GM Circles the Drain as Bondholders Refuse to be Ripped Off

I would hate to take an equity for stock deal as well.

A committee representing GM's biggest bondholders — mostly big banks and other institutional investors — has opposed the debt-for-equity swap from the start.

Smaller bondholders — individual investors like retirees and families — have also railed against the terms of the exchange. Both groups say the offer gives them too small a stake for the amount they are owed, and some have pledged to fight in bankruptcy court.

With the government and the UAW running the company I would not want to own shares in the company after the bankruptcy. I mean who will buy GM bonds after the government's lowball offer of 10 percent equity? So any debt they raise will have to come from the Treasury from here on in.

I think the big winner out of this will be Ford because they will be poised to steal market share from GM and Chrysler due to them closing so many dealerships so quickly. Also I can see many Americans buying a Ford just to avoid dealing with US Government motors.

The idea of them having to compete with the government shouldn't be a big deal because when has the government ever been good at running anything? They will keep writing big checks that the UAW will cash and the cars will be still continue to be incredibly crappy. I think both GM and Chrysler are pretty much dead and will be an albatross around the neck of the government for decades.