GM Union - Bond holder stake.

[Andy]

You tell me what I'm missing here, because this sounds like stupidity that could only be made up...

http://www.reuters.com/article/newsOne/idUSTRE54L4S820090523

GM's biggest bondholders, with some $27 billion in unsecured debt, still intend to reject GM's offer for a 10 percent equity stake

Bondholders last month pushed for a 58 percent stake in GM, which President Obama's Auto Task Force has signaled is unrealistic.

U.S. Treasury had set a maximum of 10 percent equity for bondholders in any restructuring.

One bondholder, who declined to be identified, said the committee balked at the GM offer after hearing details that the United Auto Workers union would get an 39 percent equity stake -- nearly four times the offer for GM bondholders -- in exchange for the union's much smaller $10 billion claim.

"If we have to go to bankruptcy, we have to go the bankruptcy and maybe we'll get a better deal," one bondholder source said on Friday.

Now let's think this through...

Bond holders, the people who invested in GM, have a $27 Billion dollar stake in the company.

Meanwhile, the Unions have a $10 Billion dollar claim.

So what does Obama's idiot task force say? We're going to give Unions, with their $10 Billion debt, a 39% stake in GM, while the Bond Holders who have $27 Billion invested, can only get a 10% stake?

Then Obama's idiot crew has the stupidity to say that the Bond Holders demands of 58% stake in GM is "unrealistic"? Let's think that through... $10 Billion = 39% stake. $27 Billion = 58% is unrealistic?

Of course, everyone should see this coming a mile away, the Bond Holders will never agree to this, and will force GM into bankruptcy, which will do exactly what the whole bailout was to prevent. So all our money is gone, and GM will end up filing chapter 11 anyway, because our government is run by complete idiots.

I've never seen an administration become such and object failure in such a short time. Even Carter required a few years to achieve this level of uselessness.

 

[Hobo1]

The answer is simple, it is easier to take money away from people who are rich enough to buy bonds; while taking money away from workers is like taking food off the family table. But the Obama administration knows it cannot solve GM's problems. All the chatter you hear now is just a slow dance into bankruptcy. It is far better to hear senseless babble from the government, all in the name of trying to "fix" this problem, than it is to have the government give GM more taxpayer's money. This is the world of politics.

When GM goes into bankruptcy, the bondholder's know the remaining assets will be divided according to bankruptcy law. Bondholders are hold a piece of paper that says GM owns them money. In bankruptcy, debt holders are in a far stronger position to collect money from the bankruptcy court than either equity (stock) holders, or employees. This is the world of justice.

As far as the Obama administration, I look at what strategy they are using, not what words they say. They know GM is going into bankruptcy, and all GM's assets will be purchased by someone or perhaps an upstart car company will purchase the assets in bankruptcy court for pennies on the dollar. They may even be able to keep the GM name.

GM is an old dynasty that is destined to die. The chances are that out of the remains of hundreds of buildings and robotic car manufacturing equipment a new car company will emerge - free from all obligations and debt.

If you think this is some new catastrophe, read this from Wikipedia:

American Motors Corporation (AMC) was an American automobile company formed by the 1954 merger of Nash-Kelvinator Corporation and Hudson Motor Car Company. At the time, it was the largest corporate merger in U.S. history, valued at US$198 million ($1.44 billion in 2006 dollars). When declining sales and the competitiveness of the United States auto market forced AMC to seek a partner in the late 1970s, the company formed an alliance with France's Renault. This lasted until March 2, 1987, when the Chrysler Corporation purchased AMC. Use of the AMC and Renault brand names ceased in the United States. The Jeep line continued; also some Eagle models.

My grandfather drove a Hudson, I remember it well - but GM simply outclassed them. When I was a teenage the Nash Rambler was the first popular small car - my Uncle had one. Then the VW came along and Nash disappeared. Of course those were the days when Honda was only selling 90cc motorcycles in the US!

