As they were steering General Motors into bankruptcy at early this month, the President Goodwrench team arranged for the United Auto Workers' pension fund to get 30 percent of the stock when the "new" company comes out at the other end. Bond holders will get 10 percent and the U.S. Government will keep 60 percent for itself.
If the "new" GM becomes profitable it may eventually pay back the $50 billion the government has advanced to it, but the term "government ownership" lacks the ring of legitimacy that "taxpayer ownership" has.
U.S. Senator Lamar Alexander (R-T) wants to do something about that. He is the lead sponsor for the Auto Stock for Every Taxpayer bill which would distribute the government's stock in GM (and Chrysler, too) to the 120 million Americans who paid income taxes on April 15. He says, "That is the fastest way to get ownership of the auto companies out of the hands of meddling Washington politicians and back into the hands of Americans in the market place."
This is no voice in the wilderness. A recent AutoPacific poll reports that 81 percent of Americans agreed that "the faster the government gets out of the automotive business, the better." Conversely, 95 percent of those polled disagreed with the statement, "...the government is a good overseer of corporations such as General Motors and Chrysler." And 93 percent disagreed that "having the government in charge [of the two automakers] will result in cars and trucks that Americans will want to buy." So much for the flimsy cars with which President Goodwrench wants to fill the market.
To make sure his proposal to put automaker stock in the hands of actual taxpayers gets the attention it deserves, Sen. Alexander the other day began a program to draw attention to the downsides of Washington management of auto companies. He introduced on the floor of the Senate his "Car Czar" awards. As he put it, "It's a service to taxpayers from America's new automotive headquarters, Washington, D.C."
The Car Czar awards, he adds, "...will be conferred on Washington meddlers who make it harder for the auto companies your government owns to compete in the world marketplace." The first award went to Rep. Barney Frank (D-MA) "for interfering in the operation of General Motors."
Rep. Frank is Chairman of the House Financial Services Committee, well known for his oft-denied roll in pressuring Fannie Mae and Freddie Mac to push banks to make risky home loans.
Two weeks ago, it turns out, Mr. Frank learned that General Motors, as part of its restructuring plan, would close a parts distribution warehouse in Norton, Massachusetts by year's end. Despite the President Goodwrench team's constant pressing of GM to cut more and more, anything in Barney Frank's district is out of bounds if he has anything to say about it, and he did. He put in a call to GM CEO Frederick "Fritz" Henderson and -- voila -- the Norton warehouse was saved. This warehouse has 90 employees. We can assume that they and their spouses will show their gratitude to Mr. Frank at the polls in November next year. That's 180 votes. He should really think in larger terms. If he were to sponsor a House version of Sen. Alexander's Auto Stock for Every Taxpayer legislation, think of the thousands of grateful citizens in his district who would support him. Indeed, they might even demand that the local federal building be named after him.