Grand Theft Auto: How Stevie the Rat bankrupted GM
Wednesday, July 15, 2009
by Greg Palast
Yesterday, Steven Rattner was forced to resign as Obama's "Car Czar" - awaiting possible prosecution for bribery.
6 weeks ago, we identified Rattner as the man who designed the GM bankruptcy to benefit his banker buddies at the expense of auto workers.
Good riddance to Stevie the Rat and here's why...
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders – led by  Morgan and Citibank – expect to get back 100% of their loans to GM, a stunning $6  billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replaced by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."
Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."
By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.
Yes, I know that there's an exception to the law: if a victim agrees to the theft, it's A-OK. In GM's case, the United Auto Workers union has given its blessing for The Rat's plan to snatch pension assets, but what choice did the UAW have? If the union didn't cave, Obama would have shut the Treasury's check book and made the GM workers eat dirt. In other words, the auto workers were given the "choice" of the color of the shovel used to bury them.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
******
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers The Best Democracy Money Can Buy and Armed Madhouse. He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981.
Palast's latest reports for BBC Television and Democracy Now! are collected on the newly released DVD, "Palast Investigates: from 8-Mile to the Amazon - on the trail of the financial marauders." Watch the trailer here.
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Yer Done GM! slice that piece of cake any way you want to Yer done! You sold me overpriced, huge, gas guzzling, planned obsolescence filled poorly crafted rusting hulks for most my life, then the nips came along and gave me a better deal, so did the krauts! now, the Koreans are in on the act,and the Chinks come online next year! and Yer Done! fat assed, white bastards in your penthouses in Detroit, screwing the secretaries instead of getting down to business! lazy-ass protectionists, payed off by Arab oil to kill the EV-1, smart asses, changing name plates and claiming better designs. We the lower class, will certainly not miss driving old, oil burning, second-hand, worn out, disintegrating, crap to survive! In the new social democratic America we will be able to take buses and trains and save our money instead of subsidizing the rich guy's new ride by paying out through already sore and bloody asses from high gas prices, for your second hand junk! Yer Done! There is a G d! I am glad to see that the only thing that can rise from your ashes is a socialist, government controlled, semi-commie, union involved state owned organization, with the unregulated Bush variety vulture capitalists banished forever! May this new entity see greater sucess, especially with government supervision, and extreme greed gone! I know this makes the U.S.A. a Socialist State, and I know that this means we are approaching totalitarian government interventions in future. I realze this as a precedent setting event! BUT: nothing could be worse than the screwing we have taken at your hands. GM, Yer Done!
GM belongs in bankruptcy; the company is insolvent and has been insolvent for quite some time. Blaming the government for "forcing them into bankruptcy court" denies this simple fact.
What you should be blaming the government for, is pissing away tens of billions of dollars trying to keep the company OUT of bankruptcy. The market is a profit AND LOSS system, and bailing out companies that have losses with tax money is always a mistake. For the sake of those sacred UAW jobs, how many jobs in viable business are being sacrificed?
The American people don't want GM to remain in business. If they did, they wouldn't be belly-up.
-jcr
Not so fast big boy! I survived the fratracide by the labor unions at Eastern Airlines too, and the unions did the same thing there as at GM with only the scope of the pillaging being the difference. The UAW for decades continued to pile up the swag in work rules, lifetime pay, exorbitant demands. They are the villains more than any other entity. They only got what they deserved but in my opinion the bankruptcy should take more than they will. Obama will pull as much out of the fire as he can get away with for the UAW. Two examples of their greed. Mistletoe is a plant parasite, usually with only a few clumps in any given tree. In this case there was more Mistletoe than leaves. The other is the story of the Goose that laid the golden egg. The UAW and their group greed insisted on eating the goose instead of being satisfied to collect a few golden eggs. Ta Ta!!!
Universal Health Care would solve many of the automakers' woes.
Are the GM pension funds still guaranteed?
Is this really a surprise? This is business as usual and a standard method of getting rid of pensions and obligations to pensioners. Take a look at how the airlines did it years ago..
Thanks GP, love the books
But I have a ? What happened to pensions during the M&A/leveraged buyouts of the 80's?
