So you may think the government is going to run GM and Chrysler… you may be right.
The Obama administration is preparing to send GM into bankruptcy as soon as next week (May 25th– 29th). Under the plan it would include an additional injection of $30 billion in capital. What’s another $30 billion compared to the billions already spent to bailout other companies right?
Once this takes place, the government will own about 50% of GM while the UAW (United Auto Works union) will control about 39% of GM. The remaining portion of General Motors’s stake would probably be split by the government and Canadian bondholders. Funny because the bondholders have yet to accept GM’s proposed debt to equity offer that is still on the table.
Is this any surprise to you? Didn’t you expect the GM bankruptcy to happen so soon? I think I may have to save up some cash to purchase a new GM from one of these closing General Motor dealerships!
[source: Washington Post]