This article is the tenth in a continuing series chronicling the unfolding history of the Obama Administration. The writer’s opinions are not offered, leaving the readers to arrive at their own conclusions.
“What I have no interest in doing is running GM”__Barack Obama, President United States, June 1, 2009
Day132/June1st/Monday: From the Grand Foyer of the White House, the President commented on the restructuring of General Motors (GM) and the car maker’s bankruptcy filing. He also praised the merger of Chrysler and the Italian automaker Fiat. “What the completion of this alliance means is that tens of thousands of jobs that would have been lost if Chrysler had liquidated will now be saved, the President said, “and that consumers have no reason at all to worry about a restructuring—even one as painful as what Chrysler underwent.”
The restructuring of GM, however, will:
(1) require the United Auto Workers to make further cuts in compensation and retiree health care benefits
(2) require GM shareholders to give up the remaining value of their shares, which are, now, worthless
(3) provide unsecured bondholders with an equitable outcome that will let them recover more than the current value of their claims, and substantially more than they would have recovered if the government had not intervened and GM had liquidated
(4) the United States government will invest an additional $30 billion (on top of the previous $19.4 billion) in GM that will entitle American taxpayers to ownership of about 60 percent of the new GM.
(5) GM will be run by a private board of directors and management team, not the government. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.
(6) GM warranties will be backed by the United States government The United States government will accelerate the purchase of a federal fleet of cars to jumpstart demand and give the industry a boost. Of GM, the President said, “As this plan takes effect, GM will start building a larger share of its cars here at home, including fuel-efficient cars. In fact, if all goes according to plan, the share of GM cars sold in the United States that are made here will actually grow for the first time in three decades.” Transcript Video
The President met with his national economic staff in the White House.
The President traveled to the National Naval Medical Center in Bethesda, Maryland, where he visited with approximately 50 patients and awarded two Purple Hearts.