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UAW on Offensive over its part in GM Restructuring

Reuther tells Congress news coverage and editorials are wrong.

by on May.29, 2009

Photo Leticia Quesada, courtesy of UAW Local 2244

The union, with uncharacteristic aggressiveness, took on the media.

The United Auto Workers Union yesterday told United States Representatives and Senators that recent news stories, editorials and op-eds about the restructuring plan at General Motors have a number of “inaccurate assertions” about the shares of equity in a New GM that will be distributed after it emerges from bankruptcy. has reported that the U.S. Treasury Department had revised an offer to angry, holdout bondholders, who claim that they are not being fairly treated in General Motors Corporation’s revised viability plan that gave them 10% of the new company to settle more than $27 billion in debt. Bondholders say the UAW is getting a better deal.

Treasury now challenges bondholders to accept the 10% stake in a reorganized GM as originally proposed by GM, and eventually another 15% of the new company will be offered by way of stock warrants.

The U.S. government will receive an initial allocation of 72.5% of the equity in the new company.

The UAW in its latest lobbying and p.r. push wanted to be sure that everyone understood that the bondholders not only will receive an initial allocation of 10% of the equity, but thee are now warrants that can result in their receiving “substantially more.”    (more…)