All of this is a natural evolution in capitalism - and politics is only a side show. Sadly both Bush and Obama thought it was a good idea for the taxpayer to put the proverbial lipstick on this ugly pig - and bail them out.

This has been going on for years.

 

[top gun]

You tell me what I'm missing here, because this sounds like stupidity that could only be made up...

http://www.reuters.com/article/newsOne/idUSTRE54L4S820090523

​

Now let's think this through...

Bond holders, the people who invested in GM, have a $27 Billion dollar stake in the company.

Meanwhile, the Unions have a $10 Billion dollar claim.

So what does Obama's idiot task force say? We're going to give Unions, with their $10 Billion debt, a 39% stake in GM, while the Bond Holders who have $27 Billion invested, can only get a 10% stake?

Then Obama's idiot crew has the stupidity to say that the Bond Holders demands of 58% stake in GM is "unrealistic"? Let's think that through... $10 Billion = 39% stake. $27 Billion = 58% is unrealistic?

Of course, everyone should see this coming a mile away, the Bond Holders will never agree to this, and will force GM into bankruptcy, which will do exactly what the whole bailout was to prevent. So all our money is gone, and GM will end up filing chapter 11 anyway, because our government is run by complete idiots.

I've never seen an administration become such and object failure in such a short time. Even Carter required a few years to achieve this level of uselessness.

The fact is the bond holders have an unrealistic view of what their holdings are worth in their current state of decline... and the workers themselves have a very vested interest in building the company back up.

If the company goes completely out of business the bond holders get almost nothing. But if they think they will be treated so much better in a bankruptcy court then they have every right to go that way & see. I bet it will be about the same myself.

The whole point of this exercise is to not see GM completely drop off the face of this earth. That's what the bailout (loans) have been about (cushioning the blow) and that's what the reorganization plan is about.

Notably the Unions have given back tons to try and keep GM alive. If GM completely goes out of business it's they who have lost their jobs.

This particular bankruptcy scenario is not like almost any other. There had to be some government cushion. The reason being buying an automobile is a long term investment that also entails long term warranty issues.

It's not like say an airline going straight into bankruptcy were the consumers greatest risk would be holding a worthless plane ticket.

President Obama is doing a great job considering the BUSH RECESSION GREATEST ECONOMIC DOWNTURN SINCE THE GREAT DEPRESSION flaming bag of dog poo George Bush left him. Support our duly elected President and the workers of this great country because they will make things better in the next year or two.

Write it down... put it on your refridgerator... remember when I said it.

 

[Andy]

The answer is simple, it is easier to take money away from people who are rich enough to buy bonds; while taking money away from workers is like taking food off the family table.

You think taking money from Unions is equal to taking money from workers? Not so. GM will be closing down more plants and more dealerships after the nearly inevitable bankruptcy, more so than if not forced into bankruptcy court. More people will lose jobs.

Moreover, neither the bond holders, nor the Unions will be getting money. They will be getting a % stake in the corporation. If the Unions get 10% stake, or 30% stake, is largely irrelevant money wise, because it all depends on how GM performs, and makes money, which undoubtedly will only happen if GM cuts jobs and benefits to stay profitable.

The bottom line is, the bond holders will force GM into bankruptcy, and workers will lose jobs. Thank you Barack Obama.

 

[top gun]

You think taking money from Unions is equal to taking money from workers? Not so. GM will be closing down more plants and more dealerships after the nearly inevitable bankruptcy, more so than if not forced into bankruptcy court. More people will lose jobs.

Moreover, neither the bond holders, nor the Unions will be getting money. They will be getting a % stake in the corporation. If the Unions get 10% stake, or 30% stake, is largely irrelevant money wise, because it all depends on how GM performs, and makes money, which undoubtedly will only happen if GM cuts jobs and benefits to stay profitable.

The bottom line is, the bond holders will force GM into bankruptcy, and workers will lose jobs. Thank you Barack Obama.

You forgot the first part of the story...

It goes...

As opposed to George Bush & the Republicants just letting the whole company go completely out of business, sell off everything, and everybody loose all their money and all their jobs.

