Gm ipo

[Ratickle]

Under that bankruptcy code, established by Congress per Article 3 Section 8 of the Constitution, secured creditors come first. Obama the dweeb strong armed the secured creditors and gave the companies to unsecured creditors (the union pension fund, the government), period. Definitely a breach of Constitutional duty he swore to uphold. And there are many Constitutional scholars who agree and have written articles about it. Search it. The secured creditors have sworn to the strong arming in court.


The creditors
Secured creditors whose security interests survive the commencement of the case may look to the property that is the subject of their security interests, after obtaining permission from the court (in the form of relief from the automatic stay). Security interests, created by what are called secured transactions, are liens on the property of a debtor.

Unsecured creditors are generally divided into two classes: unsecured priority creditors and general unsecured creditors. Unsecured priority creditors are further subdivided into classes as described in the law. In some cases the assets of the estate are insufficient to pay all priority unsecured creditors in full; in such cases the general unsecured creditors receive nothing.

[MarylandMark]

GM IMHO didn't make any thing I liked before or after any of this BS which is why there are 2 Fords currently in my driveway just like my past 4-5 vehicle purchases. I'd like a Vette but other than that I'll always have Fords in the driveway.

On topic- as an investment I'd say they got to wipe out their debt so they should be profitable in the short term (with reasonable IPO price of course).

I want to see GM fail just for the point of it- we should have never bailed them out in the 1st place. I know- all those poor workers where will they go? Well people that use to drive Yugo's drive other brands so the other brands (hopefully Ford) will pick up the lost GM customers and start hiring again. If the US needs X amount of new cars per year that is not going to change. By the way- last time I checked the population keeps growing so demand will be higher in the future which means even more cars needed and so on (once people can afford them of course).

[RLJ676]

GM IMHO didn't make any thing I liked before or after any of this BS which is why there are 2 Fords currently in my driveway just like my past 4-5 vehicle purchases. I'd like a Vette but other than that I'll always have Fords in the driveway.

On topic- as an investment I'd say they got to wipe out their debt so they should be profitable in the short term (with reasonable IPO price of course).

I want to see GM fail just for the point of it- we should have never bailed them out in the 1st place. I know- all those poor workers where will they go? Well people that use to drive Yugo's drive other brands so the other brands (hopefully Ford) will pick up the lost GM customers and start hiring again. If the US needs X amount of new cars per year that is not going to change. By the way- last time I checked the population keeps growing so demand will be higher in the future which means even more cars needed and so on (once people can afford them of course).

Where would they go? On the gov't payroll, on unemployment.

Would have ended up costing more by further driving the recession down, but how could we ruin our perfect "capitalist" society like this. What a joke, just like everyone hoping we fail like spiteful children. All of the regulations introduced by the gov't kept anything from being capitalism to start with. Of all the crap this country wastes money on it's hard to believe keeping people working and some degree of mfg base here is so offensive.

[Ratickle]

Of all the crap this country wastes money on it's hard to believe keeping people working and some degree of mfg base here is so offensive.

The problem though, because of the way they handled it, instead of allowing the checks and balances of bankruptcy law to take place, assures more failure. There will be no success except in the short term due to the total BS allowed outside the law designed to reward good business practice vs bailing out those who cause the problems in the first place.

Same thing with banks. Name one banker, investment company, loan company where the officers of the operation have been prosecuted and put in jail for flagrant violations of the law.

Plus, root cause of the problem, imports still maintain their status as violators of most laws American businesses are required to obey to manufacture IN THIS COUNTRY......

[RLJ676]

The problem though, because of the way they handled it, instead of allowing the checks and balances of bankruptcy law to take place, assures more failure. There will be no success except in the short term due to the total BS allowed outside the law designed to reward good business practice vs bailing out those who cause the problems in the first place.

Same thing with banks. Name one banker, investment company, loan company where the officers of the operation have been prosecuted and put in jail for flagrant violations of the law.

Plus, root cause of the problem, imports still maintain their status as violators of most laws American businesses are required to obey to manufacture IN THIS COUNTRY......

I mostly disagree here on failing again, at least in GM's case. The business has been changing for the past 4 years, and the BK just made it that much more effective. Products are great (or will be replaced with great ones soon) and the costs are way down which is what will make for success. How we got here was crap but its the past.

[MarylandMark]

Just because I agree with letting GM lay in the bed they made doesn't means I support any of the programs either. What happened before bailouts were bankruptcies- seemed like that worked semi-well for a hundred so years?

[cuda]

They should have gone out of business years ago, and it wouldn't have hurt so bad. Capatalism works, and if anyone knows a better monetery system, call Pennsylvania Avenue in DC.

