This wasn't in the distant past, this was less than two years ago.
The White House came up with the restructuring plan before Chapter 11 was even filed, that basically short circuited federal bandruptcy law. Remember?
Of course I remember! Bush started it!
http://www.nytimes.com/2008/12/19/business/19auto.htmlThe White House raised for the first time on Thursday the prospect of forcing General Motors and Chrysler into a managed bankruptcy as a solution to save the companies from financial collapse.
The White House announced early on Friday that President Bush would make a statement at 9 a.m. Eastern time about efforts to negotiate a bailout for the domestic auto industry.
On Thursday, his spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry M. Paulson Jr. were considering the step.
“There’s an orderly way to do bankruptcies that provides for more of a soft landing,” Ms. Perino said. “I think that’s what we would be talking about. That would be one of the options.”
A senior administration official, however, later described that option as a last resort, to be used only if an agreement for a voluntary overhaul of the industry could not be reached.
These officials said the preferred solution would be to force a restructuring of the industry outside of bankruptcy court, extracting concessions that would make the companies more cost-competitive with foreign automakers.
In return, the Treasury would tap the financial rescue fund, called the Troubled Asset Relief Program, to make loans to the companies.
In other words, the company was largely nationalized.
That claim's been made before but I just don't see the legitimacy to it. How can a company be "nationalized" when the government doesn't run it? From Geithner:
Because of the President's commitment to this industry and the deep sacrifices of all stakeholders, GM and Chrysler have achieved a quick restructuring, and the economy avoided the devastation that would have accompanied their liquidation. Now, with day-to-day management of these companies in the hands of the private sector, the American taxpayers have a better chance of recouping their investment in these companies.
"There is still much work ahead to ensure that GM and Chrysler re-emerge as stronger, more competitive companies. President Obama has made it perfectly clear that it is the responsibility of their private boards of directors and management teams to deliver that result.
As far as your gloom and doom predictions for GM? Seems like they're not doing too bad...
http://www.msnbc.msn.com/id/41754811/ns/business-autos/General Motors Co. posted a fourth-quarter adjusted profit slightly above expectations and its first full-year earnings since 2004.
The top U.S. automaker reported fourth-quarter net income of $510 million after paying dividends on preferred shares, or 31 cents per share, down from the pace of earnings in the first three quarters of 2010 on higher costs to launch new vehicles and a continuing drag from losses in its European operations.
After adjusting for a loss of 21 cents per share on the purchase of preferred shares that had been held by the U.S. Treasury, adjusted earnings per share were 52 cents.
It was the company's first profitable year since 2004 and GM's best performance since making $6 billion in 1999 during the pickup truck and SUV boom.
