Speeches & Floor Statements
Floor Remarks of U.S. Senator Lamar Alexander (R-Tenn.) -- Government Stock in General Motors and Chrysler
Posted on July 7, 2009
Mr. President, the Senator talked about spending and debt. During my week in Tennessee last week, if I heard about anything, it was about too much debt. People are genuinely worried about the amount of new debt and spending in Washington. But if I heard anything else last week, it was about too many Washington takeovers. Senator McCain mentioned some of them. He mentioned banking. He talked about, perhaps, student loans. He mentioned the health care industry. And he mentioned the automobile industry, which is what I would like to talk about for a few minutes this morning. Yesterday was good news for General Motors. The judge in the bankruptcy case apparently approved a plan that by the end of the week should free General Motors from bankruptcy, and we could have a new GM, for which I wish great success because General Motors has made great contributions to our State of Tennessee over the last 25 years. Its Saturn plant has helped to attract hundreds of suppliers and has produced a good car, although they never made any money for one reason or another. But they made a great contribution to our State. So the good news is General Motors is going to get out of bankruptcy. The bad news is that the U.S. Government still owns 61 percent of General Motors, as well as about 8 percent of Chrysler. And it was paid for with real dollars. Mr. President, $50 billion or so in taxpayer dollars went to buy 61 percent of General Motors. Well, I have a solution which I would like to discuss, offered by the Senator from Utah, Mr. Bennett; the Senator from Arizona, Mr. Kyl; the Senator from Kentucky, Mr. McConnell, other Senators, and myself. Our legislation would direct the Department of the Treasury, within 1 year after General Motors comes out of bankruptcy, to distribute all of the government stock in General Motors and in Chrysler to the 120 million Americans who pay taxes on April 15 -- in other words, a stock dividend. We want to give the stock to the people who paid for it. The idea is pretty simple: I paid for it, I ought to own it. Not only would that stop the incestuous political meddling that seems to go on here in Washington with General Motors -- Washington cannot seem to keep its hands off the car company -- it would also create an investor fan base of 120 million Americans who might be interested in the success of General Motors or be a little more interested than they are today. Think of the Green Bay Packers. The fans own the team, and the fans are even a little bit more interested in who the quarterback might be than they might otherwise be. Well, if 120 million Americans owned a little bit of General Motors, the New GM, they might be a little more interested in the next Chevy and it might help General Motors succeed. I can suggest one thing that will make sure the company does not succeed, and that is to keep the ownership of General Motors in Washington, DC, with meddling politics interfering with the executives and the workers who are designing and building and selling cars -- or who, I might say, ought to be designing, building, and selling cars. When I first suggested that what we ought to do is just give the stock to taxpayers, I think some of my colleagues thought I might be being facetious. But this is a very normal corporate event. It is called a stock distribution or a corporate spinoff. In 1969, Procter & Gamble did a spin off with Clorox, its subsidiary. Procter & Gamble decided its Clorox subsidiary was not a part of the core business of Procter & Gamble anymore, so it simply gave shares of Clorox to people who owned the major company, Procter & Gamble. Time Warner did it with Time Warner Cable in March of 2009. PepsiCo did it with its restaurant business in 1997 by spinning off KFC, Pizza Hut, and Taco Bell. If you stop and think about it, it is the simplest way to solve the problem. The President has said he does not want to micromanage General Motors and that he plans to sell it. But the President himself has already fired the president of General Motors, put in the board, and called the mayor of Detroit and said he believes the headquarters ought to be in Detroit instead of Warren, MI. Next, you have the chairman of the House Financial Services Committee calling up General Motors saying: Don't close a warehouse in my district. Senators from Tennessee and Michigan and other States are saying: Please put a plant in our states. We have at least 60 Congressional committees and subcommittees that could have the General Motors and Chrysler executives drive their congressionally approved hybrid cars to Washington to testify all day when they ought to be home trying to figure out how to make a car that would sell better than a Toyota or a Nissan or a Honda or some other company. So let's get the stock out of Washington and into the hands of the taxpayers. Madam President, I have twice presented a car czar award to try to put a spotlight on the political meddling in Washington, DC. Once I gave it to Barney Frank, the chairman of the House Financial Services Committee, who called up the General Motors president and said: Don't close a warehouse in my district, and General Motors did not close the plant. Once I gave the award to myself and others, who met with GM people and said: Please put a plant in our district. Today I would like to present it to a real car czar. In the June 1 Wall Street Journal, there is an article by Lieutenant General Pacepa, who was literally the car czar of Romania. Madam President, basically, he says: The United States is far more powerful than Great Britain was then, and no American Attlee should be capable of destroying its solid economic and political base. I hope that the U.S. administration, Congress, and the American voters will take a closer look at history and prevent our automotive industry from following down the [road of the Romanian cars.] He cites many examples. For example, how the President of Romania decreed that the Oltcit parts were to be manufactured at 166 existing Romanian factories in parts of the country that corresponded to the voting districts. I can see that happening in the United States. We already have Congressmen saying: Don't buy a battery in South Korea; buy one made in my congressional district. General Motors might be buying a battery from South Korea because it would make the Chevy Volt a success. In the New York Times in 1989, there was an article talking about Soviet cars called the Lada, which were the brunt of many jokes, and the difficulty the Soviet Union had coming out of perestroika and glasnost. There were jokes such as: What do you call a Lada with twin tailpipes? A wheelbarrow. Why do Ladas have heated rear windows? So you can keep your hands warm when you are pushing them in the snow. We politicians don't know anything about making cars. We should not pretend we do. The American people know that. They don't like the fact that the federal government has spent more than $50 billion bailing out the car companies, but the American people like it worse that we in Congress are sitting on 60 committees and subcommittees acting as if we are going to help the auto companies succeed. The single most important thing we can do to celebrate General Motors coming out of bankruptcy this week is to pass legislation we have offered, which would give all of the stock the government has in General Motors and Chrysler, within 1 year, to the 120 million Americans who pay taxes on April 15. The rationale is very simple: They paid for it; they should own it. That would begin to stop this trend we are seeing every day and every month in Washington of too many Washington takeovers and move us back in the direction we ought to go to rebuild a great car company and get jobs flowing in this country again. I thank the Chair and yield the floor.