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GM bondholders stage Tampa protest, seeking their piece of the pie

TAMPA — In one corner are the United Auto Workers, with more than 1 million active and retired members, and a U.S. Treasury with its fingers in trillions of dollars.

Behold the competition: a ragtag bunch of average Joe bondholders with hand-scrawled signs in a rented room across from the University of South Florida.

At a press conference Tuesday, they held aloft posters reading, "We are individuals, not institutions" and "GM bondholders left out in the cold in the Sunshine State." But they might as well have said, "No debt cancellation without representation."

What's making this group of "Main Street" General Motors bondholders irate is the Obama administration's refusal to give them a seat at the negotiating table to discuss the future of GM.

Not only is the administration offering pennies on the dollar for their billions in investments, but bondholders also complained that the president is scapegoating them as speculators undeserving of sympathy.

Though the press outing was sponsored by the 60 Plus Association, considered a right-of-center version of the AARP, the group wasn't in lockstep opposition to the administration.

Take Jim Graves. The 58-year-old Orlando software developer voted for Obama, hopeful that the senator from Illinois was a moderate to bridge the political divide. He even devoured Obama's biography.

"I thought he'd stand up to his own party and the Republicans and take his own path," Graves said from the Dr. Blaise Alfano Conference Center on Fowler Avenue and McKinley Drive. "I'm losing my faith and trust in him."

The administration plans to give bondholders 10 percent of GM stock in exchange for erasing $27 billion in bond debt to the automaker. But the autoworkers' union gets a 39 percent stake in GM in exchange for $10 billion. The Treasury is helping itself to half of the company to write off debts smaller than the bondholders'.

Graves, whose 80-year-old mother near Ocala relies on GM bond income, was joined by Gary Thomas, a retired Knoxville, Tenn., auto mechanic who said he'll live off $10,000 a year if he accepts Obama's offer. Also on the dais was bondholder Ronald Sears, a retired autoworker from Dallas with leukemia.

Sears wondered how GM could simply cancel bonds without suffering consequences of other defaulters. "Suppose you miss a couple car payments?" Sears said. "Suppose you don't pay your IRS taxes?"

60 Plus president Jim Martin, a Florida native dressed in a Marine Corps baseball cap, said his group doesn't speak for institutional bondholders on Wall Street. Rather, he's concerned about the 20 percent of bonds held by regular folks.

But as GM heads toward a June 1 deadline set by the government, Martin senses his group will get the scrapings of the porridge pot while a sumptuous buffet awaits the administration's politically connected friends.

"What a sad state of affairs we've arrived at," Martin said.

GM bondholders stage Tampa protest, seeking their piece of the pie 05/12/09 [Last modified: Tuesday, May 12, 2009 8:44pm]
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