Uncle Sam to Own GM Without Any of the Perks
GM’s restructuring plan will make the Treasury Department the majority owner of the company, according to Bloomberg. The administration reportedly intends to take as passive a role as possible and will not appoint anyone to the automaker’s board, thereby avoiding the danger that something competent might happen.
GM is currently on the hook for $19.4 billion in government aid, and the money will continue to flow as the company restructures itself, probably through bankruptcy.
The government’s ownership would be for the shortest period of time possible and, as a shareholder, the government would participate as minimally as would be responsible, the person said. No government employees will serve on GM’s board.
A possible bankruptcy at GM, should one become necessary, will be a bit longer than Chrysler’s because of GM’s complexity, the person said. Obama hasn’t made a decision on how much debtor-in-possession financing GM would get in a bankruptcy, and the government will provide adequate working capital during any Chapter 11 process, the person said.