Aig Bonuses
Madam Speaker, we have been coming to the floor for about 4 months now in an attempt to get to the bottom of one or two mysteries. I had hoped to be able to come to the floor today to indicate that one of those mysteries had been solved or…
Madam Speaker, we have been coming to the floor for about 4 months now in an attempt to get to the bottom of one or two mysteries. I had hoped to be able to come to the floor today to indicate that one of those mysteries had been solved or that we were closer to its resolution.
The Speaker will recall that earlier this year the United States Congress passed a stimulus bill that was requested by the new President of the United States, about $789 billion. And whether you agreed with that legislation or not, during its path through the legislative process there was great concern--and continues to be great concern; I heard one of my colleagues give a Special Order this afternoon about the bonuses, the millions of dollars of bonuses that are being paid to executives on Wall Street, executives who work for companies who, in some instances, have led to the mess we find ourselves in financially.
When the stimulus bill was being crafted over in the other body, the United States Senate, two Senators--one Republican and one Democrat, the Republican is Olympia Snowe of Maine, the Democrat is Ron Wyden of Oregon--they crafted language that would have put strings on, would have said maybe when things aren't going so good and we're giving billions of dollars of taxpayer money to these Wall Street firms, maybe we should have some conditions under which the bonuses are paid and how they're paid and how much they can get. But then a funny thing happened. The House passed its version, the Senate passed its version. Madam Speaker, you know that when we have bills that pass each Chamber and there are some differences in them, we have to appoint a conference committee, and they meet and work out the differences and then send back to us a conference report.
Somehow, somewhere in that conference committee, the language that was put in by Senator Snowe and Senator Wyden was taken out of the bill and about 40 words that are located on the easel to my left were inserted into the bill. And, Madam Speaker, as you read that language, not only were there no longer any strings on those bonuses, but this paragraph specifically protected any bonus that was given to any official, including the ones that became controversial a little later, AIG, and said any bonus that was agreed to before February 11, and February 11 was the day that the stimulus bill was passed, so anything agreed to before that day was protected. Then about a week later, the news came out that AIG, the insurance company that's received billions of dollars of taxpayers' money, was going to pay its executives $173 million in bonuses.
And you should have heard the hue and cry around this place, Madam Speaker. Everybody was shocked. The President of the United States was shocked. Members of Congress were shocked. Members of the United States Senate were shocked. People at the Department of Treasury were shocked.
Well, they shouldn't have been shocked because, after this language was inserted, the bill came back to both the House and the Senate. Every Republican voted against it; every Democrat, save 11, voted for the stimulus bill that included this paragraph that protected the $173 million in bonuses.
We have been coming to the floor for the last several months to try to find out, because nobody's fessing up. Nobody has said, Hey, you know what? I took out the first language and I put in this language, and maybe you could tell us why. But nobody will do that. Everybody wants this issue to go away. And as a matter of fact, people were so shocked that their reaction, the majority's reaction, was to come up with really a stupid bill, and that was to tax these bonuses, rather than going back and doing the right thing and taking out their mistake, to tax these bonuses at 90 percent.
And I will tell you why I call that a stupid bill, Madam Speaker. I call it a stupid bill because the person who got the biggest bonus at AIG got $6.4 million. I think it was a man. So if you're really mad at that guy, why just take away 90 percent of his bonus? Why don't you take away 100 percent of his bonus? So that stupid piece of legislation, and, thankfully, President Obama didn't think much of it and neither did the Senate, but the legislation over here still would have left that guy at AIG with $640,000. Well, Madam Speaker, in my district in northeastern Ohio, it would take 16 years for somebody making $40,000 a year to make $640,000. So again, rather than correcting the mistake, they came up with--it wasn't even a fig leaf, it was a fig tree to pretend that they were really mad about the bonuses that they authorized with their vote.
