Email List Sign Up

GM Bondholders Treated Unfairly as Union ‘Extorts,’ Corker Says

GM Bondholders Treated Unfairly as Union ‘Extorts,’ Corker Says


By John Hughes

May 5 (Bloomberg) — General Motors Corp., cutting costs to avoid bankruptcy, offered a better deal to a United Automobile Workers health fund than to bondholders, Senator Bob Corker said in an interview.

GM has offered bondholders 10 percent equity to give up $27 billion in unsecured claims. The union fund would get as much as $10 billion in cash and a stake of as much as 39 percent in return for waiving GM’s $20 billion in obligations to a retiree medical fund.

“It’s my understanding that the reason for that is their concerns that if they don’t give the UAW this, they will strike,” Corker, a Tennessee Republican, said today. “I just find that to be a surreal point of view.”

The UAW and GM management have contributed equally to the “sad state” the automaker is in today, Corker said after a briefing with the Treasury’s chief auto adviser, Steve Rattner. Now, “in essence, the UAW through threat of not coming to work, can extort 39 percent of the company.”

“It points to the bent of this administration,” Corker said. “My guess is there are plenty of folks in the country that would love to participate in those jobs at good wages not to extort the company for ownership.”

GM and its U.S. union are set to resume talks May 7 on a cost-cutting contract as the automaker pushes to meet a June 1 government-imposed bankruptcy deadline, people familiar with the process said.

Spokesmen at GM, Treasury and the UAW weren’t immediately available to comment.

To contact the reporter on this story: John Hughes in Washington at

Last Updated: May 5, 2009 12:12 EDT

Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier