Sunday, May 31, 2009

GM Bankruptcy is Largest Manufacturing Implosion in History

The U.S. government anticipates $50 billion in taxpayer funding to get General Motors through bankruptcy. That includes $30 billion in new money. Canada will put up $9.5 billion for the restructuring.

Taxpayers will hold a 60% stake in GM. Let's hope it works better than Chrysler's $7 billion in TARP funding. Uncle Sam wrote that off when Chrysler declared Chapter 11.

Treasury held a conference call on the bankruptcy. Robert Wenzel from EPJ was on the line for those interested in his assessment. He noted what taxpayers get for their $50 billion investment:

The U.S. government will receive approximately $8.8 billion in debt and preferred stock in the new GM and approximately 60% of the equity of the new GM.
Feel better?

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