So we, myself and other Members, Mr. McCotter from Michigan, have been coming to the floor. And I grew up playing a game called Clue, a very wonderful game to play around the kitchen table with your kids. Hasbro, I think, is the manufacturer of it. And so with apologies to Hasbro, we came up with ``Clue,'' because if you play Clue, and, Madam Speaker, I don't know if you're a Clue player or not, but the
way Clue works is you start with a murder has been committed. In this case, it wasn't a murder. It was pretty bad, but it wasn't a murder. You start with what happened, and what happened is that somebody put in a bill in the middle of the night language that protected these bonuses that everybody became shocked about. So that's the crime in this particular instance. So you have to find out who did it. You have to find out where it happened in Clue, and you have to find out where the weapon is.
Now, the great news is that we know what the weapon is. It wasn't a gun or the lead pipe or the rope or any of that stuff. It was a pen. Somebody took a pen, took out the language that would have prohibited the bonuses, and then took the pen and wrote this paragraph into the bill.
So we got a third of the way there and I was feeling pretty good about it. And in our subsequent discussions here on the floor, we've pretty much narrowed it down. Here you have the Banking Committee, the Speaker's office, the conference room. And pretty clearly, it either happened in the Speaker's office or in the conference room. We get that from published reports, the shuttle diplomacy. I wish I could tell you that there was a Republican suspect in this, but there weren't any Republicans permitted into the conference room. So we believe, and I think for the purpose of this exercise we're going to say, that it happened in the conference room.
The missing piece and where I really thought we were getting close was who did it. Let's finish Clue, that it was Colonel Mustard with a pen in the conference room. And around this board we have the people that we believe, we know, were in the room and were capable of making this insertion. Madam Speaker, I know you know who they are. But just sort of running around the board here, down here Charlie Rangel, the distinguished chairman of the Ways and Means Committee. Here, a former colleague of ours, Rahm Emanuel, who is President Obama's Chief of Staff. Up here is Mr. Orszag, the OMB Director, the fellow that's the bean counter down at the White House. Over here is Senator Dodd from Connecticut, who is the chairman of the Banking Committee over in the Senate. In the upper corner is Ms. Pelosi, the distinguished Speaker of the House of Representatives, and Mr. Harry Reid, the distinguished majority leader over in the United States Senate. So we have narrowed it down to one of these folks.
And the question mark down there, and this is really a disappointment to me, sadly, some are just saying that it was some staffer that put the thing in. So the question mark is this staffer who apparently has the power to change law and make law. And it may have been a staffer who was using the pen, but clearly a staffer had to be directed by somebody to do that.
We thought originally that Senator Dodd, the chairman of the Banking Committee, might be the person we should focus in on. He's made some public statements, but the public statements now have gone back and forth. His office says that they put it into the bill at the request of the Treasury. The Treasury says that they put it in at the request of Senator Dodd.
So here's what we did. Being the sleuths that we're attempting to be, we went out and filed a bill that basically would have required these folks to hand over some documents and fess up and tell us why they did it. It went to the Financial Services Committee here in the House. And to his credit, one of the heroes of this Clue game is Congressman Barney Frank of Massachusetts, who chairs the Financial Services Committee. He called up the resolution, and that committee voted for it 64-0. So I'm feeling pretty good about it now. I think that we're actually going to get someplace. But, sadly, the way that this place works is that when legislation is reported out of the committee, it doesn't come here to the floor for discussion or debate unless it is scheduled by the distinguished majority leader of this body, Mr. Hoyer of Maryland. And even though that event occurred a couple of months ago, Mr. Hoyer has apparently determined that we are too busy here in the House of Representatives to deal with this issue. And we're going to talk a little bit about how busy we've been in a couple of minutes. But we've had a setback.
So Chairman Frank, again, deserves credit because, even though the majority leader won't bring this bill to the floor so we can figure it out with documents, Chairman Frank said to the Treasury, Look, just sit down with the people that are interested in finding out the truth here and hand things over.
