Letter to President Donald Trump

December 13, 2018

President Donald Trump
White House
1600 Pennsylvania Ave NW
Washington, DC 20500

Dear President Trump:

After repeatedly telling the autoworkers in Ohio and Michigan not to sell their homes because the jobs are coming back—“believe me, believe me,” you declared, GM is making a fool of you and you are pouting and doing nothing.  Last month, GM, now a profitable company, announced that it will “idling” five plants—four in the U.S., one in Canada, putting over 15,000 workers out of work. GM is also opening another auto plant in Mexico— to further mock your declarations. GM says it is doing this because its sales are shifting ever more to SUVs, crossover vehicles and light trucks, and away from small cars and large four door sedans.

GM’s decision comes after a $10 BILLION stock buyback designed to increase the metrics and other forms of compensation for GM executives. As with all buybacks, they create no jobs, no new productive facilities, no better wages, salaries, or firmly based pension plans, no R&D, nor anything that could be called a productive investment.

Your notorious tax law favoring the wealthy and corporations was justified on the basis of releasing more capital for productive investments and job formation. GM benefitted from this tax cut, as a company, to the level of at least $150 million, not counting the large sums retained by highly paid GM executives starting with CEO Mary Barra.

In the light of all this background, what is Donald J. Trump, the “big boy” in the White House, going to about GM and its aggressive rebuke?

First, you can demand that the tax cut you pushed for GM be used to extend the severance pay for the laid off GM workers. Second, you can demand that the workers be given the equivalent of the GM shares, purchased via the buyback, that would provide, under similar circumstances, further assistance or a trust fund for each of the laid off workers to sustain them and their families in their lonely and difficult quest for employment commensurate with their skills and  pay.

Second, you can remind GM and the American people how in 1980-1981, GM demanded the city of Detroit use a “quick take” eminent domain statute to take over and demolish the Poletown neighborhood. This community included 465 acres where 1500 homes, 117 businesses, 12 churches, and a hospital were located in a peaceful, multi-racial community. GM further  demanded and received over $350 million in local, state, and federal subsidies. In return, GM promised to build a Cadillac factory employing 6,000 workers. The promise of 6,000 jobs was never kept. GM promptly maximized its automation—experiencing recurrent, expensive troubles— and settled on a workforce of about 3,000 laborers. Did GM have to return a proportional amount of its subsidies? No, not a dollar was returned to the taxpayers.

Years later, starting with George W. Bush’s administration and culminating in Barack Obama’s administration, GM received $50 billion in bailout money, allegedly repaid $39 billion and retained $11 billion for itself. The federal government, owning over 60% of GM stock in return for the billions in bailout monies, sold the stock at a loss.

This is some of the background of taxpayer largesse, seizure of shareholder’ money, without their approval, for selfish stock buybacks that did not increase shareholder value. What did bump the price of GM stock recently was the company’s announcement of these plant closures and layoffs of workers—a perverse reaction indeed.

You have more than enough arguments now to use your bully pulpit and diminish your image as a paper tiger when your early boastful promises to workers are mocked by the corporate bosses who take your tax cuts and laugh all their way to the bank. Something more than a tweet, please.

I’m sending this letter to selected members of Congress and the auto industry press and look forward to your considered response.

Sincerely,

Ralph Nader

PO Box 19312
Washington, DC 20036
[email protected]

* GM’s demands for tax breaks and subsidies and its destruction of a vibrant community was recounted in a 1981 CBS network documentary, “What’s Good for General Motors,” and in a 1989 book titled, Poletown: Community Betrayed, by Jeanie Wylie (University of Illinois Press).