U.S. Expected to Own 70% of Restructured G.M.
DETROIT — In better times, many employees of General Motors called their company “Generous Motors” because of its rich benefits.
Now G.M. may stand for something else: Government Motors.
The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about 70 percent of a restructured G.M.
Including the more than $20 billion that has already been spent to prop up G.M., the government will provide G.M. at least $50 billion to get the company through Chapter 11, people with direct knowledge of the situation said Tuesday. By some estimates in Detroit, tens of billions beyond that amount may be required.
The United Automobile Workers, meanwhile, will hold up to 20 percent through its retiree health care fund, and bondholders and other parties will get the remaining share. Shareholders would be virtually wiped out.
Although it has been clear for weeks that Treasury would have a majority stake of a reconstituted G.M., a 70 percent share — a figure that could still change — is higher than what had been expected.
So, the government will own 70%, the unions will own 20% and the shareholders will be "virually wiped out."
When can we start calling this naked "socialism" without fear of being called frothing right-wing lunatics?
(More on the GM/Chrysler debacle in the post below.)