As it used to be said of the Soviet Union, it may also be said of the Unites States government; If you put the government in charge of deserts then there will be a sand shortage soon.
U.S. Could Take Stakes in Big 3
Congress and the White House inched toward a financial rescue of the Big Three auto makers, negotiating legislation that would give the U.S. government a substantial ownership stake in the industry and a central role in its restructuring.
Under terms of the draft legislation, which continued to evolve Monday evening, the government would receive warrants for stock equivalent to at least 20% of the loans any company receives. The company also would have to agree to limits on executive compensation and dividend payments, much like those contained in the government's $700 billion rescue of the financial industry.
In the case of General Motors Corp., such a move could give the government a large stake in the company and may hurt existing shareholders. GM is seeking about $10 billion in short-term loans and has a market capitalization of about $3 billion. The legislation didn't specify what kind of stock the government would take, leaving open the option it could be preferred, common, voting or nonvoting.
Assuming congressional Democrats and the White House come to agreement on the plan, the car industry would be the latest to submit to strict government scrutiny in return for a bailout, joining most prominently the banking sector.
To add insult to injury, the unions which have had a huge hand in paralyzing industry nationwide and also happen to be as corrupt as organized crime, but I repeat myself, now wants an "equity stake" in GM and a seat on the board. This is such blatant blackmail that even Jesse Jackson must be blanching and as such, I think it must be an outrageous bargaining chip.
In a sign of how messy the reorganization could become, the United Auto Workers union is seeking to attach strings to any concessions it makes for the Big Three. Marc McQuillen, president of UAW Local 2404 in Charlotte, N.C., said the union is looking for an equity stake in GM and likely a seat on the company's board. UAW officials in Detroit couldn't be reached for comment.
Any politician that votes for what congress considers a bailout for the
