Will they still have their hands tied to UAW and democrats promising to continue the benefits packages to retirees? Will they still fit in profit sharing, etc?
The co went BK due to execs and UAW. Neither gave a rats ass that the company was heading the wrong direction for years. You dont lose billions each quarter with compitent management. Whats next?
A. Cadillac style health care insurance for UAW workers was the biggest problem. The company became a health care provider, versus a car manufacturer.
B. The UAW has been on a 50 year mission to destroy this company. They finally succeeded and received 40% of the new GM from Obama as their reward.
C. If their back isn't broken, it is a matter of time until the new GM goes bankrupt.
<< . If their back isn't broken, it is a matter of time until the new GM goes bankrupt. >>
I agree its only a matter of time for the new GM to go belly up.
The entire auto industry has much too much manufacturing capacity. The demand created by the housing bubble is over. People took money out of their homes equities by selling for a profit, refinancing, and HELOCs. Much of this money was used for auto purchases.
In addition, the Cash for Clunkers program gave a temporary boost but it only stole sales from the future.
That is now all gone and will NOT come back for a very long time, if ever. That means auto manufacturers will have lower demand for many years.
The auto industry will be HIGHLY competitive as companies fight for a bigger slice of a shrinking market. And the New GM will not compete well with the likes of Honda, Toyota and Hyundai.
Therefore, I see the New GM as being extremely vulnerable. Its only a matter of time until it goes the same way as the old GM.
MTLQQ owns equity in the New GM. The New GM is free of the encumbrances of the Old GM. For all parties in the bailouts to receive equivalent treatment under the flexible rules, it should be arranged for the MTLQQ liquidating dividend to be paid in New GM stock pro-rata to what MTLQQ is currently holding. Similar concept might work for some or all debt classes?
Who will pay for "old GM" and the profiot sharing, health benefits, and pensions?
Was this not one of the huge problems is the outstanding ridiculous pensions that were offered and being paid out?
Its a catch 22. Dont pay, you have retirees living on the streets. Pay what the contract states and they live like kings but should not be included in anything for a new GM. What happens?