[Ratickle]

I mostly disagree here on failing again, at least in GM's case. The business has been changing for the past 4 years, and the BK just made it that much more effective. Products are great (or will be replaced with great ones soon) and the costs are way down which is what will make for success. How we got here was crap but its the past.

But, if you were a secured creditor or supplier, you were f'd royally because an outright illegal use of strong-arming by the President. One of my investments lost over 1 billion, and they were secured. So, long term, everyone lost except the Union, Fiat, and Obama's appointees. It will reflect in the taces we pay, insurance industry, automotive industry, and investment industry for a very long time. I believe for the worse. Laws in bankruptcy were made to prtect investors who research the companies they invest with. Not to prtect companies which are poorly managed, and have payrolls which can't sustain the wages.

[cuda]

But, if you were a secured creditor or supplier, you were f'd royally because an outright illegal use of strong-arming by the President. One of my investments lost over 1 billion, and they were secured. So, long term, everyone lost except the Union, Fiat, and Obama's appointees. It will reflect in the taces we pay, insurance industry, automotive industry, and investment industry for a very long time. I believe for the worse. Laws in bankruptcy were made to prtect investors who research the companies they invest with. Not to prtect companies which are poorly managed, and have payrolls which can't sustain the wages.

That is capatalism in a nutshell.

[cuda]

Anything with the government's hands on your money, is socialism, plain and simple. Communism is socialism at the point of a gun.

[Wobble]

Just because I agree with letting GM lay in the bed they made doesn't means I support any of the programs either. What happened before bailouts were bankruptcies- seemed like that worked semi-well for a hundred so years?

GM got saddled with all those overheads during the various strikes in the seventies, thats when they were hobbled. A bankruptcy was inevitable, amazing that it took over thirty years.

Here is an interesting article about the 1979 Chrysler bailout

"A Law Is Passed to Make the Workers Give Up What They Had Won
The Carter administration played the leading role in the Chrysler concessions, which very quickly shifted labor into reverse gear. In 1979, Chrysler, the smallest of the Big 3 car companies, was losing money and taking on debt, as much as 1.5 billion dollars. There was talk that Chrysler might go bankrupt, and the banks said that they would refuse to extend further loans without some kind of guarantees.

The Carter administration stepped in. In August 1979, just when the new auto contracts were being negotiated, Carter's secretary of the treasury, G. William Miller, announced that the U.S. would provide 750 million dollars in loan guarantees. However, he stipulated that sacrifices would have to be made by the Chrysler workers.

At first, all this talk seemed like the usual posturing that takes place during contract negotiations. Doug Fraser, president of the UAW, balked at the government demands. The UAW had never given up open concessions before. But faced with a chorus of government demands and bank threats to call Chrysler's loans, the UAW began to agree to give back a series of things it had won earlier. The first concession was the smallest, amounting to 203 million dollars in wage and benefit cuts; this came in the Chrysler contract, which deviated from the pattern set at Ford and GM. When that contract was presented to the workers and ratified in October, it was a signal that the biggest unions would not follow the miners' lead. The threats of dire consequences increased; most politicians proclaimed that the government shouldn't give loan guarantees, but it did, only on the condition that workers give still more concessions. A parade of federal, state and local officials threatened that hundreds of thousands of jobs, not only at Chrysler, but all the other places that depended on Chrysler's business, would be lost. The UAW agreed to renegotiate the contract it had just signed.

A final agreement was worked out by Congress in the House and Senate banking committees. The Loan Guarantee Board was set up to administer the plan. An actual federal law spelled out the sacrifices that Chrysler workers were to make: 462 million dollars in wages and benefits from union employees and 125 million dollars from nonunion staff. The new contract was ratified three months after the first, in January 1980. Twelve months later, the Loan Guarantee Board came back and demanded a third round of concessions: 673 million dollars, including a $1.15-an-hour cut in wages. These new concessions were ratified in January 1981. The rapid collapse of what had seemed to be the most powerful union in the country proved that the unions could be brought to give back gains registered in their contract. Workers could be made to agree to lower their own standard of living.

Other smaller unions, like the URW (United Rubber Workers), had previously agreed to concession packages. But this collapse of the UAW before the government and corporations proved to be the wedge that opened and generalized the concession drive. The UAW's agreement to concessions at Chrysler brought pressure to bear on other unions to do the same.

In railroads, trucking and even local and state governments, the bosses could not wait for labor contracts to expire. They lined up to demand contract re-openers, and similar concessions to those given at Chrysler. The workers gave up COLA and other wage increases; at a time of high inflation, this resulted in a real decrease in the workers' standard of living. Benefit cuts became standard. Blue collar workers began to join white collar workers in seeing their real wages fall, and even rapidly.

