GM would have gotten off the hook in their labor contracts to pay for retirees' health and pensions but, then, by law, the US Federal Government, that is, taxpayers, would have to make up the difference.
The PBGC is capped at $54k/year and no benefits. The government would not have had to pay for retirees health benefits (often described as "gold-plated"), and only would have had to pay for part of their pensions.
Also, in the event of bankruptcy, secured bondholders would have been paid before unsecured union benefits. The bailout was circumventing the rules of bankruptcy in order to minimize damage to the UAW. I wonder why?
The PBGC is capped at $54k/year and no benefits. The government would not have had to pay for retirees health benefits (often described as "gold-plated"), and only would have had to pay for part of their pensions.
http://www.pbgc.gov/wr/benefits/guaranteed-benefits.html
Also, in the event of bankruptcy, secured bondholders would have been paid before unsecured union benefits. The bailout was circumventing the rules of bankruptcy in order to minimize damage to the UAW. I wonder why?
http://www.opensecrets.org/orgs/summary.php?id=D000000070