The taxpayers – really the federal government – and the United Auto Workers got huge slices of the company. Vendors and stockholders … well they got left out in the cold. This was a ‘special’ bankruptcy set up that was never seen before, and as we pointed out, was a pay-off to the unions.
If you were a parts supplier owed money by General Motors, I think you were pretty well screwed, but if you were a union, with leaders who conspired with GM management to put the company on an unsustainable financial path, you were in line for a big pay-off if things went well.
I’ll freely admit I’m not an expert with this particular case, but I know it was handled quite differently than any other bankruptcy case. From the Washington Times.
[T]he 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.
For those of you who owned GM stock … how’d you do?
For those small businesses out there who supplied parts to GM and were owed thousands of dollars … how’d you do?