So we had some conversations, and, sadly, I have to report to the House, Madam Speaker, that we've had a setback. And while I wanted very much to come and be able to solve this game so we could get on to something else, but there was a meeting, a conversation, on June 3 between representatives of the Financial Services Committee and a fellow by the name of Damon Munchus, M-u-n-c-h-u-s, who is the Deputy Assistant Secretary for Legislative Affairs. He indicated at this meeting where we were talking about it, and I was promised a letter talking about who did this, he indicated in that conversation that the Treasury thought that that meeting was to talk about policy options and had nothing to do with this particular issue. And he then stated that if the true goal of the meeting was to reconstruct conversations between Treasury and Senator Dodd and his staff regarding this bonus provision and how they got into the stimulus bill--and I would say duh. I mean, what have we been trying to do here for the last 3 months?-- that on the advice of counsel, the Treasury Department would be unable to provide any documents about those conversations.
So, again, it becomes kind of important that we have the majority leader schedule this resolution so we can get the documents so we can figure it out and we can move on to something else.
And I see my friend from Michigan is here, and I yield to Mr. McCotter of Michigan.
I thank the gentleman. And the answer to the first part of your question is clearly this is not indicative of transparency.
Look, all we want to do is move on and find out why somebody felt it necessary in a dark room in the dark of night to put in language that protected these $173 million worth of bonuses and why they did it. They may have a great explanation. I doubt it, but they may have a great explanation. We just want them to come forward and tell us ``I did it'' and why they did it.
So I can't report, Madam Speaker, that we have solved this particular episode of Clue. And, sadly, we have another mystery that has sort of reared its ugly head here on Capitol Hill.
I thank the gentleman for that.
And I would go a step further. I am certain that President Obama did not know that this had been inserted into the stimulus bill because he appeared on television after the bonuses were given and said he was shocked that these bonuses have been given, and people in his administration said they were going to do everything within their power to get this money back. So I agree with you 100 percent. The President did not know, to the best of my knowledge, that this was occurring. And even our colleagues in the House, Mr. McCotter, the Democrats who voted for the stimulus bill, except for 11 of them, I don't think they knew it either.
I'm not just trying to be a nitpicker. I will tell you that one of the problems is you may remember that stimulus bill that spent $789 billion of our constituents' money. It was about a thousand pages long. So it was like the phone book of New York City. And as that bill was coming to the floor that week, one of our colleagues on the Republican side made a motion and came up with this novel idea about how about if we have 48 hours, 2 days, to read the thousand pages, and here's another novel idea, what if we put it on the Internet so that our constituents, who are paying $789 billion, they have 2 days to sort of digest it and call their Representatives and express their views? That was Tuesday. The problem is the bill was taking a little longer than people anticipated. The President had promised that he was going to sign it by President's Day, so the bill was filed Thursday at midnight.
Now, I've apologized to my constituents for not being up Thursday at midnight to immediately begin reading the thousand pages. But when we arrived at work the next day, on Friday, we were told, You're not going to have 48 hours to read the bill; you're going to have 90 minutes to read the bill that spends $789 billion, and good luck to you. Now, I have been here 15 years, and I would suggest to you when you legislate that way, silly things happen. And I think a lot of our friends on the Democratic side of the aisle who voted for the stimulus bill that protected those bonuses didn't know it either, in fairness.
But that's why it's important, I think, to protect the integrity of the House and both Republicans, Democrats, the President of the United States--who did it and why did they do it. Just tell us and then we'll be done.
But we've come to, sadly, a second mystery and this one is more catastrophic when it comes to the lives of people in this country. As you know, Mr. Speaker, the auto industry is in big trouble, and we are now faced with the bankruptcies of Chrysler and General Motors, Chrysler going first.