The Democratic president, working together with a Democratic controlled Congress, had imposed concessions on Chrysler workers which opened the way to a vast drive for concessions by all the corporations. They also presided over a new economic downturn, with more high inflation and unemployment. In protest, the union apparatuses sat out the 1980 elections, and many workers voted against the Democrats, that is, for Reagan."

nothing ever changes

[MarylandMark]

When speaking of the auto industry I always hear about the suppliers and how many jobs are tied to the auto industry and how the sky is falling if they fail and so on. When going under bankruptcy protection what happened to all of them? I was under the impression GM said F off and didn't pay them. Sounds like those suppliers would be better off supplying someone other than GM to me. Cutting dealers, suppliers, workers at the dealerships, etc- why did it cost us billions and billions for them to do that? Why couldn't they have failed and done the same thing? So what was it again our billions and billions really bought/saved/invested in?

Billions and billions in bailouts is just prolonging the misery and now we are hundreds of billions in debt for it. Should have let them fail (as they didn't pay suppliers, jobs were cut, dealers chopped anyway). Auction the assets, they are bought and and I'd bet the new owners would be more viable and be able to provide better jobs sooner without us being billions and billions of bucks in debt over it.

[RLJ676]

When speaking of the auto industry I always hear about the suppliers and how many jobs are tied to the auto industry and how the sky is falling if they fail and so on. When going under bankruptcy protection what happened to all of them? I was under the impression GM said F off and didn't pay them. Sounds like those suppliers would be better off supplying someone other than GM to me. Cutting dealers, suppliers, workers at the dealerships, etc- why did it cost us billions and billions for them to do that? Why couldn't they have failed and done the same thing? So what was it again our billions and billions really bought/saved/invested in?

Billions and billions in bailouts is just prolonging the misery and now we are hundreds of billions in debt for it. Should have let them fail (as they didn't pay suppliers, jobs were cut, dealers chopped anyway). Auction the assets, they are bought and and I'd bet the new owners would be more viable and be able to provide better jobs sooner without us being billions and billions of bucks in debt over it.

All direct (car part) suppliers were paid in full all through BK, as that was part of being an ongoing business.

Again, there is no "prolonging" the misery. GM was huge and saddled with a ton of legacy obligations for being so big for so long when the market was very different (3 local competitors only). Those costs are gone, along with a ton of other problems that couldn't have been shed otherwise (dealers, brands, etc).

So, the new stock has a very good chance of making a lot of money.

You people are rediculous, acting like GM has been losing money for years and years. It's been since 05, and in case you aren't aware, the development cycle for a car takes 4 or so years, along with 3-4 year labor contracts.

Ratickle, I'm nearly positive (but could be wrong) none of GM's bondholder's were secured (some of Chrysler's were).

Finally, the idea that this country was truly capitalist before hand is completely rediculous. Between the regulations, open borders to countries with closed borders and completely different labor, etc there was never anything similar to capitalism. But I forget that everyone on the internet is a econ expert with in depth knowledge of the auto industry.

Edit: I'm not trying to come off as an a-hole, but it's tough to see people hope you lose your job in an already tough/stressful time.

[Ratickle]

There is tons of stuff out there. You just gotta look.

Illegal as all hell.......


"On the day that Chrysler LLC filed for bankruptcy in New York courts President Obama blamed ’speculators, hedge funds, and others’ for what he called ‘holding out for an undue profit’.

Why this was ridiculous is that bankruptcy contract law states that bond holders are first in the food chain to receive compensation for the notes they own. That is why companies sell bonds in the first place, to build capital and the investor, under contract law, has first claims on reimbursement should the company end up in bankruptcy.

When Chrysler filed for bankruptcy President Obama attempted to capitalize on the ignorance of the American people who don’t understand what bond holders are, or even what the law says. Instead the President attempted to paint an image of these bond holders as greedy hedge funds who were out to make a killing and only thinking of themselves. An insult to the bond holders and an insult to anyone who really knows what should happen in bankruptcy filings.

Under the threat of retaliation by the Government, bond holders caved in and took substantial losses on what they were owed had the contract law been followed. President Obama and the auto task force went around the law and then blamed those who were ‘following the law’ with being speculators and greedy.

A White House proposal to keep the automaker out of bankruptcy calls for investors to share a 10 percent stake in a reorganized GM to cover their $27 billion of bonds.

However, the government would get 51 percent to repay $10 billion of bailout funds, while the United Auto Workers union would receive 39 percent for sacrificing $10 billion in retiree benefits.

"

[Ratickle]

GM had global liabilities of $176.4 billion as of Dec. 31, 2008. Banks such as JPMorgan Chase & Co. secured GM’s revolving loan of about $4.5 billion with inventory, receivables and factories, also providing a $1.5 billion term loan. The face value of its bonds was $27 billion.