With the Republicants if you're a Wall street big wig you get 350 Billion after only a one sheet of paper request no questions asked, no strings attached.

If you are hard working factory workers they'd let you swing in the breeze.

THANK GOD THE AMERICAN PEOPLE SAW THROUGH THOSE FOOLS AND ELECTED A REAL LEADER THAT CARES ABOUT THE REGULAR AMERICAN WORKING GUY & GAL IN PRESIDENT OBAMA!

 

[Andy]

You forgot the first part of the story...

It goes...

As opposed to George Bush & the Republicants just letting the whole company go completely out of business, sell off everything, and everybody loose all their money and all their jobs.

With the Republicants if you're a Wall street big wig you get 350 Billion after only a one sheet of paper request no questions asked, no strings attached.

If you are hard working factory workers they'd let you swing in the breeze.

THANK GOD THE AMERICAN PEOPLE SAW THROUGH THOSE FOOLS AND ELECTED A REAL LEADER THAT CARES ABOUT THE REGULAR AMERICAN WORKING GUY & GAL IN PRESIDENT OBAMA!

No, I didn't respond to that theory, because it's plane stupid, and has no bearing on reality.

Maybe you forget Chrysler that's already been bought out several times already? Companies do not close up shop and just "go completely out of business, sell off everything, and everybody loose all their money and all their jobs" as you say. The fact you would say this proves the utter lack of knowledge you have on this topic.

What would happen to GM and Chrysler if the government had given no money, and provided no bailout... is exactly what IS happening. They would have filed for bankruptcy. They would have gone to court, and restructured while settleing their debts with their bond holders. They would have closed plants (just like they are) and closed dealerships (just like they are).

The difference would be that both would have had a better barganing positions because they could say they really don't have any money. In which case the lenders and the Unions would both be more understanding. As it is, Bond holders and Unions are looking at the massive bailouts and saying, hell no we're not going to let you off. You got billions from the government, pay up!

So now... under the brilliant idiot you elected, GM will be FORCED into bankruptcy after getting billions of dollars. You don't get what this means do you? The situation is going to be worse than it would have been without any government involvement at all.

Sorry, but Obama might have some skill at reading a telepromtper and looking the part... however, it's only skin deep. His policies are absolute failures.

 

[pocketfullofshells]

Andy of course can backl that up becuse he knows what GM/Chrysler had planned for with no bail out, and what a judge would have done with the bancrupcy, and knows that they would not end up like Circut city and just close shop....he has all the evidence....well all thats needed for him.. not that that is alot.....

 

[top gun]

No, I didn't respond to that theory, because it's plane stupid, and has no bearing on reality.

Maybe you forget Chrysler that's already been bought out several times already? Companies do not close up shop and just "go completely out of business, sell off everything, and everybody loose all their money and all their jobs" as you say. The fact you would say this proves the utter lack of knowledge you have on this topic.

See Andy you walk right into it...

Nash

Studebaker

Rambler

AMC

I could go on if you like. Just say the words Andy... Car companies do just sell everything off and go out of business. I'll forgive you.

And even the Chrysler example you gave helps my point. They almost went completely under before but a government bailout loan prevented that. All those jobs were saved for the last 20 years and every dime plus interest was paid back to the government.

PRESIDENT OBAMA... thank you for caring about Main Street and the regular working stiff.

 

[Animal]

See Andy you walk right into it...

Nash

Studebaker

Rambler

AMC

I could go on if you like. Just say the words Andy... Car companies do just sell everything off and go out of business. I'll forgive you.

And even the Chrysler example you gave helps my point. They almost went completely under before but a government bailout loan prevented that. All those jobs were saved for the last 20 years and every dime plus interest was paid back to the government.

PRESIDENT OBAMA... thank you for caring about Main Street and the regular working stiff.

It damn well better work this time. Hell, SOMETHING better work.

 

[Andy]

See Andy you walk right into it...

