Speeches & Floor Statements
Posted on June 4, 2009
We are introducing today the “Auto Stock for Every Taxpayer Act” to require the Treasury to distribute to individual taxpayers all its stock in the new GM and Chrysler within one 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% of shares in the new GM and and 8% 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. The stock certificates would be in your name, not that of your government. To keep it simple, and to help the little guy 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 GM –told senators and congressmen in a telephone call Monday that while it is the Treasury’s decision to make, that this is a “very large amount” of stock, and that the orderly offering of those shares to establish a market might have to be “managed down over a period of years.” Those shares might not be worth 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 dollars per share two 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 GM and Chrysler spent four 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 didn’t have much time yesterday to design, build or sell cars and trucks. Unless we get the stock out of the hands of Washington, this scene will be repeated over and over and over again. There are about 60 Congressional committees and subcommittees authorized to hold hearings on auto companies and most of them will, 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 briefing books from subcommittee to subcommittee. You can just imagine the questions: About what the next model should look like. About which plant should be closed. How many cars should have flex fuel. What the work rules and the salaries ought to be. Where the conferences could and could not be held. Congressmen will want to know why the Volt is using a battery from a South Korean company when it could 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 has already called the mayor of Detroit to assure him that he supports keeping the headquarters of General Motors in Detroit instead of moving it to Warren, Michigan, and the mayor has announced his satisfaction with talking with many members of the president’s auto task force to make sure the executives of the car companies don’t get any ideas of their own about moving headquarters. There is the Treasury secretary—and his undersecretaries—who will want to keep up with what is happening to the taxpayers’ $50 billion. There is a very active economic czar in the White House. Not to mention the EPA officials who are deciding what size cars should be built. And of course it was not long ago that the administration let General Motors know that it was making too many SUVs, that its new Volt was too expensive to work, and the President 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 Americans who may be a little more interested 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’s 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, D.C.” To get our economy moving again, let’s get our auto companies out of the hands of Washington and back into the marketplace – the sooner the better.