Tornado Alley (PROG)

[fuagf]

UAW Defends Its Share in GM Restructuring
By MATTHEW DOLAN
MAY 28, 2009

Rotflmao! GEO, i see YOU have shifted from 'SOCIALISM!', fear-mongering, OH NO!!!!, to "hybrid-socialism"!, cuteness. Why is that? Lol, and YOUR's has to be uniquely American, too. LOLOL, do you know? Perhaps, the most unique aspect of the hybrid-socialism, (note: some of us have been reminding you over, over and over again, it has been about for decades), of the US, is the lack of a universal healthcare system. Has Obama taken over Wall Street? Nope. More than other presidents have? Nope.

if Obama and the radical left could hijack wall street...as, you see they have done to the Democrat Party and therefore the US government, Obama can create a unique American style hybrid-socialism because he now has a HUGE source of funding (among others...don't forget the auto industry and the corrupt UAW)....

The United Auto Workers is claiming a significant stake in a new General Motors Corp. under a proposed government plan amid criticism that the union's deal will be unfair to the company's shareholders and bondholders.

The union's independent trust fund for retiree health care will control 17.5% of the new GM, with warrants representing the potential for an additional 2.5%. "However, the warrants issued to the retiree Trust fund have terms far less advantageous than those issued to the bondholders," UAW Legislative Director Alan Reuther wrote to members of Congress Thursday.

According to the plan released Thursday, bondholders will receive an initial allocation of 10% of the equity, with warrants that can result in their receiving substantially more.

GM's offer has advantages for the union and bondholders. The UAW would get more shares and fewer warrants than bondholders, so its warrants would likely be of less value than the ones given to bondholders. But the bondholders wouldn't be able to access the warrants until the auto maker's market capitalization reaches a certain level. GM's market capitalization would need to reach $75 billion in order for the union's trust to benefit from the warrants, while the bondholders' threshold to benefit would be a company market capitalization between $15 and $30 billion.

More .. * GM Bondholders Support New Offer .. 05/28/09 ..
http://online.wsj.com/article/SB124352012143262677.html

GM's current market capitalization is $684 million.

In an interview Thursday, UAW President Ron Gettelfinger said the union had wanted an even larger
stake in GM as part of a deal to move the auto company through its government-led restructuring.

"Would we have liked to have a bigger share? Probably. We worked hard to try to get that number up but it is what it is," Mr. Gettelfinger said. One advantage, he said is "we picked up the preferred stock here." But he reiterated that "the government investment is company is going to be a lot more than what was anticipated earlier on."

The bankruptcy plan for GM outlined in a securities filing Thursday would give the U.S. government a 72.5% stake and keep the auto maker closely held for as many as 18 months. The government is set to boost its support for GM by as much as $50 billion through a bankruptcy filing that could come Monday.

"The biggest factor here is the government investment in General Motors," Mr. Gettelfinger said during an interview Thursday. "The government stake is going to be a lot more than what was anticipated."

Mr. Gettelfinger said that the union had accepted a smaller stake than it wanted in order to help ensure a deal could be completed. He said the union doesn't consider a bankruptcy filing for GM inevitable, though the UAW has made plans anticipating that the auto maker will seek protection from creditors under Chapter 11 of the Bankruptcy Code. In a bankruptcy filing, the value of holdings by current common stock owners is likely to be wiped out.

As the government-imposed deadline of June 1 approaches for GM to complete its revised restructuring plan, Mr. Gettelfinger said of bankruptcy, "we're not sitting here flat-footed but I'm not on the side saying it's a foregone conclusion Are we prepared for it in case it does happen? Absolutely."

Mr. Gettelfinger added that as part of the pending labor pact with GM, the auto maker agreed to build subcompact cars in one of its existing U.S. factories, instead of building those vehicles in China and South Korea and shipping them to the U.S. for sale. He estimated that the car would be built in the U.S. in about 18 months, about the same amount of time it will take Fiat to move its small-car production into the U.S.

He added that three idled plants will be kept "in operational mode," adding "we want those plants to be able to get up and go." He said that GM's plans as fashioned by the government are based annual auto sales in the U.S. of 10 million cars and trucks. But he's convinced that the selling rate will increase dramatically. "We're very hopeful that this will take place," he said.

Fighting back against critics who say that the UAW has been given a much better deal
than bondholders, the union pointed to the "relative sacrifices" being made by retirees.

"As a result of the most recent concessions, retirees will incur substantial, immediate reductions in their health-care benefits," Mr. Reuther wrote in a letter Thursday. "When the retiree health-care fund assumes responsibility for providing these benefits on January 1, 2010, it may be forced to make further significant reductions in health-care coverage, depending on the value of the stock received by the fund."

He added that many bondholders purchased their GM holding at a substantial discount. And unlike GM retirees, the bondholders' interests are often more diversified that those relied on by former auto workers to pay for their health-care needs.

—Sharon Terlep contributed to this article.

http://online.wsj.com/article/SB124353536535963477.html

Posted that to you because of some memory of you implying the UAW members got something
for nothing. Whole thing looks like compromise and jobs. Working together. That sort of stuff.

Oh! .. just remembered. Was it you who said you had a piece published online? Misconception of the 21st C, something like that.

Please post it, if you were the one. Surely you have a link to it.