I'm a self educated voracious reader of History(USM 76), a fan of yours. My best friend just retired from 30 yr's GM UAW in Miss. A hard right Christian Republican with all the fixin's, that doesn't read.
The Usual Suspects are busy blaming the UAW for the demise of Detroit.
They are wrong.
Honda and Toyota pay roughly UAW Scale in their transplant plants in Tennessee and Kentucky, as does Mercedes in Alabama. They are subject to the same OSHA and ERISA requirements as are GM, Ford and Chrysler, yet they are not bankrupt.
Ford is not going, hat in hand, to the bailout/bankruptcy window, despite having exactly the same UAW contract as GM and Chrysler.
In any case, labor costs account for seven percent of the price of a US-made car.
The guys responsible for the sad state of Detroit are not on the shop floors, they are in the penthouses.
Americans are dumber than I thought. You can't see the forest for the trees. The point here isn't about the UAW nor is it about GM and its shitty cars; the point here is the power and greed of a few and what they are doing with the encouragement of your government; the illegal and criminal act of stealing billions if not tens of billions of dollars of pension monies which belong to tens of millions of Americans.
Your fury at GM blinds you from the biggest swindle in your lifetime. The fact that you don't care about your fellow Americans speaks volumes.
Go ahead, kick the unions. Let's see how funny it is when your kids and grand kids are working for $10 a week for the new global elite.
And, regarding "Universal Healthcare", what a hoax.
Federal mandate every American adult MUST BUY healthcare. How can you pay for a healthcare premium if you don't have a job? Or if you barely are able to afford the premium what is the point if you can't afford to actually pay for the medical care you need? The ONLY WINNER, fools, are the HEALTH INSURANCE COMPANIES!
Nothing about controlling the actual costs of healthcare itself. No. They want you NOT to go to the Dr. at all and keep paying those premiums. Then, if you are elderly, they don't want to get the care you need. Ask United Healthcare about its $500 billion plan to reduce Medicare....not by controlling the actual cost of medical care or medications...no, but by preventing the elderly from even getting care!
Just say NO to FRAUDULENT so-called "universal" healthcare! We don't want WALMART clinics.
http://www.muckety.com/Stephen-A-Feinberg/14987.muckety
the web of deception, Cerberus LLC......
What kind of stupid fool would actually believe that GM's bankruptcy is the fault of the UAW, much less admit to that idiocy in print?! This is about the big guys, dummies--not the UAW or any other union that has worked and fought to raise the general wages so that stupes like you can make enough of a living to become arrogant. Arrogance and ignorance are a frightening combination. They are the ingredients for the moronic credulity possessed by people like you which has destroyed the future of the working class in the USA. The unions, admittedly, are responsible for enabling this behavior because they raised wages across the board for every blue and white collar worker in this nation, non-union or union, thus allowing the truly brainless to survive and spout their malignant insanity. Just shut-up already. You won. We're ruined and the big corporations rule.
I worked for GM for 8 or 9 years back in the 60s and 70s. Maybe I wasn't too swift but I was still under 30 and could see that GM was my father's company, not mine, when I left. Three years ago I stood at a GM truck plant shipping gate with my younger brother. He was a guard who collected the shipping papers and monitored the traffic. Now you will read a lot about the crappy vehicles that nobody wants coming out of GM factories but I wonder where this nonsense originates. There were hundreds of $30-60K pickup trucks going out of that gate every day and the assembly workers were working 6 or 7 days a week to produce them. It was obvious that they were being shipped to Americans who could not afford them except that the purchases or leases were being financed, by some credit company, perhaps GMAC which was contributing more than 70% of GM's profit at the time. All the auto companies were doing the same. It was also obvious that these expensive vehicles were in demand by some large number of people, at least some of whom could not in any serious world afford them. Suddenly, that plant is closed after 44 years.
