http://articles.moneycentral.msn.co...500ba&_p=84011ea1-f66d-4aa6-88e0-b21398ec4e38 There's an embedded video. Although I might not buy the IPO for GM stock, I do think it should be made available to anyone.
Well to be honest I am pretty pissed about how this works out. Lets see. They go bankrupt, fuck a whole bunch of people out of their money, and then get bailed out by the government, and now were still in business and get to give an IPO? WTF is up with that? Why aren't the old stock holders the owners of the company? If anything, they should give away all their shares to the people that paid for the comapany in the first place, for free.
The bond holders lost hundreds of millions and the UAW made hundreds of millions. Now, they stand to gain again. I'll say one thing for Obama- he takes care of those who take care of him.
That's pretty effed up. For all the yelling about how much the government got into things they should not - the way they fucked up the bailout is by not getting as involved as they should have - and exercise better controls of how the bailout money was handled and managed (see the golden parachutes in the financial institutions that got tons of money).
On the plus side, it's my understanding that: 1. GM is actually profitable again. http://www.csmonitor.com/Business/2...tcy-General-Motors-predicts-a-profitable-2010 2. American taxpayers may actually make a profit on this bailout. http://money.cnn.com/2010/09/27/news/companies/gm_ipo_bailout_profit/index.htm If you could say those two things were likely back when the bailout was first proposed, I would've been all for it. So yeah, it sucks that the IPO isn't open to everyone. But remember, the IPO is part of the process of paying back everyone. It's a good thing that people want access to this. It's still got a pretty piss poor ranking by S&P (BB minus) but jeez, at least it's got some value. That's a hell of a lot better than I would've guessed a year ago. This was always about preserving jobs in the face of a possible great depression. It was messy and pissed me off, but at the end of the day you kind of have to scratch your chin and admit it actually sort of worked.
Note: I'm not conflating this with the mortgage crisis bailouts. I'm much less happy with how that's worked out. I was glum when it happened, and I'm more frustrated now. I think people tend to conflate the GM bailout with the housing bailout because it was really expensive and happened around the same time. But they really are different animals. The GM bailout was all about saving jobs and giving GM the room to restructure so it could become productive again. Which it basically has. The mortgage bailout was all about....fuck, I still don't know. I guess saving our economy by artificially propping up housing prices so people wouldn't realize how incredibly fucked they were. Whatever.
The bailouts destroyed housing prices, which are still falling. All it did was allow big banks to buy slightly smaller banks.
So is General Electric, Microsoft and Walmart, and they didn't take any govt "assistance" either. So what? Does that mean I should be depressed that the government bailout of GM appears to have worked?
It wasn't necessary, and it would have "worked" anyhow. The government bailout of GM was a gift of a large automaker to the Union.
Ford was not in the same situation as GM, so to compare the two is pointless. Ford didn't have the insane debt that Chevy did, nor spread itself as thin as GM did (with GM owning parts of, or completely 15 or so car companies).
Ford was in serious trouble as well, but didn't want to tolerate the govt. interference. In fact, the government giving $billions to a competitor isn't exactly a level playing field, is it? Ford was among the big 3 automakers requesting assistance from the government in 2008. Ford requested a $9B line of credit and a $5B loan from the energy department. GM wasn't too big to fail. If it did, some investors would have swooped in and bought up their assets to keep building some sort of cars. Or some electric car maker would have sprung up in its place.
Interesting theory. Who are these investors who would have swooped in? Because my recollection is that nobody was investing in much of anything back then. barfo
Except the banks, right? Didn't BofA buy Merrill Lynch, among several other similar sized deals? The Chinese are going to buy GM at their IPO, haven't you heard! They're investors, unless you want to make the case they're not. There's what, $3T sitting on the sidelines wanting no part of gambling the govt. won't take that money once invested and give the company to a union. That $3T would buy GM several times over. And there's no necessity that there be a surviving GM that's monolithic. Maybe 10 smaller auto makers, more regionalized, would have came out of it.
Pretty sure GM is not a bank, nor would a bank want to buy GM. Can't really figure out what you are trying to say here, but if you really think there was non-government money that GM could have gotten - well, why didn't they? And maybe nothing would have come out of it, because, in the short term, all those unemployed people would have made the economy even worse off than it was, so investment would have been depressed even more. barfo
GMAC isn't a bank? Why didn't GM get private money? Because the government offered money and restrictions that scared off investors. Buy low, sell high. Low would be economy depressed.
Sure... that's complete fantasy. Reality is that no one wanted to buy GM in the state it was in. Yeah, strange how investors didn't buy up everything in sight a couple of years back. It's like the real world is bent on disproving your theories. barfo
You talk like if GM went into bankruptcy, the factories and equipment and office buildings would have vanished into thin air. Or something. When GM was in trouble, they were talking about merging/acquiring Chrysler. Fiat was looking at acquiring GM assets, too. http://english.aljazeera.net/business/2009/05/200954145424711465.html When there's a fire sale, people get interested. When the government is wiping out investors by the $billions (and unconstitutionally at that!), why would anyone want to take a risk?
