[Congressional Record Volume 155, Number 100 (Tuesday, July 7, 2009)]
[Senate]
[Pages S7159-S7161]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TAXPAYER STOCK OWNERSHIP

  Mr. ALEXANDER. 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.
  Madam President, about how much time do I have remaining?
  The PRESIDING OFFICER (Mrs. Gillibrand). The Senator has 6 minutes.
  Mr. ALEXANDER. Thank you, Madam President.
  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 spinoff 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

[[Page S7160]]

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, I ask unanimous consent that following my remarks, 
this article about what Lieutenant General Pacepa learned as car czar 
be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. ALEXANDER. 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.

                               Exhibit 1

                      What I Learned as a Car Czar

                         (By Ion Mihai Pacepa)

        They say history repeats itself. If you are like me and 
     have lived two lives, you have a good chance of seeing the 
     re-enactment with your own eyes. The current takeover of 
     General Motors by the U.S. government, and United Auto 
     Workers makes me think back to Romania's catastrophic 
     mismanagement of the car factories it built jointly with the 
     French companies Renault and Citroen. I was Romania's car 
     czar.
       When the Romanian dictator Nicolae Ceausescu, decided in 
     the mid-1960s that he wanted to have a car industry, he chose 
     me to start the project rolling. In the land of the blind, 
     the one-eyed man is king. I knew nothing about manufacturing 
     cars, but neither did anyone else among Ceausescu's top men. 
     However, my father had spent most of his life running the 
     service department of the General Motors affiliate in 
     Bucharest.
       My job at the time was as head of the Romanian industrial 
     espionage program. Ceausescu tasked me to mediate the 
     purchase of a minimum, basic license for a small car from a 
     major Western manufacturer, and then to steal everything else 
     needed to produce the car.
       Three Western companies competed for the honor. Ceausescu 
     decided on Renault, because it was owned by the French 
     government (all Soviet bloc rulers distrusted private 
     companies). We ended up with a license for an antiquated and 
     about-to-be-discontinued Renault-12 car, because it was the 
     cheapest. ``Good enough for the idiots,'' Ceausescu decided, 
     showing what he thought of the Romanian people. He baptized 
     the car Dacia, to commemorate Romania's 2,000-year history, 
     going back to Dacia Felix, as the ancient Romans called that 
     part of the world. In that government-run economy, symbolism 
     was the most important consideration, especially when it came 
     to things in short supply (such as food).
       ``Too luxurious for the idiots,'' Ceausescu decreed when he 
     saw the first Dacia car made in Romania. Immediately, the 
     radio, right side mirror and backseat heating were dropped. 
     Other ``unnecessary luxuries'' were soon eliminated by the 
     bureaucrats and their workers' union that were running the 
     factory. The car that finally hit the market was a 
     stripped-down version of the old, stripped-down Renault 
     12. ``Perfect for the idiots,'' Ceausescu approved. 
     Indeed, the Romanian people, had never before had any car, 
     came to cherish the Dacia.
       For the Western market, however, the Dacia was a nightmare, 
     To the best of my knowledge, no Dacia car was ever sold in 
     the U.S.
       Ceausescu, undaunted, was determined to see Romanian cars 
     running around in every country in the world. He tasked me to 
     buy another Western license, this time to produce a car 
     tailored for export. Oltcit was the name of the new car--an 
     amalgam made from the words Oltenia, Ceausescu's native 
     province, and the French car maker Citroen, which owned 49% 
     of the shares. Oltcit was projected to produce between 90,000 
     and 150,000 compact cars designed by Citroen.
       Ceausescu micromanaged Oltcit, but he didn't even know how 
     to drive a car, much less run a car industry. To save the 
     foreign currency he coveted, he decreed that the components 
     for the Oltcit were to be manufactured at 166 existing 
     Romanian factories. Coordinating 166 plants to have them 
     deliver all the parts on time would be a monumental job even 
     for an experienced car producer. It proved impossible for the 
     Romanian bureaucracy, which pretended to work and was paid 
     accordingly. The Oltcit factory could produce only 1% to 1.5% 
     of its intended capacity owing to the lack of the parts that 
     those 166 companies were supposed to furnish simultaneously. 
     The Oltcit project lost billions.
       Ceausescu was an extreme case, but automobile manufacturing 
     and government were never a good mix in any socialist/
     communist country. In the late 1950s; when I headed Romania's 
     foreign intelligence station in West Germany, I worked 
     closely with the foreign branch of the East German Stasi. Its 
     chief, Markus Wolf, rewarded me with a Trabant car--the 
     pride of East Germany--when I left to return to Romania.
       That ugly little car became famous in 1989 when thousands 
     of East Germans used it to cross to the West. The Trabant 
     originally derived from a well regarded West German car (the 
     DKW) made by Audi, which today produces some of the most 
     prestigious cars in the world. In the hands of the East 
     German government, the unfortunate DKW became a farce of a 
     car. The bureaucrats and union that ran the Trabant factory 
     made the car smaller and boxier, to give it a more 
     proletarian look. To reduce production costs, they cut down 
     on the size of the original, already small DKW engine, and 
     they replaced the metal body with one made of plastic-covered 
     cardboard. What rolled off the assembly line was a kind of 
     horseless carriage that roared like a lawn mower and polluted 
     the air worse than a whole city block full of big Western 
     cars.
       After German reunification, the plucky little ``Trabi'' 
     that East Germans used to wait 10 years to buy became an 
     embarrassment, and its production was stopped. Germany's 
     junkyards are now piled high with Trabants, which cannot be 
     recycled because burning their plastic-covered cardboard 
     bodies would release poisonous dioxins. German scientists are 
     now trying to develop a bacterium to devour the cardboard-
     and-plastic body.
       Automobile manufacturing and government do not mix in 
     capitalist countries either. In the spring of 1978 Ceausescu 
     appointed me chief of his Presidential House, a new position 
     supposed to be similar to that of the White House chief of 
     staff. To go with it he gave me a big Jaguar car, That 
     Jaguar, which at the time had been produced in a government-
     run British factory, was so bad that it spent more time in 
     the garage being repaired than it did on the road.
       ``Apart from some Russian factories in Gorky, Jaguars were 
     the worst,'' Ford executive Bill Hayden stated when Ford 
     bought the nationalized British car maker in 1988. How did 
     the famous Jaguar, one of the most prestigious cars in the 
     world, become a joke?
       In 1945, the British voters, tired of four years of war, 
     kicked out Winston Churchill and elected a leftist parliament 
     led by Labour's Clement Attlee. Attlee nationalized the 
     automobile, trucking and coal industries, as well as 
     communication facilities, civil aviation, electricity and 
     steel. Britain was already saddled by crushing war debts. Now 
     it was sapped of economic vigor. The old empire quickly 
     passed into history. It would take decades until Margaret 
     Thatcher's privatization reforms restored Britain's place 
     among the world's top-tier economies.
       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

[[Page S7161]]

     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 Dacia, Oltcit or 
     Jaguar path.

  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Madam President, how much time is left?
  The PRESIDING OFFICER. There is 12 minutes remaining.

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