Now GM was a poorly managed company 35 years ago.. At the risk of sounding like a bitter loser, I can say that lodge/club membership and other personal relationships were the determining factors in advancement and any small change had to come from the top. It was impossible to get a decision on the simplest matter at any level. I can verify that personally and with reference to the experience of people I knew who worked at various 'management' levels and departments in the assembly complex where I was employed. It was a bureaucracy, continuing day to day in a mold cast 40 to 50 years before. We cannot say it was unresponsive to market demand, however it was one of 3 or 4 major domestic auto manufacturers at that time only slightly disturbed by a slight bit of new German and Japanese competition. So it did not need to respond to moderate threats. But there was a resulting corporate attitude that it was the center of the automotive world, and no degenerate foreigner could ever issue a real challenge except in the cheap crap niche(e.g VW bug).
Well times have changed and the Japanese and others have done the unexpected. Competition is a game of inches like football, hockey, etc. Weakness or the slightest lack of skill can take down the strongest player and team in times of stress. Now this is a time of stress in case some of us are not aware. If the customers, or even a substantial part of the customer base, cannot get the credit they were expecting unless they have a golden rating, they will no longer be buying in the same quantities. And this industry is now very capital intensive, given the high wage scales that have been permitted, encouraged and demanded by management, government. and union respectively. That means of course that a sudden large drop in sales leaves very significant fixed costs to be financed. I would not be surprised if many of the top managers of GM would have difficulty with that concept. (Now there's a real bitter loser shot!) I am certain that Mr Obama, the new owner, has no facility with any such concepts of course, much less Ms. Pelosi, Mr. Frank, or any of their other party counterparts.
Now the question is not 'Why is GM bankrupt?'. The question is 'Why are all the auto companies suddenly in major difficulty at the same time?'. In the year ending March 31, 2009 even Toyota recorded a $4.4 billion loss, coming off a $28 billion profit the year before. Are the leaders there all stupid too? Now I never worked for Toyota and I know little about the current automobile world. But this doesn't look much like an auto industry failing to me, except that GM and Chrysler seem to be sucking hind teat.
This is a government money and credit problem and the poorest performers will be the sacrificial animals. Perhaps the Democans or Republicrats will soon have GM making Fred Flintstone pedimobiles with solar panels atop. But the crisis, though perhaps not the whole auto problem, was brought about by the whole blithering succession of thieving idiots in Washington and New York with their bad substitute for money generating gross overcapacity. And now these bastards are touring the mortuary looking for loose change and bank books in vest pockets. A pox on all of them.
This all started with Ronald Reagan and is the end result of shipping jobs overseas. When you drop tariffs so that it's cheaper to manufacture overseas, you move the jobs away. Even a company that doesn't want to may have to in order to compete with those who already did. But when the good jobs are gone, no one can buy the product. We held off the result for a while by encouraging everyone to buy on credit, but eventually you have to pay for credit.* And then the sh*t hit the fan -- and Voila, you have the whole circle of right wing economic theory showing how it doesn't work at all.
*and to add insult to injury, we got usury added to the burden: exorbitant interest rates to make everything even worse. They didn't let the economy die, they killed it, aggressively.
Palast, why not mention that it's secured lenders being paid off? The blog post seems designed to imply the payoff is for "friends of Rattner vs pension funds" rather than "secured creditors vs unsecured creditors."
Many in the UAW that have been saying it for decades are finally correct: "It's not my job."
All part of the master plan. Worry not. GM worker health care will be covered like everyone's healthcare, by the new Nanny state, the good ol'USA paid for by its indentured servants, ...er citizens.
Very informative. Behind the cloaking devices of Obama's rhetoric the glaring truth is unveiled. They are killing two birds with one turd. This is the death of GM and the beginning of a centrally planned government run auto industry. Didn't Hitler try that too? The most unprofitable institution on earth - the being the US government is now going to show us how to make a profit?
Meanwhile the bankers make off with more loot by robbing the pension fund. Sounds just like the Social Insecurity plan. We need to End the Fed. The bankers should not be running our government.
If this is true then I have never seen anything that more deserves to go viral.
Everyone should know this is happening, the workers should get some satisfaction. It is so sickening that these folks continue to get rich on our dime. They should be called out, HUNG in the streets. They deserve nothing and get everything, it must stop!Make some noise y'all, make it a story FOX can't not cover.
