Bailout Watch 532: GM To Sell to The Feds, Feds To Forgive Debt

Edward Niedermeyer
by Edward Niedermeyer

Reuters is reporting that GM’s bankruptcy plan is just like Chrysler’s . . . only without the Italian middleman. “A quick sale of the company’s healthy assets to a new company initially owned by the U.S. government,” is how the Reuters source puts it. “Bad GM” would linger in bankruptcy to help pay off claims. Meanwhile, the $15.4 billion we (the taxpayers) have already given GM will be “forgiven.” Not literally, of course, but GM won’t be paying taxpayers back. A new BOD will be set up with “the tacit approval of the government,” but Fritz Henderson is said to be staying as GM’s CEO. How long does the government plan on owning GM? What’s the endgame? Why are GM secured bondholders being paid off while Chrysler’s were demonized? Details are still emerging, but nothing answers these or a million other questions yet. Stand by.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Comments
Join the conversation
4 of 27 comments
  • Droid800 Droid800 on May 20, 2009

    @Kaleun GM has quite a bit of valuable IP. Off the top of my head, it includes transmission designs that were used by BMW, Volt-related IP (there's quite a bit there), and certainly manufacturing-related IP. Of all the automakers, GM's IP is probably among the most valuable, if only because there's going to be so much of it. Now, whether that IP has already been replicated by other companies or has been superseded by more advanced technology is a whole other story.

  • Reclusive_in_nature Reclusive_in_nature on May 20, 2009

    I'll take a Bradley fighting vehicle, please. One because I'm still licensed to drive them from my days in the Army, and two because they're more compact and "eco friendly" than the M1. Parrallel parking's a piece of cake when you can pivot steer!

  • Nicodemus Nicodemus on May 20, 2009

    @ JT "The analogy is not exact, but I expect we’ll see a lot of it." I think you're being kind. The analogy is not even close other than they involve large car companies. The story of British Leyland is far more interesting. GMs tale is really one of bad management, Leyland is a web of intrigue even involving Soviet infiltration. It's all here: http://www.aronline.co.uk/

  • HerrKaLeun HerrKaLeun on May 20, 2009

    Droid800: that's the problem that their technology mostly has been superseded already. I'm sure someone has a better tranny already. I own the patents to the fanciest typewriter... unfortunately they became worthless with the advent of computers. not sure if the Volt IP is worth anything as we are still to see the car drive. Their marketing and lobbying is patent-worthy since it got them billions of free $.

Next