Bumped: U.S. Government To Buy General Motors

May 20th, 2009 (28) Posted By Pat Dollard.

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NEW YORK, May 19 (Reuters) – General Motors Corp’s (GM.N) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.

The government’s plans include giving stakes in the new company to GM’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.

If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.

Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.

The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.

GM could not be immediately reached for comment.

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  • DesignR

    In the News Today:

    Ford Motor Company headquarters in Dearborn Michigan was seen to have several white flags waving from the upper floors of the administration building this afternoon.

    A spokesperson from Ford announced that Ford could no longer compete against ‘Free Cars’ from the newly formed Government Motor Cars. Additionally the board of directors wanted the IRS to stop auditing them personally, and wanted their family’s back from the UAW kidnappers.

    Jimmy Hoffa was unavailable for comment.

    • JCD

      Lol! :lol:

  • Scoot

    “In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.”

    What a freaking deal, like it was set up like this all long.

    Please tell me who paid $15.4 billion for this bullshit, and is now forced to take it up the ass?

  • http://bb.bbboy.net/themainepatriotboard Poe

    Someone hand me the lube, my ass is killing me…

  • amy

    My father was a union roofer, so I was raised in a pro-union home. I really feel bad for all of the autoworkers who probably won’t be able to find a comparable paying job, if they’re let go. That being said, I feel that this is the fault of the UAW, the politicians, and the environmentalists.
    How much better off would these auto companies be if the unions weren’t giving so much in campaign contributions? Politicians suck. And the chicken little environmentalists are pressuring the politicians to force these companies to come up with cars that are ridiculous. If I am wrong, someone set me straight, please.
    Michael Savage came up with a good point. If our auto plants are shut down, what are we gonna do if WW3 breaks out and we don’t have companies that can mass produce machines?

    • Chuck O

      Don’t worry. We’ll get our tanks from China like everything else. I’m just pissed about Chrysler and GM all around. First they were too big to fail and we just had to pump a bunch of money towards them to keep them afloat and now they are forced into bankruptcy. Straight up communism is what this all is. The govt in control of every aspect of everyone’s lives.

    • YERMOM

      Unions are destroying America.

  • http://www.dirtydozensbunker.com Sanders

    As goes GM, so goes the American economy.

    Not a new saying. Not a rosy outlook.

  • LOTTIE

    The people in control of the money are the ones to go after. Those pulling the puppit strings just continue the slowly take over of the strenght and the backbone of the world. Have you noticed they continue on as if we don;t know or see. While we try to expose all thats happening. We are left with few options. The people ourselves are to blame. There are more willing to let the government do what it wants than those willing to do what ever needs to be done to reverse this process.

    • DesignR

      Amen!
      We are to blame, us and our parents.

      I remember when saying prayers before class and the pledge of allegiance stopped.
      I did nothing.

      I remember watching political correctness take hold when I was a kid.
      I did nothing.

      I remember my High School making it easier for me to graduate High School.
      I did nothing.

      I remember all of the ‘free love’ hippies talking about how marriage is not the way to go.
      I did nothing.

      I remember when welfare gutted the poor family by rendering the sole bread winner, the father, irrelevant.
      I did nothing.

      I remember when my classmates had abortions, because it was cheap and ‘OK now’.
      I did nothing.

      I sat by and did nothing.
      I knew it was a very bad thing at the time. It was clear as day.
      I thought all I needed to do was to vote Republican and all would be better.
      I was wrong. I’m sorry.

      My generation has let the Constitution down in too many ways to recount.
      But, at the least, I am ACCDF now. There is a chance. I’ll try to atone for past sins.

      Let’s get down to business and do what is needed.

      DesignR

    • YERMOM

      The Day Obama was elected I spent 20 mins apologizing to my son for so utterly failing to stop this.

  • LOTTIE

    We are left with few options to fight them. We get their attention with our tea partys, our arming ourselves to protect ourselves, creating groups, protest, using all the media we have avialable, and contact those we seek to help stop the destroying of our country. So we get distracted with issues of no real importance. They do not use the laws and constitution to do what they do. We have slowlly allowed them to take over us. We have willingly given away our freedom years ago when this proces started. It started when we let people get by with bringing their customs, their religons, their form of government. We have let schools teach our children with their agenda, and create the people they are today.

  • LOTTIE

    All this happened because people were to busy with their own lives to keep informed and give the responsibily of our children over to others. This has allowed them to grow-up selfish, uneducated, taking drugs, creating crime, willing to let someone take responsibily of them. We had it so good for years we wanted stuff, more than we needed. We were used by our greed, power, we didn’t pay attention and we just wokeup one day and we saw what was going on. It is much bigger issue than our politions. There many trying to reverse the damage. We must decide soon what we are willing to do at all cost. We must do this because I for one am not willing to live in the world planned for us that leaves us with few options. We are going to sacrafice our lives so their is a future for our younger :twisted: :twisted: :twisted: :evil: :evil: generations. :gun: :gun: :gun:

