I've been wondering which government agency is managing these toads for a while now. I found the answer in this portion of a Pensions & Investments article.
U.S. Treasury Department officials “expect both GM and Chrysler to return to profitability,” the report said. “If this is the case, and the companies are able to make the required contributions to their pension plans as they become due, then Treasury's multiple roles (as an owner and regulator) are less likely to result in any perceived conflicts. However, if the funding of any of GM's or Chrysler's defined benefit plans declines below (statutory required) funding levels, the company may request a waiver” from the IRS “to reduce its required contributions to its plans over an extended period.”Outstanding! People who know nothing about cars or running businesses are overseeing GM and Chrysler for us. Yay!
7 comments:
Am I reading this right? Because these two dogs are owned by the government, they can get a waiver on pension contributions that Ford, for example, couldn't get?
You betcha! My new favorite phrase. Also note that the whole deal to bail them out was a sop to the Democrat's union paymasters, to save these pension funds.
Jeff, not just a waiver but a grant, too! Apparently, the ObamaCare bill included $10B of cash for GM and Chrysler. Outstanding!
Outstanding! People who know nothing about cars or running businesses are overseeing GM and Chrysler for us.
Well GM and Chrysler have been dong this for years.
And we saved them so they can keep on going. Yay!
I don't think the government has any interest in running GM. In fact there's a good chance of an IPO in 2010.
It could actually be somewhat interesting from an investment point of view since it could be valued at 50 billion or more and they may start posting an operating profit this year. Wonder what it would fetch.
If this happens the real losers are Ford since they didn't take any money, and would be valued LESS than GM (45 billion). The other impact would be that the govt would view this whole auto bailout as a "success" and could lead to further intervention \ bailouts.
Pickinmachine, they may have an IPO, but I would be shocked if they divested themselves of the whole thing. There's too much temptation to keep a portion of it since it can be used to dole out political favors, give high-paying jobs to retiring politicians and realize any number of utopian dreams such as electric cars.
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