The Auto Channel Calls for Investigation of General Motors Bankruptcy and Bailout Scam
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By Marc J. Rauch Exec. Vice President/Co-Publisher
AUTO CENTRAL - November 24, 2009: With today's announcement that Koenigsegg Group has terminated its agreement to buy Saab from GM, that makes at least three GM units that were supposed to be sold, that are not sold: Penske's deal to buy Saturn didn't go through; the deal to sell Opel (with maybe Vauxhall included) collapsed and now the German government is threatening war (at least commercial war); and now the Saab news. Of course, who knows what will really happen with Hummer and the Chinese; there's no reason to believe that that will continue.
You may recall that the bailout was contingent on GM successfully unloading these brands
So here's the problem: General Motors took billions of dollars from the American people to stave off disintegration. By doing so, GM was virtually paid, again, for many of the vehicles that were already bought and paid for over the years. The company split into two: one with all the (ahem) positive assets, and the other with all the negative assets along with the creditors and shareholders. Company A, the company with the (ahem) positive assets would move ahead producing such family favorites as a new Buick Regal (someone should have their head examined over this); while the company with all the negative assets, debts and shareholders would be told to go screw themselves. And in between, those brands that were expendable (Saturn, Opel, Vauxhall, Saab and Hummer) would be sold off to outside suckers to the benefit of Company A, leaving Company B with their thumbs up their collective behinds
The purpose of a Chapter 11 bankruptcy is supposed to be to allow a company to re-organize, catch their breath, hold off creditors from closing the business down, and to develop a plan that makes the creditors and investors whole while the company becomes viable again. Of course in practice creditors and investors are almost never made whole, but in the case of large serious companies there is usually some degree of compensation.
Unfortunately, this is not the case with the General Motors bankruptcy. Company B, the company with the debts and shareholders will have nothing. And now that the above named brands have been returned to GM, Company A has nearly all the assets they started with and none of the creditors and shareholders to worry about making whole - or at least half.
THIS HAS BEEN ONE BIG SHELL GAME!
We have been duped. And worst of all, some guy from the Board of Directors of a gasoline company was brought in to front the whole scam.
About a year ago I wrote an editorial* saying that the U.S. should not bail out the Detroit car companies, the gasoline industry should, since they are the only ones benefitting from the continuation of GM, Ford and Chrysler building gasoline powered vehicles. In effect, we now have the gasoline industry owning General Motors and it was paid for with our money, not gasoline profits. We have paid again and again for wars to protect the oil and gasoline interests, we have paid over again for vehicles that were already paid for, and now via a gasoline industry crony, we have given the gasoline industry carte-blanche to keep pouring their poison down our fuels pipes (and throats).
I want to scream that GM should be investigated and their assets seized, but who can we trust to do anything to protect the interests of the people, creditors and shareholders. The Administration and Congress worked hand-in-hand with GM to do this, the Justice Department signed off on it, and the courts overruled objections to the bankruptcy proceedings. And guess what? We don't hear one word from the government about GM having to return all the money they received for selling off the "un-wanted" brands. We have been screwed and they didn’t even kiss us!