We own GM now I guess

[the]

Originally Posted by jyl

I guess the key issue, between your view and mine, is you think the continuing involvement of the UAW dooms GM's restructuring. (Putting words in your mouth.)

Certainly, the unprecedented and baseless exclusion of the UAW from the Bky law is going to be a major impediment to GM ever successfully reorganizing into a profitable company. GM would have a difficult time in any event, even in a legitimate bky. Taking away all of its Bky rights vis-a-vis the UAW, and to pile on that, giving the UAW a significant ownership interest in GM, is the nail in the coffin.

The above has no basis in the law, or in business. From a legal or business standpoint, it would have never happened. Instead, it is pure politics, done to obtain and retain political office and power, without regard to the success of GM or to the American people.

[jyl]

"the", what do you think GM should have done with the hourly workers? What's the appropriate hourly wage, benefit and retiree package, and other conditions of employment, that you would want to see GM get through BK?

[the]

I don't know. Those are all details that are hashed out by the business in a reorganization, using a business analysis and strategy. I do know that GM would have the best chance if, in making those decisions, it had all of the tools available to it in the Bky, instead of being forced into a phony Chapter 11 Plan prepared by the US Govt. Which significantly tilts the Chapter 11 playing field to GMs detriment.

By definition, it's chances of success are diminished when legally available reorganization tools/options (which are of course there for a reason) are taken away from it. Having significant legal rights and legal options taken away from it can only be a negative, in a situation that is already shaky at best. Because of the significance of the rights and options that GM has been deprived of (i.e., the unleveling of the Chapter 11 playing field, for purely political purposes), and the gravity of the situation, I believe it to be a game breaker.

Hopefully I turn out to be wrong, and GM is so fundamentally sound and strong that it can, with one hand tied behind its back, effectively reorganize and become a functional, profitable, privately owned company again.

[Jim Richards]

Who pays for the pensions of UAW retirees if in BK the labor contracts are set aside?

[the]

That's a fairly complicated question. At least in a real bankruptcy.

In this fake bankruptcy, controlled by the US Govt and the UAW, of course, the analysis is easy. The pensions are fully protected.

That is a *political* decision, not a business one.

In a normal, real bankruptcy, it's more complicated, it depends on the form of the pensions, how much is in the pension funds, and a bunch of other things. But, generally, pension plans can be terminated in a bky, that is an option given to the company under bky law (GM of course has been stripped of that right by the Obama administration). The funds that are available in the pension fund are distributed to the pension holders. Some amount may be covered by insurance. For the uninsured parts, no one pays, the pensioner does not get it.

[Jim Richards]

In a real BK, I believe the gov't (that's us taxpayers) picks up the pensions, at $0.xx to the $1.00. I don't recall what the value of xx is.

Edit: Do any of you know if my belief is correct or not? I'm not gonna bet the farm just yet on this point.

[slakjaw]

So what happens when the next president doesn't want to run an auto company?

I am thinking that GM might still fail.

[Jim Richards]

British Leyland comes to mind.

[jyl]

Originally Posted by Jim Richards

Who pays for the pensions of UAW retirees if in BK the labor contracts are set aside?

Without looking into this particular case, it is normally the Pension Benefit Guaranty Corporation (PBGC), a quasi-public entity that is funded by fees (insurance, basically) paid by all covered pension plans.

Okay, some links -

http://money.cnn.com/news/newsfeeds/articles/djf500/200906011454DOWJONESDJONLINE000525_FORTUNE5.htm

http://www.pbgc.gov/media/news-archive/news-releases/2009/pr09-33.html

[the]

Originally Posted by Jim Richards

In a real BK, I believe the gov't (that's us taxpayers) picks up the pensions, at $0.xx to the $1.00. I don't recall what the value of xx is.

Edit: Do any of you know if my belief is correct or not? I'm not gonna bet the farm just yet on this point.

