Not really bankruptcy

Marcie, thanks for the continuous updates. Unfortunately this was not a bankruptcy at all. This was a government reorganization simply being masked by the 363 code of the U.S. Treasury. There were so many more options available, yet the traditional bankruptcy would have caused more pain to the UAW than the Obama administration was willing to permit. It is no conincedence that Tim Geihtner was instructed to “make this happen” directly from the White House in a public effort to “save American jobs”. The unfortunate consequence from this arrangement (just as it is with Chrysler) is that any company that has organized labor attached to it will now be subject to even stricter and more restrictive loan standards. Who is going to loan money to a company with a labor contract for fear that their legitimate leins will be voided because of the precedent now set by GM? The Administration has truly made it worse for organized labor in the long run, because those companies that rely on organized labor have just been marked high risk. Too bad, because organized labor did carry some benefits, such as fixed labor costs for long term planning, minimal points of contact to address large pools of employees,etc. but now with capital being undercut and priced so high, these companies will no longer have any advantage and will soon find out the unintended results from very poor policy making and political payback. The UAW gave the Obama campaign $30 million…
Had it been up to the creditors of GM, they would have negotiated with the Federal government and offered to buy the government out much earlier, but the Treasury was told not to negotiate with the bondholders because if GM went through traditional and legal bankruptcy, the UAW would have to renegotiate directly with the new owners… the creditors. The Administration knew that those negotiations would not go well, therefore they chose to reorganize GM outside of bankruptcy, but calling it a bankruptcy for public relations use. Very sad, that Americans have been sold this situation under the mushroom cloud of daily news hype, that really did not have to happen at all. Fritz Henderson was in a no lose situation. Legal bankruptcy or this so called prepackaged one from the White House…GM came out a huge winner as you pointed out in your note. I personally would have preferred one where the people who were legally entitled to the assets actually get an opportunity to manage those assets they legally encumbered through bond indentures.