In the days leading up to the filing of the bankruptcy for Chrysler, there were a number of events occurring that I want to describe. On April 30 at 11:30, the White House orchestrated a conference call with Members of Congress, Governors, Senators, anybody that was interested in what was going on with Chrysler, and in that conference call they indicated, This is a great day, we're saving 30,000 jobs and everything's going to be okay. I mean, there's going to be some pain but everything's going to be okay.
At noon that day, the President of the United States took to the airwaves and made the announcement that the bankruptcy was the way we were going to go. Over here on the far easel are President Obama's exact words: No one should be confused about what a bankruptcy process means. It will not disrupt the lives of the people who work at Chrysler or live in the communities that depend on it.
And then at 1 o'clock, after the President had his press event, there was a second conference call with Robert Nardelli, who was the chief executive officer at Chrysler, with again the same group of Governors, Members, that were interested in it, and the first question on that conference call came from Governor Granholm, the Democratic Governor of the State of Michigan where my friend Mr. McCotter is from. She was concerned, because the President's announcement said 30,000 jobs had been saved. And while everybody was celebrating that fact, we all knew that there are more than 30,000 people that work for Chrysler in the United States of America.
Governor Granholm said, Well, listen, we congratulate you, we congratulate the President, I think this is really good news, but I hope that the President wasn't speaking in code. The President said that 30,000 jobs had been saved and we know that the number is about 39,000. So was he, you know, sort of just giving good news and we'll find out about the bad news later? Or have really all of the jobs been saved? And will there, in fact, be no plant closures?
Well, in response to that, Mr. Nardelli indicated that, Oh, no, no, no, no, the President was just using a round number. We don't expect plant closures and we don't expect any difficulties.
Now Governor Granholm did what I did. I don't know what my friend the gentleman from Michigan did but I issued a press release praising the administration, praising the auto task force and saying this is wonderful news, because I in fact had--I used to have--a Chrysler stamping plant in my district in a place called Twinsburg, Ohio. So I sent out a notice saying this is really good news. Well, sadly, that afternoon, and it's kind of a famous picture now, but this guy with a cart is taking all these banker boxes into the bankruptcy court up in New York. In that filing and clearly they weren't written between the President's announcement at noon and 3 o'clock when they were filed, located in there is an affidavit from a guy named Robert Manzo, who is one of Chrysler's consultants, and in there they identify eight plants that are going to be shuttered and 9,000 people, mostly United Auto Worker members, that are going to be out of jobs.
Now imagine, if you go with the scenario that I just indicated, that there were some people that were a little surprised. There are two more observations I want to make about that. We serve with a Member by the name of Gwen Moore who is a Democrat from Wisconsin--Milwaukee. During the course of that phone call, she specifically said, Hey, you know what, I have this auto plant in Kenosha, Wisconsin, a Chrysler plant in Kenosha, Wisconsin. I just want to ask you, under this plan, are we going to be okay?
And Mr. Nardelli went on and waxed on about how important the Kenosha plant was and the 800 people that work there, and, yeah, you need to rest easy, it's going to be okay.
Well, sadly, after the bankruptcy documents were filed, Kenosha, Wisconsin's engine plant was on the list of closures. Again, I think Representative Moore had some questions, as did the Governor of Wisconsin, saying, Well, what are you talking about? You told us you weren't going to close Kenosha.
Not to be outdone, Mr. Nardelli sent a letter of apology. He said, I want to begin by expressing my apologies. He goes on to say that in response to Congresswoman Moore's question about Kenosha, I mistakenly conveyed the status of the Kenosha plant with Trenton, Michigan. Trenton, Michigan, doesn't sound like Kenosha, Wisconsin to me. It's not only not a sound-alike, they're in different States for crying out loud.
Mr. Speaker, I would like to put Mr. Nardelli's letter of May 7 into the Record.
Chrysler LLC,
Auburn Hills, MI, May 7, 2009.
Hon. Governor Jim Doyle,
East State Capitol,
Madison, WI.
