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  • CEO Confirms Treasury is Calling Shots at GM

    In a surprisingly frank statement this morning, General Motors CEO Fritz Henderson confirmed that the Treasury Department is calling the shots on the company’s on-going restructuring. As reported by the New York Times, Henderson stated that GM was told by the Treasury Department to offer bondholders only up to 10 percent of GM’s equity in return for $27 billion of debt.

    “They didn’t support us going above 10 percent,” Mr. Henderson said. “We went to the maximum that they permitted us.” Why 10 percent? According to Henderson, Treasury didn’t give a reason.

    Washington’s control over GM isn’t too much a surprise — it’s been clear ever since Rick Wagoner was fired by the White House in favor of Henderson that the government was settling into the driver’s seat. But Henderson’s comments today provide unsettling confirmation of the degree to which Washington is now in control at the erstwhile private company.

    No wonder the banks are scrambling to turn back their own TARP bailout money.

    Posted in Ongoing Priorities [slideshow_deploy]

    33 Responses to CEO Confirms Treasury is Calling Shots at GM

    1. J.C. Hughes, Texas says:

      Why shouldn't the treasury call the shots at GM ("Government Motors")? The only part that bothers me is the use of extorted (tax) dollars to pay for it all. Now you know the meaning of a "perfect union".

    2. Honey Bee, Texas says:

      I must admit I am new to the world of politics and I do not understand the rules of the games being played by the Obama administration. However, what/who gave the U.S. Treasury the right to control a publicly held corporation? Can someone please explain this to me?

    3. RetCMS, Arizon says:

      Honey Bee,

      The explanation is that we're seeing the first results of the "Change We Can Believe In." Obama told everyone that America needs to be "Transformed." He stated, "We are the Change we've been waiting for."

      It's like asking someone what part of no they don't understand: No to capitalism–it causes greed and oppression of the poor; No to individual or corporate accountability– it causes bankruptcy and unemployment; No to self-responsibility– it causes people to have to sacrifice; No, No, No. Let the Government do it for you. That way, we'll all become dependent on those in power (i.e. democrats) and therefore they will have to be voted back in each election in order to continue filling the feeding trough.

    4. Thomas, Anchorage, A says:

      For some odd reason I have a B.S. in Automotive Technology. I wrote a few papers regarding the UAW and GM two years ago at a time when people were learning that GM spent more on retired employees than it did on raw steel for automobiles. My thesis of old seems to have been realized: the UAW will put GM out of business because they apparently would rather have no job than a lower-paying job.

      Now the President has largely handed over the company to the people that sucked it dry. There is no sympathy from this car guy for the UAW workers without jobs. Blame yourselves.

    5. Pingback: » Financial News Update - 05/11/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    6. BT Sterling Va says:

      Soooo, what happens to the Billions of tax payer money loaned to GM if it goes belly up? Down the tubes, and another couple of billions lost because of their great CEO called Obama! If he cannot run a car company, how do you expect him to run the country? BANKRUPT!

    7. Grace, Florida says:

      It's really a shame you Liberal Loons voted this guy in. What has happed to all the money we've alreay put into GM? Come on – wake up and get rid of these guys. I am ashamed he's our leader.

    8. Lynn B. DeSpain says:

      Well the man did say, "Change!" I guess we all should have considered he meant trading in our dollars for change.

      Hozro

    9. Tom McKinney, Dunwoo says:

      Thank you UAW members for your service at GM. Here is a fact: There are 500,000 retired UAW workers at GM. Where is the money going to come from to pay their pensions? The annual pensions amount to about 15 Billion dollars yearly. (500,000 times $30,000 average annual pension).

      Tom McKinney

      Dunwoody, Georgia

    10. NEAL RASMUSSEN says:

      IF A = B AND B = C THEN A = C…THE UNIONS CONTROL OBAMA,OBAMA CONTROL GM,YOU FIGURE WHO CONTROLS GM WHICH IS FINE WITH ME BUT THEY SHOULD PAY THE STOCKHOLDERS AND CREDITORS FOR IT.

