Armed with handmade signs and angry over the money they lost on General Motors bonds, about 150 small investors gathered in a Detroit suburb Wednesday to demand a seat at the negotiating table.
The ailing automaker has been cutting jobs, slashing production and trying to convince bondholders to swap their debt for equity in an effort to stave off bankruptcy and obtain billions more in emergency loans from the US government.
But the small investors who rallied at the Warren, Michigan city hall said the hard line the Obama administration's automotive task force is taking with bondholders could force GM into bankruptcy.
"We only want a fair deal," said John Sion of Chicago, a retired commodity trader who owns more than 700,000 dollars in GM bonds.
Sion said he was concerned that the interests of small investors are being left out of the negotiations over the fate of GM.
"They're setting the bondholders up as a scapegoat if GM does go bankrupt because they don't want to be accused of bailing out GM," he told AFP.
Under a plan announced Monday, GM's bondholders would get 10 percent of the company's stock through an exchange of 27 billion dollars in outstanding bonds.
The plan is contingent on the US Treasury swapping 10 billion dollars in loans for common stock and the United Auto Workers (UAW) union accepting shares in exchange for a similar level of obligation to its health care funds.
GM has offered bondholders 225 share of GM stock for every 1,000 dollar face of value of bonds, but the bond holders have largely balked at the offer.
Bankruptcy is the probable outcome if bondholders don't accept the deal, GM chairman Fritz Henderson has said.
GM is working against a June 1 deadline from the US government to come up with a new viability plan or face the end of government credits, which would force the company into bankruptcy.
Clifford St. Pierre, a retired Chrysler project manager, told the rally that 80 percent of GM's outstanding debt is held by 120 large financial institutions ranging from banks to hedge funds.
The remaining 20 percent, which amounts to billions of dollars, is held by more than 100,000 individual investors.
"I feel that GM has a bright future," St. Pierre said. "I don't want to see it put into bankruptcy ... But we feel we are entitled to an equitable settlement."
Another small investor who identified himself simply as Dennis said he had invested 98,000 dollars in GM bonds and the investment is currently valued at 5,000 dollars.
The investment could be reduced to nothing if GM filed for protection under Chapter 11 of the bankruptcy code.
Dennis bristled at the fact that the current plan would give the US Treasury and the UAW union nearly nine times as much stock than bondholders, even though bondholders were being asked to swap about seven billion more in debt.
"That should change," he said. "I'm very concerned. We only want a fair deal."
The rally was organized by 60 Plus, an advocacy group for senior citizens based in Northern Virginia.
"While we're sympathetic to all parties in this negotiation, our government should also be sympathetic to small investors who may have invested their entire life savings in the General Motors Corporation," said Amy Noone Frederick, a vice president of 60 Plus.