[FWIW, I thought the lead article in today's FT's business section provided at leat an interesting footnote to the discussion]
October 1 2007 Financial Times
UAW could hold top GM Stake
Convertible bond gives interest in turnround [sic] Pattern set for Ford and Chrysler talks
By Bernard Simon in Toronto
The United Auto Workers union could become General Motors' biggest shareholder under a deal to transfer the carmaker's healthcare obligations to a huge union-managed trust.
The two sides agreed last week to set up the Voluntary Employees' Beneficiary Association as part of a four-year labour contract. GM's $20.9 bn contribution to the Veba will include a $4.4bn note convertible into GM shares.
If the bond were converted at GM's current share price and at par, UAW would stand to hold a 17 per cent equity stake based on the company's present market value of $21bn, plus that of the bond.
The convertible bond will give the union a direct interest in GM's turnround and the potential to influence the carmaker's future direction. GM and the UAW declined further comment.
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Michael