[lbo-talk] UAW/GM agreement

[Michael Pollak]

[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.

<end excerpt>

Michael