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The New GM........Sorry If You Owned the Old GM

Discussion in 'Off Topic Threads' started by Bluzman98, Jun 1, 2009.

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  1. Bluzman98

    Bluzman98 Member

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    Fox News Reports:

    “The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.”

    Just like the current adminstration to take care of the American investor......gives me a warm and fuzzy feeling.

    Beware....more to come.

    Jim C
     
  2. Bluzman98

    Bluzman98 Member

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    What makes you think that they will not eventually go out of business? As if our government has a great track record of success or fiscal responsiblity in running anything.


    That being said and to answer your question, shareholders would have gotten nothing under a Chapter 7, but in this scenario two governments receive the lion's share of ownership with no provision for the current common or preferred shareholder. As a matter of fact, why is any government in the mix of corporate ownership (isn't that called nationalization)? Since our tax dollars are paying for this, why don't they proportionately distribute shares to the taxpayers based on taxes paid? Its not the government's money, its our money paying for the bailouts.

    The real question to ask is....How many of O'Sh*tbag's cronies will be on the BOD and receive Director's compensation? With a 60% ownership of shares they can dictate corporate direction, appoint whomever they desire to the BOD, amend bylaws, and distribute profits however they want without recourse. They cannot be overruled no matter how many other "shareholders" vote against them.

    The next in line seems to be Citigroup.

    JMHO

    Jim C
     
  3. Bluzman98

    Bluzman98 Member

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    Jerry...

    Point well made.

    Jim C
     
  4. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    What Jerry said!! And,, they are going to build us a good quality car, bet it sux too? God help us and the U.S.!! Hap
     
  5. Fast Oil

    Fast Oil TS Member

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    The new slogan: "the reinvention of GM".

    Didn't someone once say,"you don't need to reinvent the wheel"?
     
  6. highflyer

    highflyer TS Member

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    They should rename it Obama Motors since he is the fool running it now. He really is a freedom hating commie.
     
  7. ou.3200

    ou.3200 Well-Known Member

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    Where are the lawsuits from stockholders, bondholders and dealers? They have been taken to the cleaners by the Obamaites.
     
  8. Milkbone

    Milkbone TS Member

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    I believe the government will do a great job running GM and Chrystler- just as they've done with the USPS.
     
  9. cubancigar2000

    cubancigar2000 Well-Known Member

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    EE has it 100% correct
     
  10. dverna

    dverna Active Member

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    The big bondholders had insurance. There was no reason for them to negotiate. They get paid with our tax dollars in the end - as we are bailing out the likes of AIG.

    The ones without insurance, stock holders and dealers get shafted. No one to sue in bankruptcy.

    People are dumb. GM stock trading was trading at $.75 late last week with everyone knowing what was going to happen. They figured the government would protect their investment. OOPS!

    It will be interesting to see how the government plans to divest its huge position as majority stock holder. The UAW is in for a rough ride as more concessions will be wrung out to reduce direct costs to competitive levels. Likewise, management salaries and benefits will be hit as those people are forced to face reality.

    They were heady with the aroma of their own bullshit for too long and believed they were worth every penny they "earned".

    When will credit loosen up? How many Americans can buy without financing? Will there be special tax breaks for buyers of American Cars. Will the public buy American? Is a Toyota with 75% American content more American than a Ford Fusion with 75% Mexican content. Will buying a GM car imported from China really help the US auto industry? Critical questions for the next 12 months.

    Don Verna
     
  11. pyrdek

    pyrdek Well-Known Member

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    My question is how many pension plans, mutual funds and other assorted investor groups, playing with other people's money, are included in the total wipe out of GM Stocks and bonds? If they all left before the GM crash, why did they leave? Did they see what was coming? Did someone tell them it was coming? If they could see it, why couldn't GM see it in time to stop the bleeding?

    If the group investors stayed till they went down in flames along with the other GM stockholders, where was all that "Most innovative financial planning and management" that these groups were always telling their members that was being provided?

