Reuters is reporting that GM’s bankruptcy plan is just like Chrysler’s . . . only without the Italian middleman. “A quick sale of the company’s healthy assets to a new company initially owned by the U.S. government,” is how the Reuters source puts it. “Bad GM” would linger in bankruptcy to help pay off claims. Meanwhile, the $15.4 billion we (the taxpayers) have already given GM will be “forgiven.” Not literally, of course, but GM won’t be paying taxpayers back. A new BOD will be set up with “the tacit approval of the government,” but Fritz Henderson is said to be staying as GM’s CEO. How long does the government plan on owning GM? What’s the endgame? Why are GM secured bondholders being paid off while Chrysler’s were demonized? Details are still emerging, but nothing answers these or a million other questions yet. Stand by.
Edward,
Would you please be kind enough to replace the “British Leyland” logo with the “American Leyland” logo? You know, the Goatse which GM has become?
Quite a bit of artistic talent went into designing the American Leyland logo- please let it shine, and shine proudly. By all means keep it large though…that’s good.
Thanks and God Bless.
Why are GM secured bondholders being paid off while Chrysler’s were demonized?
Because the government knows that they cannot bully GM’s bondholders like they did Chrysler. The short explanation is that they can’t because there’s simply too many of them compared to Chrysler. The rogue group of less than 100 bondholders that nearly sank the Chrysler deal are nothing compared to the thousand or so that would try to sink a GM deal if the government tried to dictate to them the same terms as the Chrysler deal.
What you’re seeing is an acknowledgment by the Obama administration that they went about the Chrysler bankruptcy the wrong way, and it hurt them in regards to the GM negotiations.
Sounds like the Communist version of the old Potomac Two-Step.
pay no attention to the man behind the curtain…
The analogy is not exact, but I expect we’ll see a lot of it.
Do not forget that Leyland Motor Co. was a fairly successful British manufacturer. They were asked (and partially funded) by the gov’t to take over other failing companies which they were then unable to save. The attempt dragged Leyland down as well and they “drowned trying to save the others.”
How much principal are the bondholders supposed to be getting back?
I knew there would be a deal, but this news to me.
American Leyland, stay away from me
American Leyland, GM let me be
Don’t come hanging around my door
I don’t wanna see your cars no more
I got more important things to do
Than spend my time going broke for you.
With apologies to Randy Bachman
A couple points…
– Obama went about the Chrysler deal in the exact right way.. He got what he wanted, therefore he was right.
– Government owned GM? Hmm… Maybe I can request all of GM’s CAD files and product plans under the Freedom of Information Act and post them on the web…
Seems like the government should share the things it owns which could benefit other Americans.
Seems like the government should share the things it owns which could benefit other Americans.
Which would cause GM’s intellectual property to become completely valueless, making it impossible for GM to have any hope of returning to profitability and for the government to recover whatever funds they provide to GM going forward.
Ronnie – As a US taxpayer, I paid for all of that intellectual property. It’s mine and I should be able to do with it as I please.
If GM doesn’t like it, they should create a business plan so compelling that Warren Buffet gives them $50B and then they pay back the government every dime.
Once I formally own it via Ch. 11, then I can probably request everything via FOIA…
“A quick sale of the company’s healthy assets to a new company initially owned by the U.S. government,”
what are these healthy assets they speak of?
and um if the same shopworn tools are running the show why are they expecting a different result?
HEATHROI:
The goal isn’t to “fix” GM. The goal is for the Federal Govt. to gain more power.
The majority of suppliers, GM employees and retirees will be at the mercy of the Federal Government.
Millions of people will now depend on the Federal tit and it will only cost a few hundred billion over the next ten years.
“Vote for candidate X, he voted to extend the benefits to GM retirees. Candidate X, fighting for YOU!”
Quote lw: ” Ronnie – As a US taxpayer, I paid for all of that intellectual property. It’s mine and I should be able to do with it as I please.”
Great idea !! I’ll take my F-22 Raptor now please.
@LW
If he went about it the right way, then why are they changing their strategy with GM?