Dear Governor Doyle: I want to start by expressing my
sincere apologies about the confusion surrounding comments I
made on a conference call with you and other elected
officials about the Kenosha Engine Plant on April 30, 2009.
In response to a question from Congresswoman Moore
regarding the future of the Kenosha Plant, I mistakenly
conveyed the status of the Phoenix investment in Trenton, MI.
The facts I described were accurate for Trenton and not
Kenosha, WI. I recognize this has added further confusion to
an already difficult situation.
I would like to take this opportunity to clarify the
Phoenix Engine Program production status.
In 2006, DaimlerChrysler started a program for a new V6
engine family. Based on industry volumes and forecasted
demand, the initial planning volumes were 1.76 million units.
In order to achieve this level of production, a site
selection process was initiated that included four new
locations in Michigan, Ohio, Wisconsin and Mexico.
Before site selection was finalized, the engine volume
planned for the combined company was reduced when the common
engine
program with Daimler was redefined as a Chrysler only engine.
This reduced the number of production sites to three.
These three sites would have the capability of producing
1.3 million V6 engines. Early in 2007, for a variety of
reasons, the Corporation was required to reduce its capital
investments in all programs which required a new production
strategy for the Phoenix engine. Therefore, Chrysler decided
to reduce the number of greenfield plant locations to two. In
May and June of 2007 the Company chose those two sites and
announced the greenfield investments of $730 million in
Trenton and $570 million in Saltillo and broke ground on the
construction of the facilities. The greenfield decisions were
based on the adjacency of the proposed plants to the point-
of-use assembly locations.
In February of 2007, Chrysler notified the State of
Wisconsin and Kenosha officials that a greenfield site was no
longer viable, but rather that a retool of the existing
Kenosha Engine Plant was under consideration. The Kenosha
retooling plan resulted in necessary capital savings;
however, it required the Kenosha site to continue to produce
its current engines through 2013.
In late 2007 and 2008, deterioration in industry volume
resulted in a drop of the 1.3 million unit demand to 880,000.
This reduction in volume and the need for Kenosha to produce
its current engines resulted in the company deciding to defer
the retooling strategy.
Chrysler kept Kenosha Area Business Alliance updated on the
status of the retool through 2008. As the market began to
collapse through late 2008 and 2009, a decision was made to
idle the Kenosha Engine Plant in December of 2010. This and
other restructuring actions were included in the Chrysler LLC
February 17, 2009 Viability Plan submission to the United
States Treasury and the President's Auto Task Force. The
specific plant actions, including Kenosha Engine Plant, were
not made public because it would have been presumptuous to
assume that the plan was going to be approved and
inappropriate to communicate prior to thorough discussion
with the United Auto Workers union.
On April 3, 2009, Chrysler officials met with the Kenosha
Task Force and reiterated the need to defer the Phoenix
Program. Upon emergence from Chapter 11, plans are to
continue to produce the current engine families through
December of 2010 at the Kenosha Engine Plant in order to
support our current products. The Trenton Engine site has
been completely facilitized and will launch when we exit from
Chapter 11. The Saltillo Engine site has also been
facilitized and is scheduled to launch mid-to-late 2010.
We would have hoped to have been able to convey this
information to you and the community in a more timely
fashion, but circumstances simply did not afford us an
opportunity to do so. It is expected that virtually all
employees associated with Kenosha and the other closures
announced in our Chapter 11 filings will be offered
employment with the new company.
While the company continues to address difficult market
conditions, we expect that the Chrysler Fiat alliance will
ultimately provide customers and dealers a broader
competitive line of fuel-efficient vehicles and technology,
and will result in the preservation of more than 30,000 jobs
in the United States along with thousands of employees at
dealers and suppliers.
Again, please accept my sincere apologies for the
confusion. We will continue to work with the people of
Kenosha to ensure an orderly transition.
Sincerely,
Bob Nardell,
Chairman and CEO.
