Speeches & Floor Statements
Posted on June 4, 2009
Madam President, today along with Senator Bennett and Senator McConnell and Senator Kyl, I am introducing the Auto Stock for Every Taxpayer Act - to require the Treasury to distribute to individual taxpayers all its stock in the new General Motors and Chrysler within 1 year following the emergence of the new GM from bankruptcy proceedings. This is the best way to get the auto companies out of the hands of Washington bureaucrats and politicians and into the hands of the American people in the marketplace where they belong. So instead of the Treasury owning 60 percent of shares in the new GM and 8 percent of Chrysler, you would own them if you were one of about 120 million individual Americans who paid Federal taxes on April 15. This is the fastest way to get the stock out of the hands of Washington and back into the hands of the American people who paid for it. To keep it simple, and to help the little guy and girl also have an ownership stake in America's future, Treasury would give each taxpayer an equal number of the available shares. The Treasury Department has said it wants to sell its auto shares as soon as possible, but Fritz Henderson, president and CEO of General Motors, told Senators and Congressmen in a telephone call on Monday that while it is the Treasury's decision to make, this is a "very large amount" of stock, and that orderly offering of those shares to establish a market may have to be "managed down over a period of years." Those shares might not be worth very much at first, but put them away and one day they might contribute something toward a college education. For example, General Motors' 610 million shares were only worth 75 cents just before bankruptcy, but they were worth $40 per share 2 years ago, and $75 a few years before that. Already we can see what government ownership of car companies will look like. Yesterday the presidents of General Motors and Chrysler spent 4 hours in front of congressional committees talking about dealerships. I assume they drove themselves here from Detroit in their congressionally approved method of transportation, probably their newest hybrid cars. They did not have much time yesterday to design, build, or sell cars and trucks for their troubled companies. Unless we get the stock out of the hands of Washington, this scene will be repeated over and over again. There are at least 60 congressional committees and subcommittees authorized to hold hearings on auto companies, and most of them will hold hearings, probably many times. Car company executives who need to be managing complex enterprises will be reduced to the status of an assistant secretary in a minor department hauling briefings books from subcommittee to subcommittee. You can imagine what the questions will be and the president of each company will probably be asked these questions: What will the next model look like? What plant should be closed and which one opened? How many cars should have flex fuel? What will the work rules be? What will the salaries be? Where will the conferences be held, and in which cities should they not be held? Congressmen will want to know why the Chevy Volt is using a battery from a South Korean company when it can be made in one of their congressional districts. There will be a lengthy hearing about the number of holidays allowed, and thousands of written questions demanding written answers under oath. And it is not just the Congress we have to worry about. The President of the United States has already called the mayor of Detroit to reassure him that the headquarters of General Motors should stay in Detroit, instead of moving to Warren, MI. And the mayor of Detroit has announced his satisfaction with talking with members of the President's auto task force to make sure that the executives of the car companies do not get any ideas about moving their own headquarters. Then there is the Treasury Secretary - and his Under Secretaries - who will want to keep up with what is happening to the taxpayers' $50 billion investment in the New General Motors. There is a very active economic czar in the White House. He will have some questions and opinions as well about how to run the car companies, not to mention the Environmental Protection Agency officials who might be busy deciding what size cars they ought to build. And, of course, it was not very long ago that this administration let General Motors know that it was making too many SUVs and that its Chevy Volt was going to be too expensive to work. That was the opinion here in Washington. And the President of the United States himself fired the president of General Motors. Giving the stock to the taxpayer who paid for it will get the government out of the companies' hair and give the companies a chance to succeed. It will create an investor fan base of 120 million-plus American taxpayers who may be a little more interested now in what the next Chevrolet will be. Think of the fan base of the Green Bay Packers, whose ownership is distributed among the people of Green Bay. This is the fastest way back to the wise principle: If you can find it in the Yellow Pages, the government probably shouldn’t be doing it. More than the money, it is the principle of the thing. The other day, a visiting European automobile executive said to me with a laugh that he had come to the "new American automotive capital: Washington, DC." To get our economy moving again, let's get our auto companies out of the hands of Washington and back into the marketplace. Let's put the stock in the hands of 120 million taxpayers, the sooner the better.