Arlen Specter (D-PA) is the correspondent’s senior United States Senator from Pennsylvania.
Dear Senator Specter:
I will make this as short as possible.
As of Monday, May 24, just 6 days ago, the federal government was supposed to get 50% of General Motors new stock, the UAW 39%, the bondholders 10% and the original stockholders the remaining 1%. (I bought GM stock based on that.)
This was sure never to fly as the bondholders would expect the courts to give them more so it was a “deal” designed to ensure bankruptcy.
On Friday, the deal suddenly changed. Now the UAW gets 17.5%, the Feds get 72.5%, and the bondholders still get only 10%, albeit with warrants to buy 15% more stock. Common stock becomes pure trash.
Why did the UAW ownership drop? Did the UAW agree because they thought that the additional money would go to the bondholders, potentially averting a bankruptcy that destroys the value of their own common stock?
I ask you, Senator Specter: DO YOU KNOW?
If you do not know. do you know anyone who does know? There hasn’t been a word breathed in the press, so I assume the media must not know (or doesn’t care since a bankruptcy would sell more copy. Even the Wall Street Journal thinks the government “sweetened the offer” to the bondholders (at the same time the government upped its own holding by almost a third, a little fact that keeps slipping through the cracks.)
If you do not know, why is this bankruptcy allowed to proceed without a timeout for hearings, so the executive branch can explain under oath what the hell they are doing to the American people?
A bankruptcy will insure that the GM stock in millions of 401Ks (actually already “201Ks” or even “101Ks” ) around the country can NEVER recover their value. Without a bankruptcy, they could eventually recover.
This government takeover leaves millions of people’s retirement prospects destroyed, including many who are already retired and unable to start over. That includes the UAW members who accepted a smaller share of the new company plus non-union GM employees, dealer employees, in addition to mutual funds that are held by people all over the country. A large number of Pennsylvania retirees and stockholders are your own constituents and voters.
I ask you, Senator Specter: What is the benefit to destroying the common stock? Why destroy business ownership if the deals in place let the GM stock in those 401Ks recover?
Is it the business of this government and the political party you joined to insure that people can never retire?
I ask you, Senator Specter: What will the impact of the bankruptcy be on the healthcare programs for GM employees and retirees? We are not just talking UAW line workers, but all GM employees, union, non-union, and professional. Is it the business of this government and the political party you joined to make sure people have poor healthcare?
Or is it the intention of this government and the political party you joined to build demand for nationalized healthcare!
I ask you, Senator Specter: Wouldn’t such an approach be fraudulent?
Ralph Nader, whom I historically have despised for the fraud he perpetrated with Unsafe at Any Speed, published an editorial in Wall Street Journal on Friday. I laud him for raising the issues and for pointing out that IT IS NOT TOO LATE TO AVOID THE BANKRUPTCY OF GENERAL MOTORS.
It will take more than that lone voice in the wilderness.
We need a major voice in the Senate to call for a time out and for hearings to that the American Public can understand what is being done in their name. YOU MUST DO THIS TODAY.
Bob Post, registered voter
Arlen Specter (previously D-, then R-, and now D-PA) is the correspondent’s senior United States Senator from Pennsylvania. Senator Specter had been a member of the Democratic Party before switching to the Republicans to win a campaign for district attorney. Elected to the Senate in 1980, Specter rejoined the Democratic Party this year when he discovered he would lose his upcoming Republican primary.