The GM Partial Nationalization Bid Faltering Already

Remember when GM said bankruptcy was impossible because they would lose jobs and it would cost them their reputation? It’s good thing they went with a government bailout… so they could be dragged through the mud for months, have their CEO fired, layoff 21,000 workers, and give half the company to the government.

How is partial nationalization a good choice? It changes little, expect giving Washington explicit instead of tacit control, while wiping out debt holders. With this, Megan McArdle writes that GM is making the moral equivalent of a hail mary pass.

And it’s a pass that looks like it might fall flat. Last night an ad hoc committee of GM bondholders released a statement saying in part:





And why should the backers of GM accept this pittance? They can get more in bankruptcy court, where this should have been all along. Unless the government uses its leverage as the bailouter of some of these debt holders to push them into accepting the deal, it is looking like GM might need a Flutie-like miracle to survive.

Meanwhile, consider the sweetheart deal Fiat is getting from the government for Chrysler.

Anthony Randazzo
