So the American automakers are slowly moving toward their final positions. Chrysler put together a deal with the UAW to save them $200 million a year, and similar deals will probably be applied to Ford and GM. Obviously, Chrysler's deal with Fiat must still be consummated. As for GM, looks like we're all going to own it, and I trust this means we all get a discount.
The U.S. Treasury would own at least a 50 percent stake in General Motors under a plan the company released today to avoid bankruptcy.
The strategy would essentially formalize the government's control over one of the icons of corporate America.
"I'm a believer in dealing in reality," GM chief executive Fritz Henderson said in announcing the new plan. "We've gotten great support from the Treasury. It has viewed this matter from day one as a kind of private equity investment. It has pushed us in a lot of ways."
The announcement came as the company said it would further shrink the number of workers, dealers and types of cars in an attempt to prepare it for a United States shrunken by the recession.
Henderson said GM will eliminate 21,000 jobs by next year and phase out its Pontiac line as part of a last-ditch restructuring effort to keep the company afloat and win additional government aid.
Now this would be some ACTUAL socialism in the traditional sense. I understand the concept of trying to save all these manufacturing jobs, but I agree that a state-owned GM, at a time when the Administration is seeking policies that move away from large auto manufacturers with the product profile of a GM, could be a problem. What I've often little understood is why the government couldn't offer contracts to companies like GM to retool their factories to make high-speed rail cars and wind turbines and other physical parts of the green economy. Maybe this could be a step toward it.