DO IT DAMMIT!
It is an unfortunate fact that all empires end in corruption, top to bottom, side to side, with all groups pointing the figer across the isle. The internal combustion engine, and the oil economy, is going the way of the horse & buggy. It's time to get on with it.
The sad fact is that every household in America has over $1 million in federal,state,local, and personal debt, the principal is rapidly growing, and it is subject to interest and penalties associated with short-term Treasuries marching up the yield curve.
All the economies were bound together decades ago into a too-big-to-fail global economy, just to delay the day of reckoning as long as possible, and then most everyone that could borrowed every penny they could.
Wealth is a function of putting dinner on the table more effectively today than we did yesterday. That is what got us to 6 billion people on the planet.
The healthcare system does not create wealth. We have one of the least effective systems on the planet. Education does not create wealth. We have the least effective system in the industrialized world. Law enforcement does not create wealth. Obviously finance has not been creating wealth. Fractional banking has driven consumption to replace organic growth. Consumption as 70% of the economy was a pretty good clue. Very little that we do creates wealth. The global economy consumes wealth.
People are not building storehouses of bottled water and canned goods, and guns and ammo are not flying out of the gun shops by accident. Once the system crashes, it's going to be difficult to feed 6 billion people.
The sun is loading up because we have a biomass imbalance. The only difference between a sun and a black hole is time, which is relavent, and the astrophysicists have discounted the fact that our system will not act like others because humans are an accelerant. Don't be surprised if a solar flare knocks out all our computers, and, if we continue on this path, don't be surprised if part of the asteroid belt is released.
We need large returns, which means great risk. Solar and wind are not going to remotely get us where we need to go. We might want to learn from our mistakes with nuclear energy, primarily failing to consider the employment of byproducts, and pursue gamma technology.
Regardless of what we do, there is plenty of work, and we have already proven that we can feed and house everyone, if we really want to do so. With this ray of sunshine, I wish you all well.
I just wanted to leave a comment to let you know I was here and that I enjoyed your blog! Feel free to check mine out whenever you get the chance. If you are interested in promoting your blog, submit an article to my blog carnival! Thanks, Kate
Wow, if this story checks out it would make an already terrible bailout even worse. The trading of pension cash to bankers in exchange for stock that may not be worth the paper it's printed on in a couple years should be spread far and wide.
Uncle B****
If it wasn't for GM saving your ass in WWII you would be speaking Japanese with your Kneepads on. I own a 1972 Chevelle, 36 years old, still running Great. I have owned both Japanese and American cars. My American cars were more Dependable.
By tradition, we begin with the bad news:
The subprime mortgage mess was nothing compared to the upcoming Alt-A, Commercial, and Treasury debacles. The sharks know it, so they are in a feeding frenzy.
Because of the direct and pass-on costs of union labor, it must continually push the envelope on quality in order to justify its existence. It must feed not only itself and the sharks, but the entire system as well, which is why there may be no weak links.
Unfortunately, many union members accepted corporate encouragement to recruit family and friends, despite obvious disqualifications. If management can replace you, or find someone to replace you, they must. That is their job; the fulcrum may only grow if it is balanced.
History tells us that the Tower of Babel always fails; best to avoid it.
Now for the good news:
The sharks are in a feeding frenzy. They are eating each other, and this will go on until there are only a few sharks left. Sharks are simple creatures, and the day will soon come when unions may reorganize. Just avoid the mistakes of this round.
Do not accept lower quality. Do not allow the formation of centralized union bureaucracy. Do not build up large asset positions, within your family or among your members. All these things have one thing in common; they act as bait for the sharks, and the sharks do not stop at the bait. They are simple creatures.
Quality is derived from intelligence and altruism, but there is a time to be a lamb and there is a time to be the lion. Mostly the ability is a random genetic outcome. In any case, you cannot afford free riders.
Finally, many ask me which fund to put there money in or which investment vehicle to buy. My response is: would you walk out into the street, give a stranger $20 bucks to invest for you, and expect a good outcome? Do you really want to tempt a family member that way? The best investment you can make is in your own skills. A little common sense usually gets you to where you want to go.
