictions on its members' benefits and pay. All this plan will do is give these hyenas one last turn at the GM corpse-buffet.
At least they are starting to shed brands and employees. That is the only glimmer of intelligence that is visible with anything less powerful than the Hubble Telescope. Maybe one of these days they will learn that the reason why the Japanese companies can actually have two separate brands each in the United States is that those different brands actually build different cars and are marketed to different segments of the market. Nissan and its Infiniti high-end models would be the very best model for Ford to emulate if it wants to restructure so as to not become Federal Motors.
Wow. Power to the workers, literally. Marx must be priapic in his grave right about now.