The New GM

General Motors filed for Chapter 11 bankruptcy protection Monday, June 1, 2009, as part of President Obama’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

Obama’s plan is for the federal government to take a 60% ownership stake in the new GM (Government Motors?). The Canadian government would take 12.5% of the company. The United Auto Workers Union (UAW) would be granted a 17.5% share and unsecured bondholders receiving a mere 10% holding. All existing GM shareholders are expected to be wiped out and to lose all of their investments.

So Americans, under the rule of President Obama are now left with an important question:

Would you buy a new or used car from this man?
Would You Buy A Car From This Man?

Of course I could say that the question was largely moot. Obama is set to take ownership of both GM and Chrysler through his control of their bankruptcy proceedings and his control over the US financial sector; American will be left with few choices except to purchase cars from Obama and his government agencies.

On the bright side though, GM and Chrysler - possibly to be combined into a single Government Motors, People’s Motors, or Obama Motors – will have the benefit of both the largest advertising budget in history and the consummate snake oils salesman / used car salesman in America’s history as their spokesman. ;)

Related Reading:

Basic Economics for Students and Non-Students Alike
The People Vs. Barack Obama: The Criminal Case Against the Obama Administration
Basic Economics: A Common Sense Guide to the Economy
The Arsenal of Democracy: FDR, Detroit, and an Epic Quest to Arm an America at War
The Righteous Mind: Why Good People Are Divided by Politics and Religion

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3 Responses to “The New GM”

  1. zhann Says:

    Cute picture. While I am absolutely against the Auto-Bailouts, I must play a little bit of Devil’s Advocate and point out that without these bailouts, the auto industry would absolutely collapse and the investors would be left with nothing anyway. At least this way, someone is left with something. Of course, the Feds make out best … sort of.

    It is also important to note that if the Feds maintain their shares for too long, the dollar will collapse. It is vitally important for them to shed this debt as much as possible. … well, at least thats my opinion on these ‘buying out’ of companies.

    Stolen

  2. jonolan Says:

    Yeah, zhann, but would you buy a car from Obama? That’s only a halfway joking question since some economists are predicting that many people won’t do so.

    As for the Auto Industry collapsing, it would have and it would have been very painful for us all. What’s happened instead will be far worse and for far longer though.

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