American Morning
Bondholder furious over GM bankruptcy
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/01/intv.debra.june.art.jpg caption="GM bondholder Debra June speaks to CNN's John Roberts."]
General Motors turns to bankruptcy today in the hopes of finding a new start. The move comes after a majority of those holding $27 billion in GM bonds agreed to swap that debt for a stake in the new General Motors.
Debra June is a small bondholder who six years ago invested $70,000 in GM bonds. She predicts that investment is now worth less than $200. She spoke to John Roberts on CNN’s “American Morning” Monday.
John Roberts: You invested $70,000 in GM bonds some six years ago. As a result of this deal, that is going to be converted to equity shares. What's that investment worth now?
Debra June: Well, what happened, John, I got this booklet at the original thing. This is a 200-page booklet and they sent this in the mail and the offering was two shares of stock for every $1,000. That's 140 shares of stock. They said originally in the booklet it was going to be 225 shares, but as you kept reading the booklet it said they were going to convert that to 101 reverse-split, which would be two shares of stock. $70,000 for 140 shares of stock.
There was no way I was going to take the deal. Then they came out and they sweetened the deal. And I tried to contact General Motors. I left a message with the people I called up. I talked to the people on the phone. I e-mailed two e-mails, “Please let me know what the deal is.” I'm with GM Bondholders Unite, the 60-plus group and also the Main Street Bondholders. What they're doing to the people is ridiculous. It's horrible. You're wiping out common people that saved money. I'm not a corporation.
Roberts: No, you're a school teacher, we should point out. So $70,000 is a huge amount of money to you.
June: It is. It is. And it's a shame. I mean what they're doing, they're saying 10% and this and that. I don't know what they're doing. People out there have saved their money. We've done the right thing. I pay my bills and here all of a sudden, they want to give me two shares. 140 shares of stock.
Roberts: And that stock, all in total is worth about what, $200?
June: I believe so right now.
Roberts: Maybe less than that.
June: Even less. When they regroup, even if the stock was $10. That's unbelievable. I mean I can't imagine someone doing something like that.
Airline workers feared for passengers' lives
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/05/28/chernoff.pilot.school.art.jpg caption="CNN's Allan Chernoff continues his investigation into pilot training."]
By Allan Chernoff – CNN Sr. Correspondent
Mary Hebig remembers the day three years ago when she knew she had to quit her job as a scheduler with Gulfstream International Airlines because of worries about the airline’s safety. A flight, whose pilots she had scheduled, had lost one of its two engines. It was the second time in two weeks the plane’s engine had failed and Hebig was certain maintenance had not fixed the engine.
“It was 12 or 1 o’clock in the morning and I was praying that everyone got back safe. And I thought if they get back safe I am out of here. I don’t want to do this any longer here,” said Hebig, “I couldn’t sit there night after night, and I had the evening shift, and watch these pilots come in and know that there was an accident waiting to happen.”
Hebig is one of ten former and current Gulfstream employees who have told CNN of serious safety concerns at the Fort Lauderdale-based airline.
Fort Lauderdale-based Gulfstream operates “Continental Connection” flights to nine cities in Florida, 10 destinations in the Bahamas, and between Cleveland and 5 small cities in Pennsylvania, West Virginia and New York.
Continental Airlines told CNN, "We expect our partners to adhere to the highest safety standards.”
Yet former Gulfstream pilots say their complaints about aircraft safety were sometimes dismissed by mechanics who were pressured to get planes into the sky.
“We would voice concerns to maintenance about systems that were not testing properly and were told by individuals in maintenance that were Gulfstream mechanics to not worry about it, to just go,” said Ken Edwards, a former Gulfstream pilot. “It happened to me more than once. One time it was a fire indication system that was not going to work properly in the air.”
Dan Brisco, who worked as a mechanic for Gulfstream in 2006 and 2007, claims maintenance standards at Gulfstream were the worst he’s seen in 30-years as a mechanic and pilot.
Related: Florida's "pilot factory"
What’s on Tap – Monday June 1, 2009
Here are the big stories on the agenda today:
- Breaking now… Air France confirms to CNN that a flight from Rio de Janerio bound for Paris is missing. It fell off the radar. There are 216 passengers and 12 crew members on board.
- D-day for General Motors. What was once the world’s biggest automaker will file for chapter 11 bankruptcy protection this morning. President Obama will address the nation about the government takeover at 11:55 AM ET. The saying was “as goes GM, so goes the nation.” So now what for the nation? We’ll speak to Michigan’s governor about the fallout for her state and the ripple effect across the Midwest, the country and the continent!
- And – a long-time target of anti-abortion activists - killed in cold blood. Kansas Doctor George Tiller was gunned down at his church in Wichita. Tiller was one of the only U.S. doctors performing late-term abortions. A suspect is in custody, and police are still trying to determine a motive. We're live in Wichita with this developing story. We’re also talking to a woman in the same profession who knew Tiller for 30 years, about living with the constant threat of violence.
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