Auto Industry Update, GM Bankruptcy Imminent Edition

Well, it looks like GM could not get enough of the bond holders to agree to the deal. The deadline passed without the requisite 90% buy-in.

My guess is that a lot of the speculators who purchased this debt at around 10¢ on the dollar had already purchased Credit Default Swaps (CDS) on the face value, so they had no incentive to settle.

This is yet another example of how the complex derivatives and swaps system is broken.

The UAW has been far more accommodating, with the CAW cutting a deal in the great white north, and the UAW cutting a deal down here, which I guess is the great uninsured south.

Meanwhile, the Obama administration apparently already has the bankruptcy "i"s dotted and "t"s crossed, so we may see a filing sooner, rather than later.

It looks like the new GM will be 70% government owned, though there are many sources saying that they will take no role in how the company is run.

This is bullsh#@....Not the government ownership, but the constant assertion that when the taxpayer buys a company, that they should have no voice whatsoever in how that company is run.

Government ownership should have 2 goals:

• An unwinding of this ownership sooner, rather than later with terms favorable to the taxpayer.
• An active involvement in the operation of the concern, to ensure that it is run for the long term benefit of the taxpayer.

The idea that the government should have no say in things like, location of manufacture, executive compensation, etc. when the taxpayer owns the firm is simply stupid ideological crap.

Meanwhile, there are a number of bids for GM's Opel division, and Fiat is by no means the front-runner there.