GM's Last Gasps

Yesterday's Wall Street Journal story concerning GM's last-ditch maneuvering highlighted the fact that the firm's latest pre-Chapter 11 offer would give all taxpayers, via the federal government, half-ownership in the failed auto-maker, while it's main union, the UAW, would receive 39% ownership in payment for some of its claims.

That leaves a little over 20%, at best, for bondholders.

But to me, it seems fitting that the two major owners will be those who are most responsible for the way this melodrama is ending.

Washington, under the Bush administration, could have easily denied GM any loans, directing it to seek Chapter 11 protection for reorganizing itself. But it did not do so. By beginning the drip feed of 'loans,' the last administration virtually guaranteed the current outcome.

The UAW, through years of hanging tough on its above-market compensation packages, justly now may own the mess it helped create. Things sure will be different now, eh?

Who will the union blame a year from now, when GM is still ailing and selling few of its largely unwanted vehicles?

Of course, the darker interpretation to all of this is that the government will infect GM like a virus in a host, commanding it to pump out millions of "green cars" and such.

More power to them! Good thing no ordinary shareholders will be around to suffer the financial impact of that mistake.

Perhaps I've become dulled and insensitive to any more of this long-running debacle. I didn't even write an 'I told you so' post when, as I predicted, Wagoner was booted as CEO, fulfilling my prophesy of several years ago that there would be a failed company and/or CEO in Detroit.

I'm so sick of the GM mess that I don't even care what happens to the remaining bondholders. Anyone smart would have dumped GM debt years ago. At this point, in my opinion, let the festering remains that is GM fall to the UAW and the federal government.

Short of bondholders forcing Henderson into Chapter 11, to get radical surgery performed on the company, I don't think it will matter much what shape any negotiated outcome, short of a bankruptcy filing, ultimately takes.