The Dawning of Obamunism… GM is Officially Government Motors
Stalin would be so proud! The Donkey’s are controlling the cars:
There should be no question as to why the auto industry accepting the new CAFE standards today…
General Motors Corp’s (GM.N) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.
The government’s plans include giving stakes in the new company to GM’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
As I have been stating… we will never see our taxpayer dollars for any of this bailout nonsense. These bankruptcies were inevitable and they just threw money down a black hole!
The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.
Not ‘gonna happen!
If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.
My father mentioned yesterday, on his birthday, that he would be finding out whether or not he would have a job today… GM will follow Chrysler, the question is when and how soon this summer?
Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.
The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.
GM could not be immediately reached for comment.
GM shares were up about 9 percent at $1.29. (Editing by Gerald E. McCormick)
George Soros – stop buying up GM shares for yourself!
The Puppet Makes Budget Cuts… To Help Unions
We all know that Obama is bought and paid for by the unions and he once again proves that he is in their pocket. He makes these grandiose overtures to try and pass off budget cuts of historical proportions or market himself to appear to be improving the national debt.
Those who research and do our homework know that those overtures fall flat, especially when one of the largest cuts from the federal budget is the 9% budget cut of the union regulations department. This comes from the Department of Labor via American Spectator:
…buried in the budget documents released by the White House today is a 9 percent cut in the unit of the Department of Labor that is in charge of regulating unions.
Under the leadership of Elaine Chao during the Bush administration, the Labor Department’s Office of Labor-Management Standards took its job of policing unions seriously. Its actions led to 929 convictions of corrupt union officials and to the recovery of more than $93 million on behalf of union members. Yet the Obama administration has proposed slashing its budget from $45 million in 2009 to $41 million in 2010, citing an insufficient “workload” for the office.
Instead of using the money to make sure unions play by the rules, the Obama administration proposes shifting resources to the department’s Wage and Hour Division, Office of Federal Contract Compliance Programs, and the Occupational Safety and Health Administration — all areas of the agency focused on regulating businesses.
Not like union regulation matters anymore when the Department of Education is growing at a rapid clip and the UAW owns GM and Chrysler. I guess the unions can all manage themselves – no corruption there/sarc.
Half of the budget cuts under Obama will actually come from the defense budget:
About half of the cuts are in the Defense Department’s budget, and the White House readily concedes that Defense Secretary Robert Gates already had proposed much of this as part of a new, and bigger, Defense budget that he is seeking. Defense is growing, not shrinking.
Funny how a recent Rasumussen Report just showed the majority of Americans do not believe the unions or the government will manage the auto industry well.
Another funny side note: Bush actually cut more from the budget than Obama.
President Obama announced fewer budget cuts and for a lesser dollar amount than President George W. Bush did in his final budget – and is counting on being able to eliminate some programs that his predecessor repeatedly tried, but failed, to slash.
Obama administration officials said they’re convinced they’ll have more luck eliminating programs such as Even Start, an early childhood education program that Mr. Bush put on the chopping block year after year but which both Democrats and Republicans in Congress refused to cut.
Liberals are Going Nuts Over the Chrysler Threat Allegations (Perella Weinberg)
The left-wing blogosphere is all a-twitter, no pun intended, regarding the allegations brought forth by Tom Lauria, the lawyer for Perella Weinberg. The allegations stated that several bondholders of Chrysler were threatened by members of the Obama administration and more specifically the car czar, Rattner. I reported earlier on what was said at the meeting, in Tom’s words, to his client.
Progressives are now making this into a “trumped up” charge put on by conservative political activists. In the hypocritical realm of the liberals, they now believe the fat-cats and greedy corporations over regular investors of a fund. The issue with liberals is: “If they didn’t have double standards, they wouldn’t have standards at all.”
It boggles the mind to see progressives deciding that because the White House and a corporation deny a charge, that the charge must be false. Imagine, for instance, these folks accepting a version of events simply because it had been put forth by the Bush White House and Halliburton. But this is exactly what Think Progress and Media Matters are doing. It’s as if their cognitive critical apparatus had simply stopped functioning sometime in January.
We think this is an important story, one that deserves further investigation. Critical questions raised by a credible professional about the conduct of those in high offices of the US government remain unresolved. Excoriating reporters who follow up on these questions doesn’t strike us as very progressive or thoughtful. It seems, rather, evidence of a kind of political mania that we’d all be better off putting aside.
Here’s the full statement by Perella Weinberg:
Suggestions have been made that the Perella Weinberg Partners Xerion Fund changed its stance on the Chrysler restructuring due to pressure from White House officials. This is incorrect. The decision to accept and support the proposed deal was made by the Xerion Fund after reflecting carefully on the statement of the President when announcing Chrysler’s bankruptcy filing. In considering the President’s words and exercising our best investment judgment, we concluded that the risks of potentially severe capital loss that could arise from fighting this in bankruptcy court far outweighed any realistic potential upside.
We have a very specific mandate from our investors, and that is to carefully weigh investment risks and rewards. It is not our investment mandate to pursue political or risky legal campaigns with our investors’ money. This was our assessment of investment risk and reward, nothing else.
While we did and still do believe that the lenders would be justified in pressing their objections under conventional bankruptcy law principles, we believe a settlement would now be in the best interests of all parties in the context of avoiding a drawn out contested bankruptcy litigation proceeding, and we encourage our colleagues in the loan syndicate to pursue this immediately.
This is just another example of favoritism, pay-to-play politics, and sheer cronyism. The UAW is one of the favored groups of the democrats and especially Obama, due to the donations he received from the UAW and other union groups for last year’s election.
Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party. The only possible limit on the White House’s power is the bankruptcy judge, who might not go along.
Michigan politicians of both parties joined Obama in denouncing the holdout bondholders. They point to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.
Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.
The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.
Chicago Thugacracy at White House, Bondholders Play Ball or We Will Humiliate You
This is disturbing! Listen to the audio clip Mark Levin obtained from the White House in which bondholders from Chrysler are being threatened:
