Everyone wants a bailout these days. And to be honest, why wouldn’t they? Just in case you’re insulated in some sector of the workforce that is completely unaffected by this recession/depression (health care worker, porn star, professional dreamer, just to name a few), I’ll clue you in on what’s been going on — things suck out here right now.
Bush seems to be all for helping out the automakers, and Obama has implied he’s on board too, and I’m pretty sure the thousands of workers employed at their factories across the country would appreciate the company staying alive, so let’s take a look at what a GM bailout should entail.
Clusterstock pretty accurately sums up Thomas Friedman (of the NYT) and Paul Ingrassia (of the WSJ) opinions on what should comprise the bailout of one of the most American and simply-logoed brands of an era:
- Stock goes to zero
- Existing debt-holders take a hit ($0.30-$0.40 on dollar?)
- Money dispensed in small amounts in return for senior convertible debt, pending the meeting of goals
- Management and board gone as soon as strong replacements can be found
- Union contracts torn up
- Company radically downsized
- Remaining employees offered new, fair employment terms (pay, benefits) which they can accept or decline at their choosing
- Company commits to designing and building cars that people want.
But it would seem getting rid of those union contracts and employee benefits is a harder feat than it seems. In this awesome personal blog posting, a third generation GM familyman explains how GM becoming ‘a healthcare charity’ was their problem all along.
Clusterstock: GM Wants A Bailout? Here’s Our Conditions, November 13, 2008