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Northwest Voices

Seattle Times letters to the editor

May 12, 2009 at 4:00 PM

Bankrupt automakers

Stockholders deserve more for investments

If George Will’s column in the May 8 Times [“Auto companies should be left to the rigors of bankruptcy,” Opinion] is correct, the government’s plans for saving the auto companies will create great injustices.

He says the government will end up owning 50 percent of GM. The United Auto Workers will own 39 percent of GM and 55 percent of Chrysler. Government ownership of Chrysler was not specified.

The injustice lies in the treatment of the current shareholders of the companies. The bailout funds from the government justly earn a sizable government share of the companies.

But the huge shares — 39 percent of GM and 55 percent of Chrysler — going to the union are outrageous. The union contributed considerably to the plight of the companies, yet it gains control of them while the innocent shareholders end up with only 11 percent of GM and probably less of Chrysler.

The article speaks of greedy “speculators” contributing to the company failures, and surely some investors deserve that comment. But many investors in the auto companies were innocent stockholders saving for their futures in the face of the approaching Social Security breakdown.

Certainly they deserve more for their investments than just 11 percent of GM or a comparable share of Chrysler.

— Spencer M. Higley, Edmonds

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