Mike Spector of The Wall Street Journal has a great cover story in today's edition detailing the winners and losers from the government-led reorganization of General Motors and the broader auto industry last year - identifying some of the biggest fat cats as winners and the saddest victims as losers.
In rescuing the car makers, the U.S. government prevented a potential meltdown of the auto industry and further shocks to the economy. But in the process, it created a wide universe of relative winners and losers. The U.S. Treasury received large ownerships stakes in the restructured auto makers, as did union retiree trusts. Chrysler's banks got some, not all, of their loans repaid in cash, and GM's lenders were fully repaid. On the other side, thousands of dealers, asbestos victims and other creditors received little to no recompense.
Among the creditors who suffered most, car-accident victims represent a distinct mold. Unlike banks and bondholders, this group didn't choose to extend credit to the auto makers. As consumers, they became creditors only after suffering injuries in vehicles they purchased.
So the bailout was very good to the fat cat bankers and left accident victims without their payments? We needed Federal oversight to make sure the bankers were saved and the little guys got screwed?
The reason I'm highlighting this story is again because all of this information has been in filings since the reorganization - the story, explosive and counter-intuitive - was out there for any reporter covering the company to notice and follow-up on.
Spector, who isn't even a full-time auto reporter - was the one who noticed and deserves recognition for surfacing this story.
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