The United States government is expected to own a 70% share in a restructured General Motors after is emerges from its anticipated bankruptcy.  The United Auto Workers union is expected to own another 20% of the carmaker with the remainder being owned by bondholders and others.  Current shareholders in the corporation will likely get little to nothing in the new GM.

Is this socialism?  Of course.   But it really doesn’t matter at this point considering the fact that the only way on earth GM is going to be able to survive is with an enormous amount of help and money from the Federal government.  The US has already sunk $20 Billion into the flailing automaker and is expected to have spent at least $50 Billion, and possibly much more, by the time all is said and done.  When you’re the only entity around willing to provide a dying company a financial lifeline, you make the rules.  I’m sure the millions of Americans whose jobs depend on General Motors could care less who keeps the struggling auto giant afloat, as long as the paychecks keep coming.  Plus an ownership stake in GM will allow the government to, hopefully, eventually be able to sell off chunks of the company on the market and recoup the taxpayer money invested in the company.

LINKS:

Bloomberg: GM Majority equity stake to be held by Treasury

NY Times: US Expected to Own 70% of Restructured GM

Miami Herald: GM appears headed for a long, complex bankruptcy