Speeches & Floor Statements

Floor Remarks of U.S. Senator Lamar Alexander (R-Tenn.) with Debate - Vote on Auto Stock to Tax Payers Amendment

Posted on July 29, 2009

I thank the managers of the bill for creating the opportunity for this vote. The American people want the Federal government out of the auto business. I believe Democrats and Republicans in the Senate would like to have the government out of the auto business. President Obama has said he would like to have the government out of the auto business. Yet we are in the auto business in a big way for the foreseeable future unless we take some action. The taxpayers have almost $70 billion for 60 percent of the stock in General Motors and about 8 percent of the stock in Chrysler. My amendment is identical to a bill cosponsored by the distinguished Senator from Utah, Mr. Bennett, and Senator McConnell, Senator Kyl, and others. What this amendment would do, most importantly, is have the Treasury, within a year, to declare a stock dividend, which means to give the common stock the government owns in General Motors and Chrysler to the 120 million Americans who pay taxes on April 15. They paid for it. They should own it. Why is that a good idea? Polls show that 95 percent of Americans disagreed "that the government is a good overseer of corporations such as General Motors and Chrysler." We know that. We have seen the incestuous relationship that develops. We own the company, so we call up the managers and say: Change your dealer contracts. Don't close a warehouse in my district. Put your plant in my State. Why are you buying a battery from South Korea when you could be buying one from my congressional district? We can, and are, summoning the executives of General Motors and Chrysler to the more than 60 committees and subcommittees in Congress that have some say-so over these companies we own, one of which we own a big majority of. So the executives have to drive in their congressionally approved methods of transportation to Washington, DC, and spend time talking to us, who know nothing about building cars, but that doesn't stop us from giving them a lot of advice. Then these executives go back. During that day they have talked to us, they haven't designed or built or sold a car. We need to get the stock out of the hands of the government and into the hands of the taxpayers. Several Senators have suggested a way to do that. The simplest way is the corporate spinoff or spinout. A spinoff is a new organization or entity formed by a split from a larger one. It typically happens when we have a corporation that has a subsidiary which increasingly doesn't have any relevance to the major corporation's business, so we simply give the ownership to the owners of the major corporation. That is what Procter & Gamble did with Clorox in 1969. Procter & Gamble decided Clorox didn't have anything to do with Procter & Gamble anymore, so they gave all the stock in Clorox to the owners of Procter & Gamble. In March 2009, Time Warner gave all the stock in Time Warner Cable to the people who paid for the stock in Time Warner. In 1997, PepsiCo gave all the stock in KFC and Pizza Hut and Taco Bell to the people who own stock in PepsiCo. Why should we not do that with General Motors and Chrysler? The taxpayers paid for it. They own it. We should give the stock back to all the taxpayers who paid for it on April 15. We should stop this incestuous political meddling with major American corporations. The only alternative, other than this, is to slowly sell down the stock over a period of years. Over that time, we will meddle so much, General Motors will never survive. This is the best thing for General Motors. It is the best thing for the country. If we want to reverse this trend of Washington takeovers of banks, insurance companies, and car companies, this is the simplest thing to do. I urge colleagues to vote yes on the motion to waive the budget point of order. I yield the floor. Mr. DURBIN. Mr. President, I commend my colleague from Tennessee for his ingenuity, creativity, but not necessarily for his wisdom. I don't agree with this amendment, and I am going to oppose it and urge my colleagues to do the same. The U.S. Government never wanted to get in the automobile business. President Obama has said that. He said he will not run these companies. That is not why he ran for President. What he tried to do is to save some major companies in America and, more importantly, save jobs as well. What he tried to do was create incentives for the companies to make some decisions they needed to make: Chrysler to ally with Fiat for the future; General Motors to basically gear down the number of cars they are going to make and the number of brands, try to be a leaner company that is going to be more responsive to American consumers. That is why we are in the automobile business. The President, nor any member of his Cabinet, is not sitting down on a day-to-day basis making decisions when it comes to the future of the automobile companies. The Senator from Tennessee wants to take the taxpayers' investment in General Motors and other companies and basically turn it into a couple shares of stock, maybe 10, 20 -- I am not sure -- for every American. That may be an approach, but I don't think it is one that is well thought out. What happens then at