Chase was secured bonds.....



The Chapter 11 proceeding will slash GM’s consolidated debt to only $17 billion for the new entity, GM said in a statement. The number excludes liabilities such as its obligations to the employee health-care trust.


So, in other words, the rest of the world ate about $160 billion of debt and the government and union took the company from it's secured bond holders.....

The Union is an unsecured creditor by the way.

[MarylandMark]

No a-hole in my book man- I'm learning a lot from you and not trying to act like a know it all by any means.

I'm glad they suppliers got paid. I was under the impression most of them were left high and dry. I don't know the terms- Tier 1, Tier 2, etc I think. Did only the top tier get paid and the rest SOL?

GM has been losing money for years IMHO- if not on the books then by skimping some place they shouldn't have like R&D and obtaining top secret info like the Japs were kicking their azz. They should have seen these problems coming- the rest of the world did- and changed their product/business model accordingly. Anyway- as far as prolong I am talking like 6 months ago should have let them fail, saving us countless billions and they would be turning a profit by now. In the end it is the same result that happened isn't it (sans the billions are gone)?

How were those dealers, legacy cost, "problems", etc made "gone"? I thought by going bankrupt? If so- why couldn't that have been done by well- going bankrupt $25B+ ago? This report says the autos may get a total of $97.4B by the time it is all said and done. I'm sure that is sensationalized to some extent (ok maybe even a lot) but $25B is still a lot of loot in my book.

And to address the fairness- I agree. Their hands were tied for a long time and they weren't one a fair level playing field but it is what it is. As long as one can mine a piece of steel in the US, ship it to China, have some thing made, ship it back, pay tariffs and sell it cheap and still profit more than they could make it for in the USA we will have a problem. We could have a whole new thread on all that stuff but the bottom line is GM was making Hummers while Japs were making hybrids.

I'm sorry to see people lose their jobs- to me that is all caused by the front office with the blue collar guy paying the price. BS! Every one always wants to take from the guy that showers at night than the one that showers in the morning.

I work for a phone company- walked in to work today to have them tell us any one hired after 2003 will be gone by the end of the year. 15% of the people in my group will be gone. One of those will find out when she gets back from maternity leave. We are feeling the pain and it sucks. Next round of cuts coming in Oct 09...

[MarylandMark]

while the United Auto Workers union would receive 39 percent for sacrificing $10 billion in retiree benefits.

Total frickin BS IMHO!

I could go make $10-$15 per hour more starting Monday but I choose to work where I work for things like free medical and dental- now and for life! We have a tiered contract so I should have it for life as they promised; anyone hired after 2003 doesn't have the same plan. That is fine- they were hired knowing what they were being compensated- to back out of the promise after someone put their time in and retired is frickin BS!

[Ratickle]

That's too bad.

However, when our government requires our companies who manufacture here to follow more strict, and much more expensive, rules. The outcome is inevitable.

They could have easily fixed these issues, but once again chose to make them worse for the US businesses. It will bite us again in the near future, and all of your kids and grandkids will have a much worse life than you have had.

You think it's bad now with unemployment? Wait till the health care and green-house gas taxes take effect. We already have the highest business taxes in the world, that's why Fiat now owns Chrysler, and every major beer company in the country has been sold to overseas corporations.

Don't you just love the Budweiser boats racing this year????

[Ratickle]

Total frickin BS IMHO!

I could go make $10-$15 per hour more starting Monday but I choose to work where I work for things like free medical and dental- now and for life! We have a tiered contract so I should have it for life as they promised; anyone hired after 2003 doesn't have the same plan. That is fine- they were hired knowing what they were being compensated- to back out of the promise after someone put their time in and retired is frickin BS!

You will lose it in your lifetime I believe. Be prepared as well as you can. In the new plan, it is to be taxed as income to pay for those who don't currently have paid health benefits.

[MarylandMark]

You will lose it in your lifetime I believe. Be prepared as well as you can. In the new plan, it is to be taxed as income to pay for those who don't currently have paid health benefits.

I think you are right and I'm planning on it. I'm marrying a Nurse Practitioner. LOL! They claim our pension/health care account is fully funded and has enough to pay who is under the pre-2003 benefit package so we shall see. We've never had any payments in to the plan postponed/shorted/owed like most of these other companies have had to do so I guess that helps. The claim is they don't offer the pre-2003 plan any more so it won't be a legacy cost going forward.

The health care plan is a bigger pile of sh1t than the auto bail out is. I'm still looking in to it but it still looks like it will be cheaper to pay the tax on my benefits if they go that route than have to pay the premiums outright. Now if they make it free for everyone like they are saying I want a raise since they won't have that cost any more. Good luck with that one huh? LOL!