Looks like the US government might be going into the automotive ownership industry:
Under the outlines announced yesterday, the federal government would take an equity stake of at least 50 percent, the United Auto Workers would take as much as 39 percent, the company's bondholders would get 10 percent and the existing shareholders 1 percent.
None of the debt-for-equity swaps have been formally reached, however, and it is still possible that the company will be reorganized in bankruptcy court.
In a statement today, the president's auto task force said it will consider GM's plan to give the United States an equity stake in exchange for surrendering some of its debt. "The administration has made no final decision regarding the treatment of its current loan to GM or with respect to any future investments in the company," the statement said.
The Wall Street Journal also has a recommended piece on this topic.
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