Last week, nudged by the federal government, Chrysler filed for bankruptcy protection. Bloomberg is reporting that the White House has forgotten about General Motors.
"There's no question Chrysler" acts as a dry run for GM, said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. "It was designed that way because Chrysler is a much more manageable entity. The impact on the economy, on employment, is a microcosm of what is likely to happen with GM."
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The bondholders shouldn't be surprised that the unions are getting preference over investors in an Obama administration, (Sean) Egan said.
"If the government is providing money to these entities, they're going to be looking out for labor's interest first and foremost," he said.
"You may claim it's unfair, but that's the political reality and the time and cost of suing the federal government is prohibitive in most cases."
Unions have been one of the most reliable sources of funds for Democratic candidates for decades, even while the number of unionized workers continues to decline.
Just twelve percent of the nation's workforce is represented by a union--who is watching out for the other 88 percent?
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