Here is how you save GM. Bail out is an incorrect approach.
First let’s realize that if they go belly up the government will have to take over the pension fund thru the pension guarantee fund, so just take over the pension plan now. Take it off the books for GM now, buying the pension guarantee fund taking over the gm pension plan; and increasing the health insurance premium and freezing COLA increases in the pension fund. Also take over the Legacy cost of the health care with the “new” plan proposed health care insurance by Obama for national health care. The GM workers and ex workers will have to accept a higher premium for their health insurance if they want to keep health insurance. Next take the same position the federal gov’t did when we “bailed out” Chrysler. With the gov’t having stock options which can bring the taxpayer profit later. Gm needs to be reorganized as if it were in bankruptcy.
The U.A.W. has supported national health care for generations. It was a primary focus for Walter P. Reuther, one of the union’s founders. He began arguing in favor of universal health care after World War II, and was one of the forces behind the creation of Medicare for older Americans.(NY Times)
In the absence of a national system, the union instead secured generous health care benefits for its members and retirees, which have since added up to a $55 billion liability for G.M. and a nearly $100 billion liability for the industry over all.
At G.M., that liability will now be borne by the VEBA, which G.M. will start with $29.9 billion in funding, once the courts and federal regulators approve it.
Ms. Bunker at G.M. said she could not comment on what would happen to the funds in the VEBA if a national health care plan became available. But over the long term, union officials say, the country needs a master plan for health care, which the new institute will be charged with exploring. (NY Times)
It’s not complicated. When I advised Secretary of Treasury and Senator Lloyd Bentsen we realized not to make it complicated. Some things are just obvious. Only congress at large wants to make it complicated. OBTW . . . We need to get Carl Icahn to give the gov’t a plan on how to break up AIG into 3 or 4 companies and let the weak sister fail. Let Icahn have the spoils. Screw the AIG corporate elite.