The fact is, their hardline approach with the secured bondholders brought more questions than answers, and brought attention to their complete abuse of bankruptcy law and the courts. It also brought to light the fact that those bondholders were not nameless, faceless money-grubbers, but were organizations that provided charitable funds or other investments for everyday, average americans. It exposed Obama’s ‘Big Lie’-that hedge funds and other investment entities are, in fact, not big, evil, faceless organizations as he would have you believe.
@ Stu
No go on the F-22. National Defense related. None of GM’s CAD files or product plans are defense related. The Chinese could get 100% of it and it wouldn’t harm our security position.
This is similar to studies that the government does on wildlife. I paid for them, so they will provide me a copy of wolf mating rituals if I request it.
Maybe I have to pay a fee to make copies, but the content is already mine.
@Droid
GM is 10X more complex. It has never been stripped, whereas Chrysler was stripped twice in the last 10 years.
Chrysler had a very simple set of bondholders and Obama was able to strong arm enough of them to grease it thru Ch. 11.
GM is too complex, so it will cost Obama more to get the same results, but in the end the price isn’t important, achieving the goal is all that matters.
The goal isn’t to “fix” GM. The goal is for the Federal Govt. to gain more power.
you mean The Annointed One is….(I can barely think the word) um…sounding like his predecessor?
Great idea !! I’ll take my F-22 Raptor now please.
if cool toys are being handed out, make mine an A-10
Droid800:
The fact is, their hardline approach with the secured bondholders brought more questions than answers, and brought attention to their complete abuse of bankruptcy law and the courts.
I wouldn’t call it ‘complete’ until the UAW starts selling their shares of “New Chrysler”. I suspect a TARPie fix is in. But, if the UAW ends up getting <10 cents on the dollar, Chrysler’s secured bondholders didn’t do too bad.
IW: what intellectual property? Do you think the world is waiting for designs of unreliable cars?
And if there is one single thing that is worthwhile copying, I’m sure the Chinese copy it without paying…
much of the technology belongs to suppliers anyway. The OEM just designs the whole package (Aztec!!!) and produces motor/tranny. Not even the tranny in every case (ZF etc.) and not even the motors (BMW).
Oh, the (aged) production facilites, the brandname (ha ha), the trained employees (ha ha) are the real property of a car OEM.
Oh, damn we just bought the Neon and Aztec design, spoiled UAW employees, worthless factories… now the government can take advantage of that property and make a profit!
Even if the Volt battery was worth anything more than a pipe dream, it belongs to 123Battery or whoever makes it, not GM.
GM = Government Motors
It’s that simple.
Quote lw: “None of GM’s CAD files or product plans are defense related. “
I would beg to differ with you…and I’m quite certain the Secret Service and President Obama would strongly differ with you as he rides around safely ensconced in his GM-designed and built armored limousine.
kaleun:
I didn’t say it would be worth anything. Would just be interesting to publish the knowledge to the world. Have Google index it and maybe some good would come of it.
We paid for it.. so why not..
@ Stu
Point taken.. They can leave those files out.. I’ll take the rest.
@Kaleun
GM has quite a bit of valuable IP. Off the top of my head, it includes transmission designs that were used by BMW, Volt-related IP (there’s quite a bit there), and certainly manufacturing-related IP.
Of all the automakers, GM’s IP is probably among the most valuable, if only because there’s going to be so much of it.
Now, whether that IP has already been replicated by other companies or has been superseded by more advanced technology is a whole other story.
I’ll take a Bradley fighting vehicle, please. One because I’m still licensed to drive them from my days in the Army, and two because they’re more compact and “eco friendly” than the M1. Parrallel parking’s a piece of cake when you can pivot steer!
@ JT
“The analogy is not exact, but I expect we’ll see a lot of it.”
I think you’re being kind. The analogy is not even close other than they involve large car companies. The story of British Leyland is far more interesting. GMs tale is really one of bad management, Leyland is a web of intrigue even involving Soviet infiltration.
It’s all here:
http://www.aronline.co.uk/
Droid800: that’s the problem that their technology mostly has been superseded already. I’m sure someone has a better tranny already.
I own the patents to the fanciest typewriter… unfortunately they became worthless with the advent of computers.
not sure if the Volt IP is worth anything as we are still to see the car drive.
Their marketing and lobbying is patent-worthy since it got them billions of free $.