Oh no! Obama administration accused by GOP of favoring unions over investors in GM bankruptcy talks!

[ClarkUSA]

The government is seeking to restructure the company, as it has been attempting do with Chrysler, and save hundreds of thousands of jobs.

But as the administration prepares for the court filing, it is also fielding accusations that it is unfairly favoring the United Auto Workers at the expense of the company's investors or, as a group of House members recently wrote, waging a "war on capital."

The fairness question will be central as the GM bankruptcy case goes before a judge this week: Does the government-sponsored restructuring plan equitably deal with the company's various stakeholders?

It is a legal and a political issue, pitting labor against investors, and it will be debated in and out of court.

Similar complaints arose from Chrysler's creditors, mainly banks and hedge funds, but Obama dismissed some of the lenders as mere "speculators," and their legal claims have melted away in court... This time though, the creditors consist of thousands of investors and individuals, as well as institutions. It is likely to become more political.

"The proposal seems to favor the rights and claims of the UAW, a political ally of the current administration and a powerful lobbying force in Washington, over the rights and claims of the company's diverse group of bondholders," according to a letter from 20 House members, led by Rep. Jeb Hensarling, (R-Tex.) to Treasury Secretary Timothy F. Geithner. "Contractual rights of investors are being trampled by the government under the rationale of 'extraordinary circumstances.' "

More here.

First they complain about the Obama's date night while auto workers are in distress. Now, Republicans seem to think the American public will sympathize with investors over union auto workers.

Good luck with that. :rofl:

[Xipe Totec]

1. OH NOES!!1!!!

OBAMA FAVORS PEOPLE OVER CORPORATE INVESTORS!!!11!!

WHat shall we do!!??77??

[d_b]

2. lolz

[CTyankee]

35. Well, I am not a corporate investor but I am an investor. And here's why:

When my mother was needing to go into the Special Care Unit at her assisted living facility, I needed to do something to help pay the extra expense. Since I had power of attorney I had her financial advisor look for the best paying bond he could find. The GM Preferred Stock (Senior Notes) paid 7.5% far more than what she was getting on her various bonds. She had only one source to buy the GM stock: part of the money from the sale of her house. So I made the decision to get the GM stock. You should know that while she was not hurting for money, she was not rich. She had just always been frugal and had invested in bonds to give her a modest, steady income.

As it turns out, she never went into the SCU. She fell and broke her arm, went into the hospital and then into Rehab and then a nursing home. She decided not to eat and wasted away gently, dying a few months later.

That's the story of my mother, the GM bondholder. I wish people at DU wouldn't paint everybody in the GM bond situation with one big brush. It's sad and, frankly, tiresome.

[Xipe Totec]

37. I'm sorry you made a bad investment decision

but why should the workers suffer for it?

[CTyankee]

38. I didn't say they should! No way would I, a liberal Dem, want that!

I don't know how to put this to you. But this was not a me against them situation when I made the decision. It was only to help my mother get the care I felt she needed. How did her investment hurt the workers?

My whole point here is that I am not part of the class that has lots of money to throw around and neither was my mother. She was a small investor. She believed in stocks and bonds that were grounded in what people needed: electricity, heat, water etc. If that's a sin, then well I am guilty too.

[asphalt.jungle]

3. It's an attack strategy that might work

He more than likely won't get any credit for "helping unions" because plants are still going to close and people will be out of jobs. The republicants are going to say he's favoring the unions and the unions aren't going to feel like they were favored in any way. So he's going to get it from both sides.

[ClarkUSA]

9. No, the president of the UAW knows the concessions he's gotten from the Treasury are unprecedented.

I posted an OP about it a few weeks ago. The New York Times did a story on it. If I find it, I'll post it later.

[asphalt.jungle]

13. do the workers believe that?

if they do then great.

[ClarkUSA]

15. The ones whose pensions and medical benefits have been guaranteed by the Treasury are...

and if hundreds of thousands of jobs are saved by this move, I'd expect they'll believe they've gotten a fair shake for once, too.

[asphalt.jungle]

16. ok great then

just as long as it's not a damned if you do, damned if you don't situation for him.

[ClarkUSA]

18. I know what you mean, but I doubt the unions will blame Pres. Obama for trying to save their jobs...

... even if things don't turn out well. But I have to believe it has a good chance of succeeding, otherwise I don't think Pres. Obama would have done it. He said as much himself during an interview I heard live about a month ago. It's better than what Republicans like the ones whining wanted to do, which is let the companies go belly up because of the "free market" and workers have to get that, unless they're idiots, wingnuts, racists, or any combination of the three.

[asphalt.jungle]

20. this is an example of what i'm referring to

Ralph Nader urges President Obama to reconsider GM bankruptcy filing & proposes congressional review

http://www.commondreams.org/view/2009/05/30-0

there is also a thread on here about this.

[ClarkUSA]

23. I doubt the auto workers listen to Ralph Nader. I know I don't.

There will always be naysayers but I think that the UAW membership realizes that President Obama is giving them and GM a chance, so any backseat whining will be seen as just that.

