Get ready get 'royally screwed' by the Gubmint in the upcoming Gubmint Motors IPO that is coming up just in time for the election cycle so the Democrats can proclaim a success. Oh but wait, its not really a success. Despite claims of short term success there is a whole lot of UNFUNDED DEBT looming on the GM horizon in the form of pension obligations that were not renegotiated (thanks to the fact that a heavy handed gubmit loves unions and unions now own 16% of the company stock).
Yes folks, there is a sucker born every minute. Let's see how many buy into the GM debacle.
Yes folks, there is a sucker born every minute. Let's see how many buy into the GM debacle.
Read the remainder at FORBES => http://www.forbes.com/2010/08/30/ge...hikha-dalmia.html?boxes=opinionschannellatestObama's 'Mission Accomplished' Moment At GM
Shikha Dalmia, 08.30.10, 12:21 PM EDT
The company's politically motivated IPO could jeopardize taxpayer ''investment.''
The General Motors IPO, the second largest ever, is arguably this decade's most hyped financial event. But it might also turn out to be this decade's biggest financial fiasco. Its timing is driven not by the financial needs of the company-- or the interests of taxpayers who are poised to get royally screwed--but the election-year needs of the Obama administration.
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For starters, although it managed to negotiate lower wages and benefits from its unionized workers during bankruptcy last year, it did not get meaningful relief from its pension and health care obligations. That's because its bankruptcy was orchestrated by a union-friendly administration that changed the normal rules of the game that would have required GM's unsecured debtors--such as the United Auto Workers--to forgo most of their claims. That didn't happen in this case, so the company has unfunded pension obligations to the tune of $27 billion whose bill is due in 2014. Long term, this puts it at a major competitive disadvantage
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Investors might overlook this if the company were otherwise sound and on a growth trajectory. That, however, is not the case. Indeed, in its application to the Securities and Exchange Commission--which, guess what, will come through just in time to make an IPO possible before the November elections!--GM admits that its "disclosure controls and procedures and internal control over financial reporting are currently not effective." And this "could materially affect our financial condition and ability to carry out our business plan."
. . .
GM's European Opel unit, which failed to obtain a viable bidder or a bailout from the German government, remains a cash-guzzler, having lost over a billion dollars since the company emerged from bankruptcy last year. Most crucially, however, J.D. Powers last week lowered its auto sales forecast for the rest of the year as well as 2011 . . .