[dunk010]

I'm torn on this - on the one hand it's those employees' healthcare which is at stake - real people and real lives. On the other hand there is due process, and the risk of making it very difficult for the government to encourage private investment in the future. If only this had been seen up front - surely employees' healthcare should have had better protection from the start, but these things are only obvious in retrospect. Perhaps the government needs to legislate to force companies to make their employees benefits higher priority in the case of a bankruptcy.

[gaius]

Mutual funds are huge shareholders too. Are those not real people and real lives?

UAW members have done very, very well over the years, it's about time they shared some of the pain. What goes around, comes around.

[Xichekolas]

> Are those not real people and real lives?

As someone else has pointed out, the average retail investor that might own some GM bonds through a mutual fund would maybe lose a few percent of their portfolio. The average GM retiree losing his pension/healthcare is looking at a near total loss of income.

That said, I definitely see the legal problem here. The two solutions that come to mind for solving it are:

1. Let the retiree VEBA go without the last $10 billion owed it, accepting whatever that means for retirees.

2. Have the government pay the $10 billion in cash rather than GM stock.

(Just as a disclosure, my dad is a GM retiree. He gets a $35k/yr pension and health insurance. His insurance used to be quite awesome, but in the last five years has become merely 'good'. Best financial decision he made was to divest his GM stock in November 2003, which at the time was 80% of his portfolio.)

[DanielBMarkham]

I believe you're saying that the company should exist primarily for the benefit of the employees' health coverage, and secondarily as an entity that takes money and makes something of value.

I might be mistaken though. If you are, is that out of a sense of fairness or sympathy to those who have lost benefits? Are they somehow more deserving of our action than the person who put their life's savings into bonds in a company? ie, is this just an appeal based on current emotion -- how bad it makes you feel about those employees?