This is just a disaster in the making:
In better times, many employees of General Motors called their company “Generous Motors” because of its rich benefits.
Now G.M. may stand for something else: Government Motors.
The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about 70 percent of a restructured G.M.
Including the more than $20 billion that has already been spent to prop up G.M., the government will provide G.M. at least $50 billion to get the company through Chapter 11, people with direct knowledge of the situation said Tuesday. By some estimates in Detroit, tens of billions beyond that amount may be required.
The United Automobile Workers, meanwhile, will hold up to 20 percent through its retiree health care fund, and bondholders and other parties will get the remaining share. Shareholders would be virtually wiped out.
Weren’t shareholders already wiped out?
Can anyone find anything to be enthusiastic about in this plan? Anything at all? Would it be cheaper just to make a flat payment to their pension plans rather have the PBGC on the hook?
This whole story just made me want to throw up when I read it.