After thousands of years, we retired one relatively small generation, those that fought WWII and built the greatest empire on earth. Now, we have already spent down the legacy. Self-retirement is pretty much a hoax. You will largely be dependent on others right up until you die. That's why we form unions.
How did this happen?
Round 1:
You are selling hotdogs for $2. I offer you $1 now and another $1, which I insure deposit in a mutual fund for you, payable on Tuesday. Do you accept the offer? Do you accept the offer if the prices are $40k now + $10k later?
Round 2:
You are high quality labor, and you recruit a family member or friend that is not. Your friend, a shark, sees a company officer, a shark, with more money than his pay, he watches the officer, and learns the pension fund is being used as a slush fund. He can’t be management, but he realizes that the slush fund is maximized by creating a ponzi structure, in which he can ensure his own long-term employment, despite a poor skill set. He works his way onto the union executive board.
Alone on the board, his only question to new entrants is: why do you want in? He doesn’t say anything else, and he only votes for those candidates that say they are getting in for the pension.
Round 3:
Years pass, and the executive board has been transformed from high quality labor to minor league sharks. Now, things are really getting shaky. The pension has been looted, and the show will soon become obvious as the retirees increase. The executive board’s decision, without criticism from a highly diluted membership, is to bring in young people and release them after a few years, in a revolving door, to continue pension payments for as long as possible.
Round 4:
The big sharks see the end coming, and grab what remains.
-----
This process is natural. Many human beings have a short attention span. This process has been going on for a few thousand years. Fortunately, wealth is neither created nor destroyed. It is simply transformed, and we have yet to begin to tap the real wealth we inherited from the universe. No economy can function without high quality labor.
They say one generation to make it, one generation to mismanage it, and one generation to lose it. All we can do is live and learn. My dad came out of the great depression, and worked for US Steel. I have worked for 7 unions. The elevator mechanics being the last. It’s the same all over.
At some point, everyone will realize we need to start over, hopefully while there is still plenty of food, clothing, and shelter for everyone. We have the Internet now, instant communications; only our psychology will prevent us from moving forward.
Wealth Transformation:
The wealth circuit begins with quality labor, diffuses across the main body, through iterations dependent on the level of agency in an economy, temporarily resides in the pockets of the oligarchs, and then finds it way back into the planetary economy.
The oligarchs suffer from 3 primary pressures: genetic degredation, power diffusion to hired agents, and increasing competition from growing sharks in the agency body. The agency body of small and medium sharks grows because quality labor cannot or will not cull the body in the middle. The oligarchs would be quite happy to see quality labor cull all the hired agents.
The Tile Game:
Do you remember the tile game we played as kids. There is one open spot and all the rest of the tiles must travel through it to succesfully complete the desired pattern. In a simple two-dimensional game, there are two tiles that control that open spot. Over time, agency interests move into these positions and hold the economy hostage. In the case of GM, that's Rattner and Rubin.
Mythology:
The advantage of quality labor is that, with sufficient back pressure, it will automatically create a new tile game. The nation/state system is an arbitrary collection of geograhically bounded economies, now choking on agency like that provided by Mr. Rubin. Everyday, growth among virtual economies to bridge those mythological borders accelerates. The wealth is not lost; it is being transformed into investment in the next economy.
Conclusion:
We are responsible to each other for education, health, retirement, and all the other needs of our community. Paying agents to avoid this responsibility may only end in financial catastrophe through misallocation of resources. Once agency captures the economic process, corruption grows like cancer, through the replacement mechanism of control fraud.
We may only change ourselves, and that begins with education. We may grow or die; that is the rule of planetary economics.
Greg,
Great Article and really enjoy your perspective.
I showed this to a Friend and he had one outstanding question that is not answered. Why are Morgan and Citi getting paid back 1st? Were they the last to Lend to GM or something?
Thanks for your time and insight!
I heard from a Ford executive, who was told by a Canadian GM colleague, that ALL GM workers (at least in Canada) were TOLD to sell their GM stock.
CEO Rick Wagner sold ALL his GM stock.
Isn't this insider trading?