I don't believe that is correct. The Pension Benefit Guaranty Corp. pays, but that's not taxpayer funded, that is funded by participating companies/pension funds who pay premiums (like jyl says, it's basically an insurance policy - for the contractual premiums paid, you get a contractual insurance benefit).

And, like most insurance policies, it is not unlimited.

To the extent that the pension fund does not have enough to pay the pension obligations, and the PBGC coverage doesn't cover the shortfall, the pensioner takes the loss.

[tabs]

The Democrats can not afford to turn their backs on 450,000 GM retirees and their families, they just might as well shoot themselves before the next election.

Think of it to put in 35 on line at GM and now to be scratched off the ledger...they now have had a 25% haircut...

This is the portent of things to come....

[tabs]

Yes JYL the Chinese will move those factories to China...at a labour rate of $3.00 an hour..That quiet honestly is what most of you on this Board are ultimatily worth...$3.00 an hour...get used ot it...

That is CHANGE U CAN BELIEVE IN....

In all actuality this has been along time coming...back in 1980 I saw this day coming...and this little episode we are going through is just the begining

Back in the day I saw that America was going to have deficit spending as business as usual until the whole thing just collapsed under its weight. That was the day I started to compare the US to the fall of Rome.

[the]

My understanding is the GM pension fund is about $20 billion short.

From what I understand (not sure), in a real bky, the GM pensioners would ultimately take a hit. (like pension holders have done in prior large bkys, like the airlines, etc.)

In this case, unlike in a real bankruptcy, that is not going to be the case, the GM pension holders are going to be fully protected, and the taxpayer is ultimately going to be on the hook for any shortfalls that the pension holders would take in a normal bky.

Apparently, for political reasons (see tabs' post #71, above), GM pension holders are in a "special" category that this government is determined to insulate from any risks (that we all take in any retirement program) and elevate above the law.

It's good to be the king.

[tabs]

This discussion is pointless it is already fate accompli..

The only thing that is to be served is wondering who is going to be next and that this GM episode might serve as a template for future actions...that it folks end of story.

[Hugh R]

GM is effed. O says he doesn't want to run the company, yet he promised the Mayor of Detroit that he wouldn't let GM move it's headquarters to a suburb of Detroit. Sounds like the politicians are already making political decisions, not business decisions.

[URY914]

I would think there must be some type of conflict of intrest when the UAW ends up owning a LARGE piece of the company they have a contract with. Don't they now have a contract with themselves?

[Zeke]

Can we separate the UAW pensions and those of the thousands of non union workers that have worked or still work for GM?

[the]

Originally Posted by URY914

Don't they now have a contract with themselves?

In a nutshell, yes.

They own 20% of GM, Obama owns/controls 60%, the UAW owns Obama, so effectively the UAW now controls GM. Or is beyond the control of GM. They are bulletproof.

That's why the UAW is now above the law, and rights of others are out the window.

That's some change you can believe in.

[URY914]

Originally Posted by the

In a nutshell, yes.

They own 20% of GM, Obama owns/controls 60%, the UAW owns Obama, so effectively the UAW now controls GM. Or is beyond the control of GM. They are bulletproof.

That's why the UAW is now above the law, and rights of others are out the window.

That's some change you can believe in.

Thank you. That explains it clearly.....

[the]

Originally Posted by the

Apparently, for political reasons (see tabs' post #71, above), GM pension holders are in a "special" category that this government is determined to insulate from any risks (that we all take in any retirement program) and elevate above the law.

It's good to be the king.

Well, hold the presses, maybe the Supreme Court will finally put an end to this illegal madness by the Obama administration.

The S.Ct. has now stayed the bogus Chrysler bky and will hear arguments on the legality of it all. Perhaps there is still some hope for the rule of law in this country, and someone will finally put a stop to at least one part of Obama's unprecedented and illegal power grab and disrespect for the law.

My guess is we should know by the end of June or so. This will be a big marker post for the United States - does the Constitution and rule of law still mean anything, or do we really have a king who is above the law?

The stakes are huge - there is no appeal from the decision of the US Supreme Court.