Bondholders at General Motors ( GM) are unhappy with the progress of talks aimed at getting them to swap debt for equity.

"GM literally has thousands of bondholders," said a person familiar with the talks between the automaker and its bondholders committee. "If you really want all these retail holders, everyone scattered around the world, to do this swap voluntarily, you're going to need something to make this attractive so that people will actually do this the way you want to do it."

In lieu of scheduled debt repayments, bondholders are being asked to take GM stock, which, not surprisingly, they view as speculative. Moreover, they would take stock for 66% of their debt, while the proposed deal with the Voluntary Employee Beneficiary Association health care trust fund offers stock for 50% of the debt.

Bondholders "are being asked to take nearly all of the risk of the viability of this enterprise going forward," said the source, who requested anonymity because he wasn't authorized to speak about the confidential negotiations. "There needs to be some level of shared sacrifice from all of the stakeholders." UAW President Ron Gettelfinger has also called for "shared sacrifice" from all parties.

GM spokeswoman Renee Rashid-Menem said the company "remains engaged in discussions with advisers to the unofficial bond holder committee in efforts to work toward successful resolution of the exchange." She declined to comment on specifics of the discussions.

The terms were set out in the agreement that has so far enabled GM to borrow $13.4 billion from the Troubled Asset Relief Program, starting in January. Talks are being overseen by President Barack Obama's auto task force in an effort to reach a deal enabling the automakers to restructure outside of bankruptcy court. The risk is that a court settlement, mandated by a federal judge, could be even less favorable to the bondholders.

Bondholders want flexibility on the terms "as opposed to sticking to something dictated back in December," the person said.

GM shares were trading Friday at $2.82, up 5 cents. Shares in Ford ( F) traded at $2.56, up 5 cents.

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