GM Bondholders Make Obama an Offer He Shouldn't Refuse

Barack Obama says he doesn't want to be in the car business, so the GM bondholders are giving him an offer he shouldn't refuse:

The bondholder committee, which represents about 20% of the debt outstanding, said its offer would save taxpayers $10 billion in cash. Under it, GM would issue new stock and give 41% of it to the UAW, 51% to the bondholders and 1% to common equity holders.

The counteroffer seeks to put bondholders on the same plane as the union, which is owed $7 billion less.

The government would not get equity under this scenario because it wouldn’t need to reduce any of GM’s loans. Unsecured bondholders would likely reduce their entire claim on the auto maker under this plan.

The counterproposal could meet stiff resistance from the Obama administration’s automotive task force, as administration officials have said the GM deal as proposed is more than fair, and have told bondholders they would likely see less under bankruptcy.

And what are the odds Obama will take it? Zero. Nada. Zilch.

The deal Obama is promoting would give 40% to the unions, 50% to the government, and only 10% to the bondholders. The unions will never allow that to change.

Instead the taxpayers will be stuck with the various liabilities related to GM including massive union pensions. That's the only way the unions will have it.