AH, FAILURE AND ITS REWARDS - AT 9:31 P.M. ET: The "new" GM, which looks a bit like the "old" companies of socialist Europe, is emerging, as The New York Times reports:
DETROIT — The government will hold a large share of General Motors after the company emerges from bankruptcy protection, and will provide G.M. with about $50 billion in financing so that it can reorganize, people with direct knowledge of the situation said Tuesday.
The Treasury Department will receive about 70 percent of the new G.M., while the United Automobile Workers union will hold 17.5 percent through its retiree health care fund. The fund also would receive warrants for an additional 2.5 percent of stock in the new G.M., with a price to be determined later, potentially giving it a total of 20 percent.
That is about half of the stock that the U.A.W.’s fund, called a Voluntary Employee Beneficiary Association, or VEBA, was expected to receive under plans drafted this spring.
COMMENT: Bottom line - let's see the cars, let's drive the cars. My fear is that the government will impose Al Gore's vision of a car on GM, and bury the company even deeper.
May 26, 2009