It's been made painfully clear now....multiple times by both the US govt, and General Motors, that the treasury dept. has no intentions of running General Motors. They are not going to be nationalized, and they are not going to become "Government Motors"...yes, the Government has more than 0% influence in the company, and I agree that's too much. But guess what? They borrowed from the Treasury...everything you're seeing and reading is part of making a "deal with the devil", so to speak. It's not unexpected...
A couple things I want to point out first, I figure this is as good a place as any;
They DID NOT fire Wagoner, they asked him to resign in return for more loans because they felt he was not moving fast enough. Though I made it clear that I didn't like this move, and we've all witnessed what Wagoner has done...he wasn't moving quick enough. And if the gov't was to loan out more money...they have decent ground to request the replacement of the guy spending their money.
They ARE NOT dictating what cars are and are not being built. At
most, they're influencing INDUSTRY trends with laws and standards like CAFE and various saftey standards. That is the extend of any product manipulation. As an aside...are cars like the Volt, and Cruze so terribly bad? Anyways.....
I've read reports that state it was General Motor's idea to offer the gov't common stock as a form of loan repayment. This also means the US Treasury will have a member on the board of directers with the intent to protect a taxpayer investment. Lets look at those points....
First of all, it was GM's idea to offer the stock...why? Why make any offer? Why in the world would GM want to give the gov't any more influence?
To sweeten the deal. They want to appear attractive to the gov't to stave off any bankruptcy if possible. They want to put out a sign of good-will. And they want to force the gov't to have a hand in the pot...so as to insure their survival. At least that's why I'd be doing it...How is this attractive? GM stock is going to increase in value, that means the gov't will be able to sell that stock in a year or two, and make more money off the loans than they could have possibly made by a simple repayment. Unless I'm much mistaken, the gov't did this with Chrysler in the 70s, too. And lets be honest with ourselves, does anyone REALLY think that they won't sell the stock the minute it's worth more than they bought it? Even if this administration doesn't, you don't think the next will? Having stake in a company is pointless for a governing body unless there's money involved.
Second, the board member -- this should be an expected condition...This guy's interest in the company would soley be to make sure the company the gov't now has
temporary stake in...doesn't do anything stupid.
Sorry for the long post/rant...I'm just tired of all this fear-mongering. This is one big clusterf**k....we're in difficult times, and some weird things are going to happen. They're not being nationalized, the world isn't ending....relax, already all this doomsday rhetoric is giving me a headache.
