Color me surprised - GM Stock offering
It was well known that the new shares of GM
were not going to be evenly distributed.
One fortunate recipient was the United Auto Workers. From the
Washington Times:
GM's union recovering after stock sale
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.
A bit more:
Perhaps the biggest losers are the investors in the old GM. None of the bankrupt company's previous stockholders got any money, while the claims of thousands of investors who purchased the company's bonds are still being kicked around in a Manhattan bankruptcy court.
"It gives outraged flashbacks to the old GM bondholders," who remain mired in the bankruptcy proceedings and are unlikely to recover more than 30 percent of their investments, Mr. Reynolds said.
And one last bit:
UAW President Bob King celebrated the success of the stock offering last week. "We know that for the long-term viability and success of our membership, General Motors has to be successful," he said.
He hinted that the union in the next round of collective bargaining that begins next summer may seek to recoup still more of the concessions it made in bankruptcy, given GM's growing profitability.
Good God. The union 'negotiates' wages and benefits up to an unsustainable level, ratchets down during bankruptcy (instead of being ousted entirely) and then announce that they would ratchet it up again in the next round of 'negotiations'. Talk about being useless...
Posted by DaveH at November 26, 2010 2:00 PM