With this thought, I leave you:
All they got was a number in a computer, representing a claim on future dollar-denominated tax receipts, theoretically, a claim on our future labor. As always, we are free to choose whether we wish to honor such a contract.
They are sharks finding it increasingly difficult to swim in a fishbowl. The losers, if there are any, are those who expected future generations to pay for their profligacy.
As the saying goes, "It's difficult to cheat an honest man."
I agree with Greg. This is looting of the highest order. Looks like we got the shaft playing three card monte with the presidency. Bought and paid for with our dollars. NOt that it would help, but perhaps a letter writing campaign, or log on to obamas website to protest....we cna't just sit back and let this happen
Isn't it funny how we were all fooled to believe that by having a good education, working hard, and investing in our future we would have a comfortable life. Shame on us to believe that those born with the silver spoon would allow commoners to have anything. It's "GREED", plain and simple. Having the family crest or name doesn't make one the brightest light on the christmas tree !!! "NEPATISM"! What a concept!
A major factor in the rise of the Japanese Automakers in the US was that they were allowed to (illegaly) "dump" cars here at or even below cost for years by the Feds, basically in exhange for that country's vote in the UN and other foreign policy support. This facet seems to have been forgotten in the discussion of what happened to the US auto industry. It is very much the case that it was sold out by its own government.
The U.S. population has been, on average, about 5 or 6 times the world's average per-capita consumption of resources. But U.S. auto workers, unlike most of those who criticize them, actually worked damned hard for their share of that over-consumption. Now, if Obama, Rattner and the banksters get their way, many of those auto workers will find themselves under-consuming, while the super-parisites who worked a lot less than the auto workers and consumed a hell of a lot more will continue to consume not 5 or 6, but perhaps hundreds of times the world average.
The good side of this observation is that the world's supposed "over-population" problem can be mitigated, if not totally solved, by eliminating a very small, select part of the population.
Dear Sir,
I think you did an outstanding report on this. One thing, however, is frustrating me. How come the "Govt" gets 8% of Chrysler Corp, 60% of GMC and 0% of Ford Motor Co.?
Is Ford handling its finances that much more wisely?
Thanks in advance,
Ross
PROUD father of an American Soldier
Thanks for the useful info. It's so interesting
No Surprise that GM had to sink like the Titanic.. Just the pain and hard work of 300 Million Taxpayers going down the drain.. Whose responsible for that?
I guess my wife and I might as well file bankruptcy and go on welfare then. Because if I lose my pension too; then I will lose evertthing else. I never should have trusted the U.S.A. government. And; so much for the American Dream. And; Obama is devinitely NOT a Democrat!
GMS CARS ARE PUT TOGATHER BY A BUNCH OF DIKES / MOSTLY BLACK. ALSO LOTS OF MO FOOS. AND THAT UAW UNION CAN KISS MY ASS/ THERE A BUNCH OF DRUNKS/ AND DOPERS. MOST GM WORKERS DONT QUIT WORKING UNTIL THEY DIE ON THE ASSY LINE. THOSE OLD FARTS ARE A BUNCH DRUNKS. WONT RETIRE AT 30 . GET THE NIGGERS AND WOMEN OFF THE ASS LINE THEN GM WOULD MAKEGOOD CARS. THE LAST GM CAR A 1993 BUICK REGAL/ ALT WENT OUT4 TIMES/ TRANS WENT OUT / IGN WENT OUT/ RAD WENT OUT/ FUEL PUMP WENT OUT/COILS WENT OUT// TRUNK HENGE WENT OUT /ALL THIS WENT OUT AT 52000 MILES. THIS SO CALLED CAR WAS A PIECE OF GM SHIT.I WILL NEVER BUY A GM PIECE OF JUNK. ILL CALL IT OBAMA MOTORS/ COMMIE MOTERS GM CAN KISS MY ASS. GO TO CHINA TO MAKE YOUR JUNK GO TO CHINA TO MAKE YOUR JUNK YOU COMMIE BASTARDS
Charlessmiller you are an angry man and I honestly feel for you. You are the one eating yourself alive from
I'm in Canada. I'm Canadian. I'm a lefty, tree hugging, Peace Keeping frog. I am, I swear. I am. I swear. And umm... guys... the coffee's been getting cold since Reagan was elected, Governor of California.