    This business course seemed to follow an all to familiar course that I have seen time and time again. The long time employees who brought the place up to where it was a thriving business get pushed out of the way by the new younger, college educated MBA's with little if any practical experience. These people have spent all their time in the classroom and not very much time on the production line or its equivalent. They know what the textbooks say to maximize the instantaneous profits and apply it most emphatically. They also tend to ignore the "old timers" who try to caution people to take a long term look. Their views are regarded as those of the "Old Fogey Stick in the Mud" mindset.

    I have seen this happen with many businesses from department stores, hardware stores, small industry, farming, appliance shops and many others. The course almost always seems that when the son or daughter or other highly thought of new employee take over the business, they make changes to maximize the short term profit and end up losing the customer base and eventually, sometimes in a period of months, killing a business that had survived the bad times and thrived in the good times. When this happens, rather than accepting the blame for their failed textbook business failing, they blame "changing customer tastes" or a "downturn in the economy" or some other nebulous "reason" but never admitting that they blew it. GM appears to be exactly the same thing but on a much larger basis.
     
  12. jimrich60

    jimrich60 Member

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    Given that the UAW contracts remain largely intact in the settlement of these auto companies, and given the general ineptness of bueracracies, the government will never be able to produce a car that they can sell for what it costs to build (same problem that caused the problems in auto manufacture in the first place). They will have to either downgrade quality/build to keep costs down, or subsidize the purchase price to sell them. Hence this government venture will fail within 2-3 years, or keep on only with massive taxpayer support.

    No government has ever really succeeded in the auto business. Witness Britain taking over British Leyland in the 70s. Where is that company today? They also destroyed Jaguar (wags used to say you had to buy 3 Jags in order to have one to drive each day) until Ford bought Jaguar and revamped it fairly well. France took over Renault and Citroen, and eventually had to sell them back to the private market at huge losses in order for these companies to survive. East Germanys government venture in auto bu9ilding resulted in the Trabant. The Soviet Union never could build a decent car, and even the few ever sold to citizens had to be massively subsidized by the government to make them remotely "affordable" The list goes on and on.

    So all Obama is doing is keeping GM and Chrysler going for another couple of years, at a cost of hundreds of billions of taxpayer dollars.

    Jim R
     
  13. bocephus

    bocephus Member

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    They will just force us to buy the new aluminum sardine cans with wheels by making it too expensive to drive our current vehicles.
     
  14. The Rock

    The Rock Active Member

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    Just gave G/M another 90 Billion.

    Rock

    Jim
     
  15. highflyer

    highflyer TS Member

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    Who elected this idiot?
     
  16. ou.3200

    ou.3200 Well-Known Member

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    Generally I would agree that there is no one to sue in bankruptcy but in this case the government is a big target. The administration has taken control of GM and Chrysler. They have taken equity from stockholders, preference position in bankruptcy from bondholders and taken dealer's businesses violating the 5th amendment in the process. The 5th amendment says that the government cannot take private property for public use without just compensation. Anyone doubt that the Obama administration is calling the shots in this mess?
     
  17. Andy44

    Andy44 Active Member

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    Does anyone really know what cars being sold in the USA return more money to American workers? Inquisitive minds want to know!

    AndyH ;-)
     
  18. AKJim

    AKJim TS Member

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    Government is a negative force, i.e. law enforcement, military protection, collecting taxes, etc. GM will become the new Yugo if this is allowed to continue. Government can't produce anything, let alone do it better than private industry. ---Jim
     
  19. RogerNRA

    RogerNRA TS Member

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    The "new" GM--- Government Motors............Roger
     
  20. waterhouselake

    waterhouselake TS Member

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    The government couldn't run the Mustang Ranch brothel in Nevada and turn a profit. How can you not make money where something is sold and you still have it? The usually Obama supporters on this site will be sure to hail their hero. All financial wizards and large stock market investors.....Are we f----- or not?
     
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