New vs Old GM. interesting read.

[m1lky]

But everyone including those who lost out here would have lost out had gm just gone under.

 

[SHU-11Y]

Who is GM owned by? If Old GM collapse owing so much do they not then go after the owners other assets, in the case new GM? This may be a dumb question but I don't know how it works

 

[m1lky]

Nope. Debts go down with the company

 

[Reaper]

Thanks m8 I wasnt aware such a high percentage went to benefits like that. I made an assumption, I will never learn , that it would be mostly small suppliers far down the food chain that suffered.

The fact that its the retirement/health fund is not really different though, its just different people being affected of course.

I have vented against unions before, and still despise them (left doesnt necessarily mean union ) so you certainly wont get any argument from me there. The benefits were too high, and the unions are to blame for that.

Part of it is a systemic problem in USA. They had no universal health care system like the medicare we have in Australia. Many companies offered health care as part of their employment contract. This was just taken too far. Things recently changed with the new Health Reform Bill that Obama pushed thru but it is not even close to the comprehensive system we have here (for all of it's failings - I'd prefer to get sick here rather than nearly anywhere else in the world).

However, when looking for a job, assuming you have the luxury of choice, you would be looking at what benefits that job offered vs a different job. Presumably at least some of the GM workers chose to work there specifically because of the benefits that came as part of the employment package.

Auto workers are paid very well. This goes back to the 1914 (? - around then anyway) when Henry Ford raised the wages for a normal assembly line labourer to $5 per day. A massive wage for the day.

They may have planned their life, their debts, their retirement funds, and perhaps even the age they retire at based on the package offered.

If you plan your life, and your finances, around what you think is a contract, I am sure you personally would not be pleased if someone came along and changed the deal retrospectively. You'll consider that you have already kept your part of the bargain, and them honouring their part of the deal is now a necessary part of the future you had planned.

For the past workers the deal sucks massively. I'm not sure if the US government has paid them any compensation and in my way of thinking - a deal is a deal and shouldn't be renegged on later. That said, when there is no more money in the piggy bank there aren't many alternatives.

But everyone including those who lost out here would have lost out had gm just gone under.

Correct. If GM shut up shop completely then the GFC would have taken NA to a whole new league. The flow on effects would have been way beyond anything most people could imagine. NA has enough problems with unemployment as it is let alone the potential doubling or even tripling that rate. The term "too big to fail" is very fitting here.

Who is GM owned by? If Old GM collapse owing so much do they not then go after the owners other assets, in the case new GM? This may be a dumb question but I don't know how it works

Old GM was owned by thousands of shareholders via the stock market. New GM is now owned by the US government (and UAW I think). Since then they have floated parts on the US stock market and will gradually sell it off over time. Creditors may have cause for an action against the directors but the original share holders are pretty safe in that respect as they had zero input into the running of the company. Similar to the shares you own via your superannuation fund - should one of those companies go broke, you will be out whatever you paid for the shares but your liability will probably end there.

Reaper

 

[Pub247]

forget it....