I've met two refugees from California already. One was a PHD candiadate in econimics a UC Berkley. She's waiting tables at a cafe she's a partner in. Get a clue folks. You've taken the first amendment for granted for too long and she just slamed the door on you the day almost 50% of you voted for Bush. And the second is already flirting with the neighbor. Your government is no longer -your- government. You are now living in a dictatorship. Unless you fianlly get your shit together and vote democrat.
Greg, have I told you lately that I LOVE YOU?????
Thanks for posting, I’ll definitely be subscribing to your blog.
Greg, you are missing the point. President Obama is setting the bad guys up. He has to give them a lot of rope to hang themselves. He's using a similar game they used to reel in the entire U.S. economy via real estate investments and then he's going to call it in as an illegal action.
As you are aware, these banks are part of an international cartel. They aren't merely U.S. merchant banks trying to make a profit. Each sentence he speaks must carry two and three meanings for his varied audience. In this case he is leading the horse to water and making them drink.
The lose of jobs is disastrous, but how else to convince the bad guys that he's on their side. He will 'redistribute the wealth' ASAP!
The whole point was to destroy manufacturing in the United States, robert chapman predicted GM would go down nearly a year before it did, HOW IS THAT POSSIBLE? because the insiders know the real score,
cheap labor and we dont have it here, so the birds are burning their own nest we will be crippled by new taxes that privatize air [carbon taxes] but the countries where all the jobs went china & india will not be, we and the west are to be forced by gunpoint into a green straitjacket
government health care will be a nightmare, just this morning a 22 year old man died in the UK needing a transplant, he wasnt on the list 6 months, it was done out of practicality.
Do you really trust the government who wont get us out of this war to give you the best in health care? No declaration of war has ever been issued by the congress for goodness sakes!!! We are there because of a UN [global governance] resolution, which apparently we cant say no to!!! our sovereignty or "right to say NO" is GONE
this is America WE DONT REDISTRIBUTE WEALTH HERE thats the Communist model,
OBAMA IS FOR THE BANKERS the IMF and the World Bank are about to eat us alive! the Vultures are coming here this is the meal they've always wanted
Read confessions of an economic hitman, watch Adam Curtis's The Mayfair Set, read Agenda 21, its all in there, they are following a plan, our mayor [mayor daley=chicago] is giving out leases of our infrastructure
WE ARE THE THIRD WORLD we DONT MAKE ANYTHING
What bush did with a giggle, obama is doing with a Smile,
all the money is going into the RUMSFELD TAMIFLU CRAP, and RIOT CONTROL, dont believe me, look it up, Greg Palast cant think for you!
DO YOU REALLY THINK Chicago The land of the Dirty Politician produced a non strongarm gentrifying, slumlord cozy......
Read Political Ponerology
they dont really care about us!
Please forgive the double post
*hugs*
I think the better solution for this corruption in the auto industry entirely depends on the people working in the government. Let's just hope they don't screw up no longer.
Great article, lots of passion and insight. Keep up the great work, GP.
GM shouldn't retain anymore in the business, things will always get screwed up. GM is already bankrupt, making stuffs get conflicts.
GregR
Palast, why not mention that it's secured lenders being paid off? The blog post seems designed to imply the payoff is for "friends of Rattner vs pension funds" rather than "secured creditors vs unsecured creditors."
You missed the point. The pension funds are secured OUTSIDE of the corporate, via legislation. It does not matter whether the banks are secured creditors or not, the fact that the pension schemes are being forced to liquidate cash in "favour"??? of GM stock in order to pay the banks via a complex scheme is the problem.
BTW, I am South African, and the perception we have here is that Americans cannot think for themselves, and are ruled by fear rather than reason. Add to this, mainstream media feeds you what they want you to know. There are exceptions, and if you read Palast, you are the exception. Been following Palast for years now, and he is ALWAYS on the button
didn't u.s. union auto worker's vote rank and file for obama? too bad.