Nash

Studebaker

Rambler

AMC

You don't know jack do you. Nash merged with Hudson and created AMC. AGAIN... the company didn't just close down and send everyone home. The successful parts of the business were kept, while the failing parts were dropped... same as any bankruptcy.

AMC in the late 1950s pinned the success of the entire company on the Rambler and purposefully phased out the Hudson and Nash car lines. Of course this screwed the company over. In the 1970s, they acquired Kaiser Jeep, and later sold out to Chrysler which AGAIN... the company didn't just close down and send everyone home. The successful parts of the business were kept, while the failing parts were dropped... same as any bankruptcy.

In all four examples, the business didn't simple close down and send everyone home. Successful parts were kept, and unprofitable ones were lost. JUST LIKE TODAY. The only difference is we gave them billions to flush down the bankruptcy drain to do it. The result is EXACTLY THE SAME. Thank you for proving my point sparky.

I could go on if you like. Just say the words Andy... Car companies do just sell everything off and go out of business. I'll forgive you.

And even the Chrysler example you gave helps my point. They almost went completely under before but a government bailout loan prevented that. All those jobs were saved for the last 20 years and every dime plus interest was paid back to the government.

You can go on all you want. Each case proves exactly what I said. So rant away sparky.

No, you are wrong. Chrysler didn't need a bailout to be sold off anymore than Nash, Hudson or AMC needed a bailout to be sold off. The theory you just made is absolutely retarded and clearly lacking in sense or historical basis.

 

[top gun]

You don't know jack do you. Nash merged with Hudson and created AMC. AGAIN... the company didn't just close down and send everyone home. The successful parts of the business were kept, while the failing parts were dropped... same as any bankruptcy.

AMC in the late 1950s pinned the success of the entire company on the Rambler and purposefully phased out the Hudson and Nash car lines. Of course this screwed the company over. In the 1970s, they acquired Kaiser Jeep, and later sold out to Chrysler which AGAIN... the company didn't just close down and send everyone home. The successful parts of the business were kept, while the failing parts were dropped... same as any bankruptcy.

In all four examples, the business didn't simple close down and send everyone home. Successful parts were kept, and unprofitable ones were lost. JUST LIKE TODAY. The only difference is we gave them billions to flush down the bankruptcy drain to do it. The result is EXACTLY THE SAME. Thank you for proving my point sparky.

You could use a little spark... Because there's obviously no bulb lit up in that little noggin' of yours.

All those companies stopped manufacturing and selling their brand of cars. They sold off what they had and went out of business. The only way they didn't GO OUT OF BUSINESS is if you can show me a 2009 Nash... Studabaker... Rambler or AMC.

And selling off ALL of your companies assets to another (or several others) none of which are going to continue ANY of your brand is not the same as going into bankruptcy to stave off creditors , reorganize and return to the market place with your brand... now is it?

Come on Andy. You said something stupid before you thought it out and got busted. It happens. I said I'd forgive you... just stop digging yourself in deeper.

 

[Andy]

All those companies stopped manufacturing and selling their brand of cars. They sold off what they had and went out of business. The only way they didn't GO OUT OF BUSINESS is if you can show me a 2009 Nash... Studabaker... Rambler or AMC.

And selling off ALL of your companies assets to another (or several others) none of which are going to continue ANY of your brand is not the same as going into bankruptcy to stave off creditors , reorganize and return to the market place with your brand... now is it?

You are not a business owner are you? You didn't go to OSU did you? No one is so ignorant from OSU.

You really don't understand anything. Ok, so when Chrysler is sold to Fiat, they could change all their brands over to Fiat brands, just like Nash and Studabaker and Rambler and AMC were switched over. You really don't get that what happened to all those companies, is exactly what IS happening to GM and Chrysler?

As with GM, again... If they did not get the bailout money, they would have declared bankruptcy 6 months ago. The bailout money just allowed them to postpone that for 6 months. That money is GONE.... so they are STILL in bankruptcy and they are STILL broke. It DID NOT HELP.

