With the GM bankruptcy, we'll be investing

$30 billion dollars more into and owning 60% of a company that's worth "negative $90 billion." - said by Jon Stewart on The Daily Show a few minutes ago.

Im not sure how it works so fill me in. Is it really negative $90 billion now that they have bankruptcy protection?

when Jon Stewart said it! I just wanted to share that amusing nougat with my DU family.

That is why the US treasury owns 60 percent of the new GM followed by the UAW and bondholders each at 20 percent.

But they still have to come out of bankruptcy, sell cars and be profitable. With all the negative press and coming out of bankruptcy, plus competition with foreign automakers, I really do not see a viable GM in the future.

This is a bad investment of taxpayer money by the government. I understand that they were trying to save jobs, but for how long?

... if GM liquidated.

And Stewart's statement isn't quite true. The government does NOT own GM yet. The idea is that once the company is split in two, the smaller, "good" GM will be 60% government-owned.

I'd give GM 50/50 odds long-term. It *could* be like British Leyland, and fade over time. Actually, I doubt it'll be that gradual. If the company reenters bankruptcy at some point, like, say, in 2017, I doubt there will be any political will to save it.

On the other hand, temporary government nationalizations have worked in the past (i.e. Conrail). And GM's proposed new cost structure should allow it to break even with far fewer auto sales.

The issue the government is going to have to figure out is when to sell its stakes in GM. Ideally it'll do it sooner, to erase the "stigma" of government ownership and avoid conflicts of interest. But if it sells too soon, then everything the government turns into losses. Holding onto it too long, however threatens to depress sales long-term if people won't buy from a nationalized auto company (remains to be seen) or if it's otherwise unable to compete.

All things considered, I think it's probably for the best. A liquidation would have a far more devastating effect than the current restructuring, and it would probably cost the government even more.

I've never been a partner in a car company before. I plan on using that line with the dealer too.