General Motors Co.'s recent stock offering was staged to start paying back the government for its $50 billion bailout, but one group made out much better than the taxpayers or other investors: the company's union.
Thanks to a generous share of GM stock obtained in the company's 2009 bankruptcy settlement, the United Auto Workers is well on its way to recouping the billions of dollars GM owed it — putting it far ahead of taxpayers who have recouped only about 30 percent of their investment and further still ahead of investors in the old GM who have received nothing.
The boon for the union fits the pattern established when the White House pushed GM into bankruptcy and steered it through the courts in a way that consistently put the interests of the union ahead of many suppliers, dealers and investors — stakeholders that ordinarily would have fared as well or better under the bankruptcy laws.
"Priority one was serving the interests of the UAW" when the White House's auto task force engineered the bankruptcy, said Glenn Reynolds, an analyst at CreditSights. The stock offering served to show once again how the White House has handsomely rewarded its political allies, he said.
The union's health care and pension trust fund earned $3.4 billion through the sale of one-third of its shares in GM last week. Analysts estimate that it would break even if it sells the remaining two-thirds of its shares at an average price of $36 — close to where the stock traded shortly after the offering hit the market. GM shares closed at $33.45 on Wednesday.
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6 comments:
GM will fail , it will not be here in 2 years. I hope it fails , never will I buy a GM vehicle. They have promoted large gas hogs since obamie got elected. That is so stupid , gas will go to $5.00 or beyond . Be prepared folks , obama the muslim will ruin our country , it is impossible to reverse the damage he has done.
Do you like the change now you idiot democrats?
a simple independent audit will fix everything.hold the line.how is that hope and change thing workin out for ya...
This IPO is merely a shell game, designed to create an influx of cash for the short term. They are "flying by the seat of their pants' and just hoping to hold on another year or two until someone Harvard genius can come up with ANOTHER scam. If you bought any of these shares, your IQ just went down 20 points. Automatically.
I'll buy Ford, the American car company that already reorganized itself and didn't need a bailout. Government Motors won't receive my business. Ford did it the old fashioned way, and the right way.
of course the union came out smelling like a rose. That WAS the plan in the first place!
Don't EVER buy another GM product. If you knew what GM did to their slaried retirees and the active slaried workers you would be shocked. Don't support their criminal behavior!
GM is nothing more than a support mechanism for union health care and pensions
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