  • LOTTIE

    :arrow: Amen Design
    :oops: :oops: :sad: :sad: :gun: :gun:
    :arrow: :mrgreen: :twisted: :evil: :mad: :sad: :?: :?: :gun: :gun:
    OK we know the enemy we know what we need to do. Do it now before they get everything set up to take finnal control. Time is of essence Lottie

  • ji

    Actually Chevrolet was the one who gave into union demands. They didnt have to, no one forced them to.
    Unions are like anyone else, they will ask for the world, but will settle for less. But if you give it to them, they will take it.
    I know some unions that really suck.
    The government should have never ever been involved in this. This was politics through and through.
    After all is said and done, Chevrolet is worse of now, than if the government had not gotten involved.
    Just try to remember what life was like before unions were formed. A lot of the worker rights you have now, were because of unions. Before unions, you had none, zero, zip, rights or benefits and lousy wages.
    If life was so good before unions, why did unions form?
    My dad was a before and after union guy at the same factory. He said before unions, it was 10 cents an hour and no benefits. After unions you got 25 cents an hour and holidays, vacations and health benefits and OSHA.
    The reason companies offer good benefits now, is so you wont vote to bring in a union.

  • ji

    We need to get active in government. This means taking a government job. School board or city council or whatever. Sitting back and being mad doesnt do anything.
    I am helping a guy run for schoolboard.
    You have got to start somewhere. Protests are good, but they dont change many minds.
    Only 15% of the population, during the Vietnam War, was against the war, despite all the protests. It was the length of the war, that made people sick of it.

  • DoubleTap

    Pisses me off that I own a fairly new GM product. I don’t even want to drive the damned thing now.

  • bill-tb

    Auhnold driving down the road in a clown car … Got to see that movie.

  • CBL

    Here is why the Government is taking GM and not Chrysler;

    GM has Hybrid technology on the road
    Flex Fuel
    Development of battery technology and battery powered cars.

    CHrysler does not have anything on the planned let alone on the road.

    It supports Obama’s agenda of 35mpg cars by 2016. So goodbye Corvette, you were fun while you lasted. See ya later Mustang, never a big fun but, occasionally one of oyu will give me a run for my money.

    Hello Volt the $40,000 econobox that nobody will buy, unless gas prices go through the roof, which is next on the agenda by our little Bolsheviks in Washington.

    As a matter of fact, I find it funny that so many people are against Nuclear power yet, are willing to drive a car with a giant battery that will need to be replaced every 5-10 years creating tons of toxic waste. But hey it sure does sound great and nowadays that is all that matters :roll:

    • http://patdollard.com Pat Dollard

      :beer:

  • Saxon

    The answer to the question who could we get to make our tanks and military vehicles should the Empire or WW3 break out may be at hand already.If GM goes to the feds we aren`t completely out of luck.
    The South has many auto companies that are not unionized and if hell breaks loose damn the unions anyway. I realize they make Hondas or whatever other Japanese vehicles but they could possibly retool for war while we did what we had to do. Just an idea.

  • Sully

    Just say no to Obamanomics.

    … and millions of jobs went ‘offshore’ due to unions the last 50 years.

  • PatriotofPast(Thomas)

    Hey… What do 9 out of 10 Cadillac owners say?
    ” Obama da Man”… :lol:

  • http://hellsfreezingover.com John

    Can somebody clarify something for me?

    I heard on the Fox News Channel this morning that the UAW is also going to be part owners of GM…Is that true?

    If it is, can’t we just all look back at the last time a Union tried to own something. Didn’t the Union for United Airlines obtain majority ownership back in the late 1990′s and then two years later United was in bankruptcy?

    What I am getting at is if the UAW is going to be part owners of GM as I had heard on FOX, what is to keep GM from going through the same thing in a few years?

    To me it is putting a band-aid on a gapping jugular wound.

    Not only that but when I return to the market of purchasing a new car, I will never, ever return to GM.

    If there is one thing I have learned in my years of walking the face of this earth, it is that the Government can fuck up anything from a Wet Dream to the American Dream.

    If you think I am going to buy a product that the Government owns, you can forget that…I don’t want any part of that train wreck in progress!

    Have a good one…

    I am out!

    John @
    Hell’s Freezing Over
    http://hellsfreezingover.com

    • DesignR

      “the UAW is also going to be part owners of GM…Is that true?”

      Yes!

      In fact Rush was saying, today, that the UAW does not want to run the company. They fear they will have to lay off their own people and don’t want to be the ones to do that! They destroy the company and admit they could not do a better job. Hypocrites and criminals ALL! If you are a UAW worker, you should hang your head in shame for destroying and American Icon, General Motors.

      I’ve always been a Ford guy, but my heart breaks for all the GM guys out there today. It is a very black day for ‘car guys’ in general.

      I agree.

      Never buy a car from a Government Owned Car Company (GOCC?), period!

  • kevlyn

    May 19, 2009
    Letter from a Dodge dealer
    letter to the editor
    My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

    We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

    I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

    On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as “new,” nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

    Our facility was recently totally renovated at Chrysler’s insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

    HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

    THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY

    This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

    This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.

    HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

    I beseech your help, and look forward to your reply. Thank you.

    Sincerely,

    George C. Joseph
    President & Owner
    Sunshine Dodge-Isuzu