[JVS]

31. If the DUers affected by this situation are any indicator, they're going to consider him guilty of..

screwing them over in favor of the banks. And that's here where he's popular.

[asphalt.jungle]

36. "And that's here where he's popular."

i found that funny for some reason.

[ClarkUSA]

33. CNN has three generations of GM auto workers and they sound hopeful and upbeat.

The segment was with Kyra Phillips and was from 2:35-2:42 p.m. featuring three men from the same family: Richard, Mike, and Roland. Check out the transcript for today and you will rest easier. It's as I said: they are happy with their union president's terms and said everyone had to give stuff up. And they're grateful for the chance to turn things around.

[O is 44]

4. Reminds me of the new web

infomercial they have out about how Obama does not stand with all Americans. They use a clip of Obama stating he does not stand with the hedge fund guys not willing to take a haircut (paraphrasing) and then the RNC guy comes on saying something to the effect that Obama does not stand with all Americans. These people really are stupid if they think after this meltdown that the majority will share a lick of sympathy for the greedy bastards.

You are spot on when you talk about how they were just complaining about date night while the poor American people suffers, and then turn around in the same breathe and side against the same poor Americans in favor of the investors.

[ClarkUSA]

10. lol! I saw the same ad on cable TV and had the exact same response as you did.

Republicans really are stupid. They've completely lost touch with ordinary people. I hope they stay stupid until at least 2010. ;)

[MasonJar]

5. Good for Obama! For the first time ever I actually hope the GOP is correct.

[sandnsea]

6. And some DUers too

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5750188&mesg_id=5750804

[ClarkUSA]

7. Wow. But why am I surprised? We've seen wingnut talking points here in GDP, too.

Link: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8442033&mesg_id=8443098

[Cha]

11. I'm ignoring that

author but shouldn't it be alerted on? Without announcing it, of course..I found out the hard way that you don't broadcast you're going to alert on that post or thread as it's against the rules.

[sandnsea]

12. Why?

They're entitled to think the bondholders should have priority in a bankruptcy.

[Cha]

17. Okay, I understand now. n/t

[Vincardog]

8. The GOP favors any group of bondholders over any group of working people period

[dkf]

14. You do realize that the only reason the UAW is getting anything is because

they are owed money?

Same as bondholders?

Really, it is only fair that the company be allocated based on the debt that is owed to them.

[Better Believe It]

19. We have a defeated work force in full retreat before capital. The UAW has been destroyed.

A gun has been placed against their heads.

Surrender to wage cuts, pension cuts, health care cuts, and other demands or lose all of your jobs.

Is it any wonder why the union workers vote in favor of cutting their benefits, cutting tens of thousands of jobs and worsening their working conditions?

And the top union bureaucrats don't know what to do or how to lead.

We have a defeated work force in full retreat before capital and its political representatives.

This is a sad day for American workers and union members.

The once great United Auto Workers union has been destroyed as a viable labor union.

[vaberella]

24. What does your post have to do with the OP?

As a matter of fact the OP is the total opposite to your post.

[SpartanDem]

21. Yeah the poor poor investors

:eyes:

[Abq_Sarah]

29. Let me ask you something

What do you think would happen to companies and to jobs if "poor poor investors" didn't put money into those companies? Additionally, what would happen if investors decided they no longer wanted to buy US Debt? That's starting to happen now. Investors need to be assured that the government will not take actions that make their investments worthless.

[ClarkUSA]

22. President Obama 's speech on the GM bankruptcy will take place at 11:55 a.m. EDT

[Better Believe It]

25. So auto workers pay and benefits may need to be cut more???!!!

Thanks.

[ClarkUSA]

26. Um, both investors and workers had to make concessions. Whaddya think would happen?

[Arugula Latte]

27. That's un-American! Everyone knows corporations trump the people!

[ClarkUSA]

28. Republicans were the first ones to push the bankruptcy option, now they're whining about it...

... because President Obama and the Treasury didn't screw over the unions and reward the investors as BushCo would have. BTW, RNC Chairman Steele has already released a news release attacking President Obama for favoring his "union cronies who bankrolled his campaign".

That should go over real well with rust-belt region voters dependent on GM business. I have a feeling that these kinds of attacks will backfire with 2010 looming ahead so I hope they continue. ;)

[ItNerd4life]

30. Many bondholders are working class people! Get educated

Some of the GM & Chysler bonds are held by teacher pension funds and the like. They are working class people and are going to get screwed.

Bondholders are supposed to get priority. They are called 'secured' investors.

If the government screws the bondholders, many bonds which are considered safe havens will no longer be safe. This could destroy
many people's retirement accounts.

On edit: Isn't special circumstances the same bullshit excuse Bush used to ignore peoples rights and do wire taps?

[ClarkUSA]

32. And many are not. Nevertheless, bondholders agreed to the terms. Also, see Reply #26 (link ->)

Link: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8443229&mesg_id=8444132

[mvd]

34. I've been pretty happy with Obama's plan so far

People are wary of full bailouts (and I remain opposed to the size and manner of the bank bailouts,) and hopefully, there will be additional worker protections after the bankruptcy.