Government takes General Motors. What a mess.

This cannot be good. The GM bailout deal breaks down and the feds end up with majority ownership of a bankrupt firm?

Somebody has to be running a scam.

DETROIT (AP) — A General Motors Corp. bankruptcy filing seemed inevitable after a rebellion by its bondholders forced it to withdraw on Wednesday a plan to swap bond debt for company stock.

GM has until Monday to complete a government-ordered restructuring that includes debt reduction, labor cost cuts and plant closures. But a Chapter 11 reorganization is likely after the company said its offer to exchange $27 billion in unsecured debt for 10 percent of the company’s stock had failed. GM has received $19.4 billion in federal loans….

The government’s stake in the company originally was to be 50 percent, according to GM’s regulatory filings. But it now could be as high as 69 percent.
GM says debt-for-equity offer to bondholders falls short; bankruptcy filing almost certain
AP Auto Writers
9:42 AM EDT, May 27, 2009

And I have no expectation that the president will be able to run an automobile manufacturer.

What a mess. At this point, it is so badly mucked up that it is not even partisan, though definitely political. In other words, not even the ACORN and the ACLU can benefit from this mess.

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