In GM Bankruptcy Plan, Government Will Select New Board Of Directors

Let’s say the U.S. has poured billions of dollars into a failing company. How strongly should it try to protect that money once the company files for bankruptcy? The Washington Post is reporting that the plan for GM—which may go belly up as early as Monday—is for federal officials to select 5 or 6 of the company’s new board members, and have a say over which 6 of the existing board will remain. The UAW gets to choose another, and Canada might possibly be given one slot to fill. The rest of us will probably just get t-shirts or a souvenir mug.

While President Obama has said he has no interest in running GM or Chrysler, into which the government has poured more than $20 billion combined, he has said officials have an interest in protecting the taxpayers’ investment. Nevertheless, federal officials are preparing to be deeply involved in the companies well after they emerge from their respective bankruptcies.

“I don’t think that we should micromanage,” Obama has said. “But I think that like any investor, the American taxpayer has a right to scrutinize what’s being proposed and make sure that their money is not just being thrown down the drain.”

“U.S. Involvement in GM Won’t End With Bankruptcy” [Washington Post]
(Photo: jm3)