They will close down factories just like Nash and all those companies you listed, and they will likely be bought out just like those companies, and workers will lose their jobs just like all those companies. NOTHING HAS CHANGED other than the billions of dollars lost.

Like talking to a 10 year old. Um... hello... if the bailout money helped, why are they going to bankruptcy court? Um.... doh.... because it's gone sparky? Duh... yeah... it's gone. The money is gone. We just blew billions and billions your children will have to repay for NOTHING... IT IS GONE. They are BANKRUPT! Do you understand "bankrupt"? Do you need a dictionary?

Read closely OSU grad-u-it....

Bankruptcy
The state of a person or firm unable to repay debts.
http://dictionary.reference.com/browse/bankruptcy

If Obama dumb *** bailout helped, they wouldn't be bankrupt.

 

[pocketfullofshells]

You are not a business owner are you? You didn't go to OSU did you? No one is so ignorant from OSU.

You really don't understand anything. Ok, so when Chrysler is sold to Fiat, they could change all their brands over to Fiat brands, just like Nash and Studabaker and Rambler and AMC were switched over. You really don't get that what happened to all those companies, is exactly what IS happening to GM and Chrysler?

As with GM, again... If they did not get the bailout money, they would have declared bankruptcy 6 months ago. The bailout money just allowed them to postpone that for 6 months. That money is GONE.... so they are STILL in bankruptcy and they are STILL broke. It DID NOT HELP.

They will close down factories just like Nash and all those companies you listed, and they will likely be bought out just like those companies, and workers will lose their jobs just like all those companies. NOTHING HAS CHANGED other than the billions of dollars lost.

Like talking to a 10 year old. Um... hello... if the bailout money helped, why are they going to bankruptcy court? Um.... doh.... because it's gone sparky? Duh... yeah... it's gone. The money is gone. We just blew billions and billions your children will have to repay for NOTHING... IT IS GONE. They are BANKRUPT! Do you understand "bankrupt"? Do you need a dictionary?

Read closely OSU grad-u-it....

Bankruptcy
The state of a person or firm unable to repay debts.
http://dictionary.reference.com/browse/bankruptcy

If Obama dumb *** bailout helped, they wouldn't be bankrupt.

Andy has a magic crystal ball that tells him what would have happened ...so he can act like its fact. not like a lack of facts would ever stop him.

 

[GenSeneca]

Andy has a magic crystal ball that tells him what would have happened ...so he can act like its fact. not like a lack of facts would ever stop him.

Six or so months ago you were all Pro-Bailout, saying that we had to bail out the auto industry, that bankruptcy would be the end of US auto makers... You were blasting us for saying they should be allowed to fail, that they should skip the bailout and go straight into bankruptcy... We said then the bailouts would fail and you said then that we must have crystal balls to "know" what was going to happen... We don't need crystal balls now, we didn't need one then, we won't need one in the future because we have history to show us such policy suggestions have never worked and are doomed to fail.

Here is Andy from 12/4/08 responding to the typical claim that we needed the bailout because bankruptcy would mean the death of the auto industry:

There is a false presupposition here. It is the idea that somehow if they "collapse" then they will die and disband and not exist.

That's simply not true. Will they shrink? Will they reduce? Will they downsize? Yes of course.

But Enron still exists doesn't it? Yes it's a shell of a company, but even then, none of the power plants or other operations ceased... they were simply spun off into new companies, with new management, or new investors, and new contracts.

Similarly, Chysler has been sold twice already. They lost of few manufacturing plants, spun off some companies, divested from some other companies, but they still make cars right?

What will happen isn't totally known, and thats why people get all reactionary and spooked. But the idea that if they file bankruptcy, that tomorrow all the GM shops will close up, is not very likely, if not impossible. Hummer might change hands, Mazada will not likely be owned by Ford, and who knows what Chysler will do. But Chevy isn't going anywhere. Nor is Ford.