    11. Brad L, Phoenix says:

      With the continued penetration of the Federal Government into the operations of GM and Chrysler, I foresee a very delineating scenario developing in the marketplace. Since there is no law (at the current time) that directs the consumer to purchase a vehicle from any particular car manufacturer, what will happen if Ford’s market share dramatically increases as well as its profits? I haven’t bought a Ford since 1966 (Ford Fairlane GT…nice muscle car), but I will surely buy one now when I have to. If many people feel the same as I, a line may be drawn to force the Federal Government to pass laws to make people purchase their vehicles from selected manufactures. Perhaps then, the socialization policies of the current administration will be seen for what they really are and the people will begin to recognize how far the tentacles of government have encroached into their lives. There are few things that the Federal Government MUST do, some things that the Federal Government SHOULD do, but a whole host of things that it CAN’T do. Running a automotive manufacturing company is definitely a CAN’T.

    12. Al, The Villages, Fl says:

      It all goes back to failed leadership in the banks and companies. They should fail. As for the treasury, it seems to me all that has been done so far by the Obama administration is designed for government control and movement toward a socialist government where the dem party can solidify long term control. It has nothing (except for enough to prevent mass objection from the people)to do with recovery of the recession or what is best for the people as provided for by the constitution.

    13. Jim P Bemidji, Mn says:

      I agree with Brad in Phoenix my next vehicle will be a FORD product.

    14. b.p. north carolina says:

      i'm sure that there will be a good market for chevys in cuba. since obama has opened that door. the government will make a deal to sell their cars there.

    15. Frank W., New Mexico says:

      With the Union in control of Chrysler and GM they wiill run them into the ground and keep having the government bail them out. They will keep raising the wages until the companies go broke. The sad thing is the workers will get less of the money each time the unions get a raise and the Unions will recieve more. They will become powerful again and control both the workers and management. How can you have a fair wage negotiation when the union controls both sides? When in total control unions can be ruthless, that's why 85 percent of the work force is non-union.

    16. John franklin, wisco says:

      J.C. is right on, Government Motors and a the perfect union together again, owning their very own company (at our expense of course).

      It won't be long before we speak of GM like we do the old seventy-eight record.

    17. Angel, Ohio says:

      When I buy a vehicle, it will be anything but Chrysler or GM. I am not going to give my money to the US government. It gets enough money from our taxes.

    18. Clif Albino says:

      This is the first time in my life I have been afraid of my government. I suppose will will have to watch how socialism will make everyone's life more irrelevant-except for the socialists-and then it will one enevitable fail like it always has. Thanks for letting me vent

    19. Gloria, Utah says:

      I'm a boomer in my early 60's and have voted all my life. I'm independant and have voted both ways. I'm not a closed minded person. I'm with Clif. This is the first time in my life I am actually afraid of our Government. I never thought I'd see the day. I'm almost glad my Mom and Dad are gone and not having to watch this. My husband and I have both lost our jobs. 1/2 of our retirement was wiped out. The day Obama was elected we started stashing cash. Just a feeling it was NOT going to be good and he is even more radical than I thought possible. I Tea-Partied and I am NOT a racist redneck Republican. Both parties are not listening. How do you wipe this slate clean and start over?

    20. R Cavolo says:

      Dear President Goodwrench:

      With my next stimulus check I will buy American. I will buy a Ford F-150 with a gun safe. I will never drive an Obamamobile. Electric golf carts are not safe. President Goodwrench what is your Limo get for Miles per gallon. Is it a Hybrid?

    21. Gloria, Utah says:

      I bought my first Toyota in 1991 *a small 4 wheel drive pick-up and it still runs like new* …. I've never gone back to American. Why? They are out of sight price wise because of Union legacy costs and frankly the Toyotas are practically maintenance free and easier on the pocket book. It's my money *or it used to be* and I buy what I can afford when I can afford it. I laughed at the Electric golf carts they want to turn out……. is that telling it like is is or what? Haven't seen one I'd run out and buy. My guess is most people feel the same way.

