GM Bailout Douses Taxpayer

GM's stock offering had the purpose of paying back $50 billion bailout it received from taxpayer money. The UAW however made out much better than the taxpayers or other investors.

Taxpayers taking a bath
You come after special interests

UAW got a generous share of GM stock in the company's bankruptcy settlement, so the United Auto Workers are well on their way to recouping the billions of dollars GM owed it - putting it far ahead of taxpayers who have recouped only about 30 percent of their investment and way ahead of investors in the old GM who have received nothing.

The boon for the union fits the pattern established when the White House pushed GM into bankruptcy and steered it through the courts in a way that consistently put the interests of the union ahead of many suppliers, dealers and investors - stakeholders that ordinarily would have fared as well or better under the bankruptcy laws.

The White House's auto task force engineered the bankruptcy and showed once again how the White House  handsomely rewarded its political allies.

The union's health care and pension trust fund earned $3.4 billion through the sale of one-third of its shares in GM last week. Analysts estimate that the UAW would break even if it sells the remaining two-thirds of its shares at an average price of $36. GM shares closed at $33.45 on Wednesday.

For taxpayers to break even the stock would have to rise to at least $52 and by some estimates as high as $103 - levels that would take years to achieve.

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