We have far to many people who get all bent by companies in money troubles, and think that government has to fix it. No, sorry. Let the big three crash. A good bankruptcy will allow them to do what is needed to be competitive again. A bail out will only prolong the agony.

Andy must be a psychic!

 

[top gun]

You are not a business owner are you? You didn't go to OSU did you? No one is so ignorant from OSU.

Only a business grad that's worked at a Triumph motorcycle dealership while going to college... owned two successful autobody shops... has worked closely with auto dealers ever since my first shop opened in 1986... and has a friend that owns his own used car lot with a 60 car inventory as we speak.

How's the cheetos in mom's basement?

You really don't understand anything. Ok, so when Chrysler is sold to Fiat, they could change all their brands over to Fiat brands, just like Nash and Studabaker and Rambler and AMC were switched over. You really don't get that what happened to all those companies, is exactly what IS happening to GM and Chrysler?

HONK... WRONG!

Car companies absolutely do fold. They of course sell off any assets they have but the brand folds. When a company sells off everything (sometimes to one buyer but often broken up into pieces) and the new owner does not continue producing THE ORIGINAL BRAND... guess what... come on put that thinking cap on... THE ORIGINAL BRAND IS OUT OF BUSINESS.

Now the new company may or may not still stay in that same industry. They may be doing the purchase just to put competition out of business. They may take that market share and sell a new different product that they also own.

Hey there has been cases where companies even completely switches what they make all together like between aircraft engines to car engines or between cars and motorcycle.

You actually wanted these major American employers and manufacturers to just break apart into nothingness. Bad plan their dude.

And just for kicks since this is somewhat fairly recent... just what AMC model is being offered in 2009.

As with GM, again... If they did not get the bailout money, they would have declared bankruptcy 6 months ago. The bailout money just allowed them to postpone that for 6 months. That money is GONE.... so they are STILL in bankruptcy and they are STILL broke. It DID NOT HELP.

They will close down factories just like Nash and all those companies you listed, and they will likely be bought out just like those companies, and workers will lose their jobs just like all those companies. NOTHING HAS CHANGED other than the billions of dollars lost.

Like talking to a 10 year old. Um... hello... if the bailout money helped, why are they going to bankruptcy court? Um.... doh.... because it's gone sparky? Duh... yeah... it's gone. The money is gone. We just blew billions and billions your children will have to repay for NOTHING... IT IS GONE. They are BANKRUPT! Do you understand "bankrupt"? Do you need a dictionary?

Read closely OSU grad-u-it....

Bankruptcy
The state of a person or firm unable to repay debts.
http://dictionary.reference.com/browse/bankruptcy

If Obama dumb *** bailout helped, they wouldn't be bankrupt.

This was a step plan in during the worst economic downturn since THE GREAT DEPRESSION... THE BUSH RECESSION. The goals being to both keep manufacturing & sales up as much as possible (that means jobs) and guarantee warranties while the company tried to shed divisions and sell brands off to outside buyers. Bankruptcy was always a possibility to finalize everything that legally needed to take place but it would have made a much MUCH worst impact and made GM worth even less to any outside buyers had they just tanked months ago.

In a few short months from now when GM is a completely revitalized lean & mean companies tooled up to produce the new wave of state of the art fuel efficient, less polluting cars. That combined with the confidence in knowing that GM is now here to stay will cause sales will jump and you'll be crying like a little 2 year old...

because a great American car company DIDN'T FAIL!

Oh, and just so you don't forget you said American Motors Corporation just "switched over" AND THAT'S NOT OUT OF BUSINESS.

AMC: American Motors Corporation was an American automobile company formed by the 1954 merger of Nash-Kelvinator Corporation and Hudson Motor Car Company. At the time, it was the largest corporate merger in U.S. history, valued at $198 million. Declining sales and heavy competition in the United States auto market forced AMC to become a partnership in the late 1970s, the company joined with France's Renault. This lasted until March 1987, when the Chrysler Corporation bought out AMC. The AMC brand ceased with Renault vehicles to be continued to be sold overseas.