    22. Truth Hurts, The Rea says:

      Oh for joy a car designed by tax cheat and The one who hides his college grades from the public I will run out and buy one now, as soon as pigs fly or i get my share of porkzialy.red ink mobile!!

    23. Ben C, Ann Arbor, MI says:

      With the cessation of Saturn and Pontiac (so long GOATS and the BeachBoys) we introduce the latest – The BARRYMOBILE from Governmental Motors. Sort of reminds me of the YUGO.

    24. Tim AZ says:

      I don't think Americans will work for the UAW as soon as they realize that their beloved demoncats (liberals) In govt. and their beloved UAW now stand to gain any profits that GM might make. GM employees will be working for peanuts while the UAW and the Govt. feast on the meager profits that might be made. What a delicious irony. So who will work for GM? I guess it will be illegal aliens. They don't mind socialism because they don't know any different.

    25. Pingback: CEO Confirms Treasury is Calling Shots at GM » The Foundry | Cell Call World

    26. toomuchgovernment, C says:

      Just wait till they get 'hold of healthcare' and that will be by July 31, 2009!

      Think its bad now with GM-Government Motors. Wait till you get sick and they 'ration' your care! Wait till they tell you 'you can't have the treatment you need or the drug you need.'

      Rationing is the ONLY way money will be saved!

      WAKE UP AMERICA!

      There has to be a revolt, this blogging is getting us nowhere!

      Someone become a leader before its too late and lets take our country back!

      This Obamination has been only going on for less than 120 days and look at the socialistic government that we have already!

      What is this country going to look like in 4 years?

      We are looking at a 2 term president IF we don't get off our 'duff's' and start a movement to take our country back.

      I say lets do a march on Washington, DC!

      Anything! BEFORE ITS TOO LATE!

    27. Glen, Texas says:

      Wow, what a surprise! The government controlling GM. Sad part is the odds are they will still have to file bankruptcy. Here's a novel idea, why not fire upper management, vote in a new board of directors and run the company like you want it to succeed. Oh but that would take standing up to the UAW.

      Gloria, in Utah, to answer your question about starting over, I believe the only way is a true "grassroots" movement, voting in someone who is not a professional politician or lawyer. That's the really tricky part, finding someone who truly wants to be the voice of the people.

    28. Ron, Derry NH says:

      We once had a system based on Offered service and trade, which promotes freedom by giving power to the Buyer, the American people, and promotes the individual to seek his own worth. The right to choose, deny or even ignore a product is the bases of freedom in the market place thus your life.

      We have entered the world of Obama and extortion is its model.

      Forced government intervention, forced mandated pay scales, force mandated health care, force mandated debt.

      There is no more choice, no more freedom since we were forced to support a failing company that should have been allowed to go to the court system for bankruptcy reorganization. The federal government has over stepped its bounds by stepping on the private sectors avenue of market valuation determined by market pressures.

      In one Presidency we have entered into government by extortion and are no longer a free people.

      The world should be happy we now are governed by an extortionist and a group willing to give up freedom and liberty for their own desire for power over others, and the disintegration of value by deed into a world where value is stolen by the most connected to government power.

      Thank you Harvard.

    29. March on Washington says:

      Iwould love to be involved in a peaceful March. The only way we can win is through demonstration and recruting as many as possible. Our generation is being tested, like the generations that came before us. We need to get the word out through one site and schedule rallys and ultimately a March. I need someone with website skills and we can get this rolling! I live in Michigan and my fathers dealership was one chosen to be closed. I want to fight!

    30. Pingback: TARP: Will This Crony Capitalist Slush Fund Ever Die? | Conservative Principles Now

    31. Pingback: Morning Bell: So, How’s That Pivot to Jobs Going? | The Foundry: Conservative Policy News.

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    33. Pingback: Morning Bell: So, How’s That Pivot to Jobs Going? | Step Down Obama

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