Many Wall Streeters believe the prospects for such a major swap of GM stock for debt are dubious since bondholders expect to fare better in bankruptcy. Some bondholders are said to have positioned themselves for a bankruptcy filing by buying credit default swaps, which would pay off if GM filed for Chapter 11.(Time Magazine)
G.M. seems to be counting on a lot of people (bondholders, taxpayers via government loans) being in Santa mode, hoping that the potential future value of near worthless equity will be enough of a carrot to avoid the bankruptcy applied spanking that it needs.
We get the impression that G.M. is still not taking the situation seriously. And what's with so much scheduled to happen in 2010? If you want me to take your equity, your stock, in place of my bonds or loans, I want stuff to happen yesterday. I want Pontiac dead in two months, or six months max.
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In related matters, who is wiser? Daimler selling the last 19.9% stake in Chrysler, or Fiat buying into (apparently without cash , if we recall correctly) the vision and world of Chrysler? We reflexively side with the Germans who have the better handle on things financial, but then again, how could the Italians mess up a deal with no cash outlay?
The question in our mind is do you want to hang your future on a workforce that even now is dragging its feet on saving their own life?
While the United Auto Workers union has accepted a deal in principle, its 26,800 members at Chrysler still have to formally vote on the proposal, the exact details of which have not been released.(BBC-UK )
Wethinks the time for principals, or "in principal" is long gone and autoworkers should be offering up nubile daughters to the masses for each car purchase (for those with rock solid credit only though).
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