This may not be news to you, TTAC’s Best and Brightest; or anyone who knows what happens when you take in less money than you spend (no matter who gives you the money). But The Detroit News presents the revelation that GM has already laid the groundwork for a larger federal “investment” than the $13.4b dumped into its coffers by February 15, before the whole “show us your new new new new new new new new turnaround plan” thing. “General Motors Corp.’s chief operating officer [Fritz Henderson] said Monday that the automaker has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department.” To whom was this scenario presented? And why weren’t we, the people, the people paying the tab, told about it? The rest of the article talks about the “confusion” over government-mandated union concessions, but honestly, I’m left wondering what you call a tragi-comedy that borders on farce, and whether these guys will stop scamming us long enough for me to write about actual honest-to-God cars.
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@ RF
a tragi-comedy that borders on farce
Fawlty Towers
Anyone know when the warrants have to be issued for this money, or if they already have been issued? Looking at the 8-K made me dizzy.
20% of 13.4B is 2.7B, which is equal to current market cap of GM. So existing shareholders will see their stake dilutes by ~half at some point…until the bondholders get THEIR equity….
The bigger picture is, why are we doing this at all? I looked at The Turnaround Plan. As far as I can tell, the only justification for aiding GM would be to manage unemployment to reasonable levels but GM’s plan calls for the elimination of tens of thousands of jobs. Beats me why we didn’t let them go into receivership and just get on with the process. New leadership, all the bloodletting all at once, new GM.