In a bankruptcy the shareholders get nothing. Debt comes before equity and the union is one of the creditors.
(But in any case, the union is hardly the only beneficiary of keeping GM afloat; it's not zero-sum.)
(But in any case, the union is hardly the only beneficiary of keeping GM afloat; it's not zero-sum.)
Regarding societal benefit of the bailout, even with imminent domain, the government has to give the owners fair compensation. It can't simply step in and disregard rule of law and pick and choose its preferred winners.
Keeping GM afloat in no way excuses the preferential treatment. The unions hardly took a haircut at all compared to the bondholders:
http://online.wsj.com/news/articles/SB1000142405270230376810...