11-26-2010, 01:49 PM | #1 |
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GM Stock Sale: Taxpayers and investors not as fortunate as UAW
Link: http://www.washingtontimes.com/news/...er-stock-sale/
General Motors Co.'s recent stock offering was staged to start paying back the government for its $50 billion bailout, but one group made out much better than the taxpayers or other investors: the company's union. Thanks to a generous share of GM stock obtained in the company's 2009 bankruptcy settlement, the United Auto Workers is well on its way to recouping the billions of dollars GM owed it — putting it far ahead of taxpayers who have recouped only about 30 percent of their investment and further still ahead of investors in the old GM who have received nothing. The boon for the union fits the pattern established when the White House pushed GM into bankruptcy and steered it through the courts in a way that consistently put the interests of the union ahead of many suppliers, dealers and investors — stakeholders that ordinarily would have fared as well or better under the bankruptcy laws. "Priority one was serving the interests of the UAW" when the White House's auto task force engineered the bankruptcy, said Glenn Reynolds, an analyst at CreditSights. The stock offering served to show once again how the White House has handsomely rewarded its political allies, he said. The union's health care and pension trust fund earned $3.4 billion through the sale of one-third of its shares in GM last week. Analysts estimate that it would break even if it sells the remaining two-thirds of its shares at an average price of $36 — close to where the stock traded shortly after the offering hit the market. GM shares closed at $33.45 on Wednesday. The United Auto Workers' health care and pension trust fund earned $3.4 billion through the sale of General Motors Co. stock last week. (Associated Press) For taxpayers to break even, by contrast, the stock would have to rise to at least $52 and by some estimates as high as $103 — levels that would take years to achieve. In any event, after selling one-third of its shares last week, the U.S. Treasury has agreed not to sell any more of its GM stock for another six months, while the union fund is free to keep selling its shares. Through the offering, the Treasury recouped $13.7 billion of its $49.5 billion cash infusion in GM, with another $1.8 billion possible by the end of the year. GM is repaying another $9.5 billion in loans from the Treasury, but that still leaves taxpayers a long way from breaking even. Union claims ordinarily do not receive such special treatment in bankruptcies. The generous share of GM stock given to the union trust fund under the White House deal puts it not only ahead of the Treasury but on a par with secured creditors such as banks, which normally receive the most favorable treatment from bankruptcy courts. |
11-26-2010, 02:26 PM | #2 |
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So it took you this long to figure out we were getting screwed all along? The plan was never for us to get our money back.
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11-26-2010, 02:38 PM | #3 |
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11-26-2010, 02:49 PM | #4 | |
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Quote:
The goal was never for the government to make a profit. The goal was to save jobs and keep a major industry participant and source of national pride in business. Failure to accomplish these goals would have hurt the economy even worse than it hurts now and would have cost the government incredible amounts of future revenue. Do we get our money back when we spend it on the military or foreign aid? Do we get our money back when we use it to pay for research grants or student loans? There are too many times where the average American does not get any money for the decisions of the government to be complaining about this. Someone paying back a government loan does not generate a check in the mail to everyone else in America. GM will be the same way. They are in business. They will pay huge amounts of taxes for years to come. That is going to amount to way more than this bailout could have ever been.
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11-26-2010, 03:18 PM | #5 |
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Compare the cost of GM getting liquidated to whatever would be lost from the bailout loans/ownership. Which one is less?
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Note, if I've gotten any facts wrong in the above, just ignore any points I made with them
__________________ Originally Posted by FbodFather My sister's dentist's brother's cousin's housekeeper's dog-breeder's nephew sells coffee filters to the company that provides coffee to General Motors...... ........and HE WOULD KNOW!!!!__________________ Camaro Fest sub-forum |
11-27-2010, 12:21 AM | #6 |
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the whole friggen thing was a payoff to the UAW all along...
GM needs to move to Texas or a right to work state end all new union memberships...disband the current one and honor the people who have retired until they phase out.... it makes no sense to pay somebody so much after they are done working for you...its ludicrous and hurts us the consumer with the product of the car...
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11-27-2010, 01:06 AM | #7 |
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I have a feeling that in the end this will be a success, just like TARP was a success with the banks.
Just give it time and let GM do their thing. If they can compete on equal footing without the unions dragging them down, they should be poised to do quite well in the future.
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11-27-2010, 02:53 AM | #8 |
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This thread depresses me. :/
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11-27-2010, 06:29 AM | #9 |
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11-27-2010, 07:08 AM | #10 |
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11-27-2010, 09:38 AM | #11 | |
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I just hope they're successful. |
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11-27-2010, 09:47 AM | #12 | |
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11-27-2010, 10:45 AM | #13 |
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11-27-2010, 11:26 AM | #14 | |
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Quote:
I'd like to know how much going broke cost GM workers and management. My guess is not much. |
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