Six GM executives sell more than 200,000 shares
By TOM KRISHER – 6 hours ago

DETROIT (AP) — Six General Motors Corp. executives recently sold more than 200,000 shares of the automaker as GM moves toward issuing new equity to give large stakes to the U.S. government and a United Auto Workers retiree health care trust fund.

Four group vice presidents and two vice chairmen sold nearly 205,000 shares Friday and Monday at prices ranging from $1.45 to $1.61 per share. GM shares closed Monday down 17 cents at $1.44.

Spokeswoman Julie Gibson says the sales don't show a lack of faith in the company. She says GM has disclosed publicly that shareholders run the risk of significant dilution or possibly losing their investments in a potential bankruptcy filing.

"They're not operating with any knowledge that other people don't have," she said. The executives had a short window of Friday through Tuesday to sell the shares, she added.

GM has offered bondholders 10 percent of the company's equity in exchange for wiping out $27 billion in debt. The company also is negotiating with the U.S. government for a potential 50 percent share of GM stock, and with the UAW to take 39 percent in exchange for half of the $20 billion that the company owes the trust fund.

The remaining 1 percent would go to those who hold the company's current 611 million outstanding shares.

If the bond exchange goes through, GM plans to issue 62 billion new shares and then do a 100-for-1 reverse stock split.

Executives selling stock include retiring Vice Chairman Bob Lutz, who disposed of 81,360 shares at $1.61 each for a total of $130,990. Vice Chairman Thomas Stephens and Group Vice Presidents Carl-Peter Forster, Ralph Szygenda, Gary Cowger and Troy Clarke sold smaller amounts.

GM has received $15.4 billion in government loans and faces a June 1 deadline to finish restructuring or head into Chapter 11 bankruptcy protection. The company has said it would prefer to restructure out of court, but Chief Executive Fritz Henderson said Monday that bankruptcy is more probable with so much to accomplish and the deadline little more than two weeks away.

 

Under a capital structure proposed by GM but still under negotiation, the U.S. government would get 50 percent of the company for its loans. GM has said it will need another $2.6 billion in May and $9 billion more for the remainder of the year.

A UAW-run trust that will take over retiree health care costs starting next year would get 39 percent of the stock, in exchange for half of the $20 billion that the company owes the trust. Existing shareholders would get roughly 1 percent of the stock.

To accommodate the new stakeholders, GM plans to issue 62 billion new shares, then simultaneously do a 100-for-1 reverse split to bring the number of shares down to roughly the present number of 611 million.

 

the unions have wanted to take the company for all its worth... now they get their wish. unfortunatley, they didnt think ahead, because it will cost them their jobs when the US manufacturing sector shrinks by a considerable level as GM and Chrysler get the shaft.

 

GM trading at $1.10

thats what they deserve!

If GM was a dog, we would all be crying out that this is animal cruelty, just uthinise the poop pup and call it a day. While you are at it, uthinise the UAW so that this never happens again.

In microcosm, what is happening to GM is exactly what happend to the Soviet Union. Unionisation is basicaly Socialism, and when you have a large entity run under that kind of system, sooner or later it will eat itself. The Soviet Union could no longer sustane running and such a defecite caused by government set prices on things that really cost more to produce, government subsidised social everything and so on. And GM can no survive paying employees three times what they are worth to build a product selling at 80% what its worth. It was only a matter of time, the fact that it is being artificialy delayed is only making things worse for the long run. Let is die, let is restructure, let it be reborn in the image of Capitalism w/o the unions.

They wont, it will be reborn as a union owned company, it will flouder with increasingle poor quality products who's prices increase as quality goes the other way, the pay rate will continue to increase for workers who do not deserve it, and eventualy it will die all together. But THAT will take another 20 years + so for those of us who will have children, it will be their problem...

 

Spokeswoman Julie Gibson says the sales don't show a lack of faith in the company. She says GM has disclosed publicly that shareholders run the risk of significant dilution or possibly losing their investments in a potential bankruptcy filing.

"They're not operating with any knowledge that other people don't have," she said. The executives had a short window of Friday through Tuesday to sell the shares, she added.



Yeah- right. And I have this bridge in Brooklyn..

 

REALLY

 

dont you think it would make sense for gm to file chapter 11 bankruptcy instead of just getting raped? all they would have to do is reopen in a non unionised labor state like honda and and toyota are doing. between all the benefits it works out to around 80 bucks an hour for an average gm assembly line worker. i'm all for fair treatment and everything, but how can you possibly make money when you you have litterally thousands of workers being paid that much? sounds like thats where their "profits" are going.

 

I was hoping Gm would be able to rid itself of the UAW with all this crap... Guess not if they are going to hand over a good amount of the company. In my opinion now, GM is done for with no hope fo making a comeback. Sad to see I think.