Those of you old enough to recall the 70s might remember the creation of ConRail Corporation (Consolidated Rail Corporation), a government-owned corporation which merged 6 limping, dead or dying railroads* in the Northeast into one company.  It took about 5 years to (a) rationalize the often-redundant freight lines (often, one of the ancestor lines had tracks on one bank of a river and another had them on the other) into a sensible network, (b) get rid of worn out rolling stock and get new, (c) fix the often-decrepit tracks, (d) hive off passenger service to Amtrak or local governments, (e) work out issues with creditors and (f) rationalize employments.  After those were done, Conrail started turning a profit.  In 1987, the government sold it in an IPO, at a profit.

I think that's where we will be going with GM and, I hope, Chrysler.
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GM goes away entirely, 10 new companies are born and over 5-10 years those jobs are back at those new companies and other auto companies will have hired some.

If this is how we are going to count "saved" jobs, in the 3.5 million saved or created stimulus, we are in for a very long haul to recovery.

I assume the 21k jobs that are scheduled to be shed will be counted as "saved" under the stimulus program.  

The U.S. Treasury Department would own a majority stake in General Motors Corp., have the right to appoint all of its directors and have veto power over all shareholder actions under the company's new restructuring plan unveiled today

Link

And as to how much of the company was owned by employees, well, here's your answer:

The manager of General Motors Corp.'s employee stock fund sold all shares of GM stock on fears the company could be forced to file for bankruptcy in the coming weeks, the automaker said Friday.

As of Dec. 31, nearly 30,000 GM employees and other plan participants held about 75 million GM shares --12.5 percent of the Detroit automaker -- in their 401(k) plans. GM spokeswoman Julie Gibson said the total number of shares had not significantly changed since then.

GM suspended new stock purchases by employees last year because the company had run out of shares to sell.

Employee shares were sold over the last 25 days at an average selling price of $1.87, Gibson said

The money pit Chevy Volt is a prime example.  It is already rated at 100 mpg for CAFE purposes.  A number that round comes from negotiations not measurements.

Universal health care can also help GM and maybe GM can reduce legacy costs by moving people to a public plan.  

If the car companies crash, will your pension crash with them?

That question is being raised on assembly lines around America, in the towns where many auto workers went to retire, and in the halls of Washington. The issue goes far beyond the car companies.

The answer, from economists and others who keep an eye on retirement plans, is that most workers' pensions will be safe -- but... And it's a pretty big "but."

First, warn some economists, there may be a domino effect if Chrysler or General Motors declare bankruptcy. As they reorganize into smaller, leaner companies, they are likely to cut back on the benefits they offer to future employees -- and companies in other industries, under pressure themselves, may do the same.

Second, the struggling economy has been hard on many pension plans. Hammered by the downturn, some of them simply do not have the money at the moment to pay all their projected obligations.

"You have this triple storm," said David Certner, legislative policy director for AARP, the advocacy group that represents people over age 50. "The market is down, interest rates on fixed-income investments are low, and there are tough rules to limit what a pension plan can do to raise more money."  

GM today announced 21,000 US factory jobs cut by next year, and the closing down of about half of its dealerships (and all the jobs there)

Also doesn't Uncle Sam already have a controlling interest in Citi?  I thought that it had converted its preferred shares to common as part of the last TARP infusion?

So does this deal say anything about whomever controls GM doing the right stuff:  ie: building a green transportation infrastructure to include rail, electric cars and buses with highly paid skilled American workers who have rights and health care?

The Feds have loaned GM $15 Billion and get 50%.

The UAW holds $10 billion in bonds and gets 39%.