- The Washington Times - Tuesday, June 16, 2009

Dennis Buchholtz

Family: Wife and five adult children

Year GM bonds were purchased: 2005

Percentage of portfolio at purchase: 25 percent

Current percentage: “Probably about 1 percent because they’re not worth anything.”

Reason for buying GM bonds: They were paying 7.2 percent interest, while the bank paid only 2 percent, and he trusted the company.

Reason for holding after downgraded to junk in 2005: He didn’t know what else to do with them and hoped GM would “turn around.”

Original investment goal: To diversify investments and generate income for retirement

Dennis Buchholtz said that investing in General Motors bonds seemed like a sure, simple way to collect income during his retirement. He thought he was smart to remove his money from the unstable real estate market and to put it into something “solid.”

But his investment left him with anything but stability after GM’s bankruptcy filing this month. Mr. Buchholtz, who has been semi-retired for 19 years, said he has lost $140 to $150 a week, enough to “affect anybody.”

Mr. Buchholtz said the GM bankruptcy has squeezed his hobbies and recreation, including his annual fishing trip to Canada.

“I told the guys on this trip that I doubt I will be able to do it again next year,” he said.

Mr. Buchholtz said he hopes to get more out of his investment eventually but isn’t confident that will happen. The federal government’s majority ownership in the company will cause more harm than good, he said, especially for retirees like him. He worries a lot about the impact of all the recent billion-dollar bailouts.

“What is the scariest thing to a retiree but inflation?” he asked. “You have a fixed income as a retiree, and dumping trillions of dollars into the economy is going to devalue the dollar.”

Cliff St. Pierre

Age: 70

Residence: Gross Ile, Mich.

Occupation: Retired Chrysler project manager

Household income: N/A

Family: Wife and three grown children

Amount invested in GM bonds: About $200,000

When GM bonds were purchased: Unknown

Percentage of portfolio at purchase: 80 percent

Current percentage: N/A

Original investment goal: Retirement income and funds to cover major medical expenses

Cliff St. Pierre is polite but upset. He has spoken out at rallies over the past few months, making the case that small-time bondholders are being shut out of GM’s bankruptcy and are being hurt financially.

Mr. St. Pierre hoped his GM bonds would supplement his retirement income and be there in case of a medical emergency. Instead, he said, he’s living pretty much day to day.

He had worked in the auto industry since he got out of high school, first at GM and then at Chrysler, where he stayed until he retired. He thought GM bonds were a smart investment and pointed the finger of blame at Washington for undermining that expectation.

“We, like many other small bondholders, have been devastated by this travesty that has been perpetrated on us by the government. They are the ones that have forced this hellacious settlement on us as a ‘take it or leave it’ proposal,” he said. “I think it is almost criminal.”

Mr. Pierre said he plans to write to his representatives in Congress to complain and ask for financial help, though legislation does not appear to be forthcoming.

Mark Modica

Family: Wife and three children

Year GM bonds were purchased: Over the past three years

Percentage of portfolio at purchase: 75 percent

Current percentage: 25 percent

Reason for buying GM bonds: Security

Reason for holding after downgraded to junk in 2005: “I still was optimistic due to the fact the company and administration said bankruptcy was not an option.”

Original investment goal: Funding children’s college education

“People talk about the bad reputation of used-car salesmen,” said Mark Modica, laughing at his own job at a Saturn dealership. “But the whole bond negotiation and settlement was just so deceptive, and the government was playing right along.”

Mr. Modica and his wife purchased their GM bonds to fund their children’s education but now will need to find another source. Mr. Modica predicts the bonds will lose more than half their value in the debt-for-equity swap under plans for GM’s bankruptcy.

“The Obama administration just kept playing it up like there was a chance everything would come together,” Mr. Modica said. “It’s too bad.”

Ted Dobski

Age: 65

Residence: Detroit

Occupation: Retired GM buyer

Household income: Pensions and Social Security, half of what he made when he worked for GM

Family: Wife and grown children

Amount invested in GM bonds: $80,000

Year GM bonds were purchased: 2001

Percentage of portfolio at purchase: 70 percent

Current percentage: 25 percent

Reason for buying GM bonds: Decent rate of return from a solid company

Reason for holding after downgraded to junk in 2005: “I believed in the company.”

Original investment goal: Income for retirement

Ted Dobski was a senior buyer at GM for 33 years before retiring to drive a sedan in his spare time. He first invested in GM the year he retired from the company, hoping for “quick income.”

That didn’t happen. He has lost about $500 a year in interest, which will “cut down on a lot of fringes that we could enjoy,” he said.

Mr. Dobski’s concern was not so much for himself but for the salaried workers who face an even more uncertain future.

“That’s what upsets me,” he said. “The real personal part.”

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