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GM Retirees Get Discount On GM’s Stock

From a tear soaked New York Times:

G.M. Retirees Weigh Buying Its Stock Again

November 14, 2010

DETROIT — John Christie, who worked for 36 years building Chevrolet and Cadillac cars, once thought owning General Motors stock was a safe bet.

Mr. Christie of suburban Detroit now says he cannot afford to make the same mistake twice.

He is among the thousands of G.M. retirees who are wrestling this week with one of the toughest, and unexpectedly emotional, questions of their retirement: after seeing their G.M. stock wiped out in bankruptcy last year, do they dare put the reorganized company’s stock back in their nest eggs?

Boo freaking hoo. GM was put into bankruptcy thanks to people like Mr. Christie and their outsized salaries and benefits and retirement plans.

Maybe we should fee a little more sympathy for the poor slobs who had nothing to do with GM’s demise apart from buying their stock – and who took it in the shorts thanks to the United Auto Workers.

“I’m still on the fence,” said Mr. Christie, who retired in 2005 as a manufacturing engineer and is president of the nationwide G.M. Retirees Association. “I did lose money on the old G.M. stock, enough that I may not have to pay capital gains tax for about 73 years.”

It is a decision being talked about at retiree clubs, union halls, and G.M. plants and offices across the country as the nation’s biggest automaker prepares to become a public company again.

More than 500,000 retirees and surviving spouses, as well as about 90,000 active workers in the United States and Canada and 3,000 dealers, have been given a chance to buy shares in G.M.’s initial public stock offering.

G.M. has set aside 5 percent of the 365 million shares in the offering, which is expected as early as Wednesday, for current and former personnel. An average investor would not be able to buy in at the stock offering price

The only reason GM exists in its present form is to support these people’s lavish retirement packages. It is simply a payback to the UAW for being among the foot soldiers of the Democrat Party’s political machine.

These people’s retirement plans depend entirely upon the success of GM, and they are still balking at investing in the company? Even when they are getting a hefty discount? That’s quite reassuring.

It is hardly an easy call for many retirees who had banked on the benefits they earned while working at a company once called “Generous Motors,” only to see their medical plans, life insurance and retirement contributions slashed in recent years

Again we say, ‘boo hoo.’ Their insurance benefits and retirement plans are still far beyond anything most of us can even dream about.

It was the retirees association, which acts as a watchdog on G.M.’s pension investments and benefits policies, that suggested last summer to the company that it allow retirees and workers to participate in the stock sale.

In a letter to Edward E. Whitacre Jr., then G.M.’s chief executive, Mr. Christie, the association president, said the gesture could help “rebuild relationships” with retirees who had lost benefits.

“So many retirees have been hurt by the bankruptcy,” he said. “This was a chance for G.M. to show they weren’t totally throwing them under the bus.”

Mr. Christie has cautioned fellow retirees to set aside their emotions about G.M. — pro and con — in their deliberations about investing. “There are some people who say G.M. will take care of us again,” he said. “Well, those days of G.M. are gone.”

Once upon a time General Motors might have taken care of its workers. But, alas, the workers took care of GM first.

This article was posted by Steve on Monday, November 15th, 2010. Comments are currently closed.

5 Responses to “GM Retirees Get Discount On GM’s Stock”

  1. proreason says:

    Buying GM stock or playing Russian Roulette.

    What a dilemma.

  2. ucfengr says:

    Before you are too hard on Mr. Christie, note that he is a manufacturing engineer. As such, he was probably a white collar worker (i.e. non-union) and wouldn’t have had much to do UAW and it’s role in GMs re-organization. IIR, white collar GM retirees got screwed pretty hard in the re-org, as bad, or almost as bad as the secured bond holders.

    • canary says:

      Mr. Christie would have had much to do with GM’s “bailout” not re-organization. And Mr. Chrisite is President of the GMRA which is a political union as all the rest.

    • ucfengr says:

      If I remember correctly,white collar workers got hosed in the bailout, just like everybody but the UAW. As an engineer, Christie was likely a white collar worker so he probably got screwed in the bailout too, so it’s hard to imagine him being in favor of it.

  3. Georgfelis says:

    Fool me once, shame on you. Fool me twice, I must be a Democrat….

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