the next General Motors shareholders meeting, after Senator Alexander's wish comes true? Who stands up to the management of the company? Does each of us give up a day of work and go to the meeting to sit down and help make these decisions? Not likely. What is more likely to occur is that the ownership of General Motors will feel no obligation. This stock ownership being distributed across America is going to dilute the impact of shareholder rights and the impact of shareholder power. I would rather have at least the prospect and the possibility that if the administration and management of General Motors goes too far in one direction, they know that TARP, the money being spent there, is going to be a factor they have to take into consideration. What could they possibly do that would enrage the taxpayers of America who have saved their company? They could do what some of the banks did: They could declare multimillion-dollar bonuses for the people who work for them. What is holding them back? Their largest lender, the U.S. Government, which doesn't exactly like that idea, as most Americans do not. This is going to end up liberating General Motors in many respects -- maybe some positive but also some negative, terrible decisions which they could make with impunity after the amendment passes. There is a reason this was defeated in the Appropriations Committee. There is a reason it should be defeated on the floor of the Senate. Before we embark on this idea of providing a couple shares of stock to every citizen, we ought to step back and ask ourselves: Is this the best outcome to make sure this company and its workers' and retirees' rights survive, or is this kind of an ingenuous, creative idea that ought to be thought through? This needs to be kept in the pot, boiling on the stove a little bit longer, before we decide we are going to embark on what is a first of its kind in America. Every example Senator Alexander gave involved shareholders receiving shares in companies. They weren't given to the public at large, which is what he is proposing here. That is a dramatic difference. We are diluting the impact on the shareholders with the Alexander amendment. I hope my colleagues will join me in opposing it. Mr. ALEXANDER. The Senator from Illinois made an eloquent argument about why he believes it is better for the government to run the auto companies. I believe it is better to put it in the hands of the stockholders. Those are the people who pay taxes on April 15. Mr. DORGAN. I understand what Senator Alexander wants to do. I have some of the same instincts. The President does as well. I don't want the Federal Government running America's corporations. We want to divest as quickly as we can. We want the companies to recover. But whatever we do here, we need to do it in a way that protects the interests of the taxpayers. Theirs are the interests that are at risk. To set a date within 1 year does not protect the interests of the taxpayers. I happen to support a Corker amendment. I was a cosponsor of the Corker amendment that talks about the establishment of trustees, three trustees to actually be engaged in running these companies so the government is not running them. It talks about liquidating that trust by December 2011. But they would submit a report to Congress. That liquidation would not happen unless it maximizes the profitability of the company and the return to the shareholder. That is one thing missing in the Alexander amendment, the question of what maximizes the return to the American taxpayer. They are the ones who are at risk. What do we do to maximize the return, or are we going to leave tens of billions of dollars on the table because somebody simply wants to pass a piece of legislation with an artificial end date? I don't disagree with the intent of wanting to get out from under this issue of the Federal Government being engaged in these corporations. That is why I cosponsored the Corker amendment. Ms. STABENOW. Mr. President, I know there is a point of order against this amendment, but despite the intent, which I appreciate and agree with, of protecting taxpayer dollars, unfortunately, the way this is designed, it would actually put taxpayer dollars at risk by creating an end deadline so that we would have all of the taxpayers' interests coming up at the same time. It would lower the value. It would put the companies at risk of a takeover, which I don't believe my colleague or anyone in this body would want. It is incredibly important that we not try to intervene with end dates that are, in a way, going to backfire in terms of putting taxpayer investment in these companies at risk. Mr. ALEXANDER. Mr. President, I am surprised by this. I thought we all wanted to get the stock out of the government and into the hands of the taxpayers. The argument I am hearing is that the government is wiser than the marketplace, that it is dangerous to give the stock to the 120 million taxpayers who paid for it. It is their taxpayer money. They should own it. General Motors had 610 million shares before it went bankrupt and 51 percent of American families own stock. This is a classic difference of opinion. Do we wanted the government to run companies? Do we trust the government, or do we trust the shareholders? I trust the shareholders. I urge colleagues to vote aye.