The Sordid Truth about GM

The following is an interesting bit from a right wing blog called redstate. I don't generally spend any time on right wing blogs, but this blog entry has a lot of interesting facts/opinions about GM. I've put in bold the key bit:

GM needs a total restructuring of its operations. By rights, every stakeholder in the room should take a lot of pain, and then the company should figure out how to move forward in a world in which the competition is a lot hungrier, the markets are a lot smaller, and access to capital is far more constrained. But that’s a great challenge for American business people, who are still by far the best in the world.

But that’s not going to happen, because some stakeholders are more equal than others.

The common shareholders of GM are going to get wiped out. That’s good, they should. The bondholders are going to get converted to equity at 30 cents on the dollar. That’s good, they should.

Many of GM’s dealers will receive lavish buyouts as an inducement to close their doors, for a total cost in the billions of dollars. That’s disgusting, but it’s required both by GM’s contracts with them and by the welter of state laws that protect the dealers. (If you want to know who the political power brokers are in any given city or town, look for the car dealers.)

This is going to be kept scrupulously out of the news, because car dealers contribute huge sums to every last man and woman in Congress and the Senate. The public was ready to torch the private residences of AIG executives, but they won’t make a peep about paying billions of their own hard-earned dollars to provide a cushy retirement for thousands of already-rich auto dealers.