Bailout or Buyout...

The CEO's of the big 3 automakers recently flew to Washington in private jets at a cost of $20,000 each, with tin cups in their hands requesting a federal bailout of their industry.

The recent bailout of the Banking Industry clearly demonstrated the lack of planning and oversight by Congress and the lack of a conscience by the Banking Industry. The bailout was supposed to be used to strengthen the economy by helping those unable to pay their morgages. Instead, taxpayers dollars were used by the banks to clean up their portfolios and to take over smaller banks.

Maybe we shoul learn from the recent actions of the Financial Industry and apply those same tactics to the

Problem: Big 3 all claim bankruptcy is imminent without a $25 billion dollar bailout.

Proposed solution: Not a loan or bailout but a legitimate (albeit not quite traditional) stock sale.

1)  Chrysler is not a public corporation so it would be ineligible for the plan.

2)  That leaves $12,500,000,000.00 available each for Ford and GM.

3) The government purchases (with taxpayer money) $12.5 billion in stock of both GM and Ford.

4) That equates to 4,681,647,940 shares of GM and 8,928,571,429 shares of Ford at today’s prices (11/19/08)

5) GM & Ford Stockholders must approve the stock sale and accept the dilution of their holdings (If they really are going bankrupt, diluted stock is better than stock in a bankrupt business).

6) If stock sale is approved each of the 300,000,000 men and women and children (US Citizens only) will be issued a portfolio of 15 shares of GM and 30 shares of Ford stock. (Could be modified to just include those who actually PAID taxes last year, which would double the resulting portfolio)

6a) The American public becomes the largest stockholder in both companies.

6b) All shares represented by this sale will be represented by a single board member with a seat on each of the two boards and who will have a number of director votes proportionate to the number of votes currently exercised by the (now) second largest shareholder. Proportion to be based on number of shares represented by the director.

6b) All shares will be voted as a single proxy voice by the director.

6c) The director would be appointed by congress for the first term and thereafter be elected by the American taxpayers every two years in a general public election devoid of any party affiliations (all candidates appear on all ballots).

The end result is:

 If taxpayers money is used, taxpayers now enjoy majority ownership in the company and the board must honor the opinion of the people or face dismissal.

Every American child living today starts life with a portfolio of potentially valuable stock.

Every American now has a genuine financial motive to buy American vehicles going forward. (We all get the employee discount too!)

7) If the stockholders do not approve the sale and accept dilution then the funds are not made available in any form because the companies either they didn’t need the money as urgently as they claimed or they would simply rather go bankrupt than do business based on what the American people want.

 Wait a minute, that’s how they got in this predicament to start with isn’t it!

Finally, if we really want to teach them a lesson, when we select the interim director we simply choose Ralph Nader!

- Editor