Then the other thing that occurred is, you may remember, Mr. Speaker, that the UAW, the United Auto Workers, were asked by Chrysler to enter into a new contract--a contract that gave up benefits, gave up wages, gave up off days. But they were told that if they supported this new contract, that was going to lead to a new, vibrant Chrysler where their jobs would be secure. And so they voted on April 28. All the Chrysler workers went to the polls on April 28 to say whether or not they approved or disapproved this new contract. I don't know all of the election results, but I do know in my little community of Twinsburg, Ohio that has 1,200, or did have 1,200 UAW members, 88 percent of their members voted for it, voted to give up benefits, give up wages, as long as it helped the company that they worked for survive.
So they voted for it, the thing passed, and then the next day they find out that they're out of a job. Mr. Doug Rice, who's the president of UAW Local 122 which covers Twinsburg, indicated that, his quote was, ``I don't know if I was told the whole truth on everything. I don't feel like I was. It would be a shame if this was something that was known for some time. If they kept this back from people, that's wrong. That's wrong.''
He was then asked, What do you think would have happened if you had known that you were going to be out of a job by approving this contract? He said, ``Needless to say, people ain't going to vote to eliminate their jobs.''
And I think that's right. I don't think any of these 9,000 people who worked at the eight plants would have said, hey, let's approve this new contract and vote ourselves out of a job.
I would like to put Mr. Rice's quotes from the Cleveland Plain Dealer on May 1 into the Record, Mr. Speaker.
``I don't know if I was told the whole truth on
everything,'' said Doug Rice, president of United Auto
Workers Local 122. ``I don't feel like I was. It would be a
shame if this was something that was known for some time. If
they kept this back from people, that's wrong. That's
wrong.''--PD May 1
Host: Would that vote have been the same had you had the
information you have now?
``No. Needless to say, people ain't going to vote to
eliminate their jobs,'' said Doug Rice, President of UAW
Local 122 in Twinsburg--WCPN (Public Radio, Sound of Ideas),
May 5, 2009
And then the mayor of Twinsburg, Ohio, and, Mr. Speaker, if you haven't been to Twinsburg, I will tell you, you may want to come this summer, or any summer. Twinsburg is famous for its Twins Festival and twins from cradle to very elderly twins show up. Last year I think we had 4,000 sets of twins. If you think you're seeing double, you will see double in Twinsburg during their Twins Festival.
Their mayor wrote to Mr. Bloom, Ron Bloom, who is on the President's automobile task force and basically said, What happened? She was on the call, she heard that everything was going to be okay and now all of a sudden she finds that a Chrysler plant that provides 13 percent of her city's tax base is going to be closed and 1,200 people are going to be out of work.
Basically she said, Look, I watched the President. I was on these telephone calls. What happened?
Mr. Bloom, in a letter dated May 6, writes back that what the President's comments were meant to convey, they meant to convey the message that the bankruptcy of Chrysler had in no way changed these plans.
I would like to put this into the Record as well.
May 6, 2009.
Dear Mayor Procop: Thank you for the note. Hopefully I can
clarify the situation at hand regarding the Twinsburg Plant.
On February 17th, Chrysler developed a viability plan which
proposed several plant closures, including a closure of the
Twinsburg Stamping Plant. The decision to close the Twinsburg
Plant was not in any way driven or influenced by the U.S.
Government. It was identified based on an assessment by
Chrysler's management of what was necessary to reduce
Chrysler's manufacturing capacity in the face of extremely
poor market conditions.
While the original 2/17 plan submitted by Chrysler was not
deemed viable by the Task Force, the more recently proposed
Fiat/Chrysler alliance plan has been approved. This plan
included the same plant closure schedule as the one
originally proposed by Chrysler, and the President's comments
were meant to convey the message that the bankruptcy of
Chrysler had in no way changed these plans.
We realize how unfortunate this situation is, especially
for the citizens of Twinsburg whose livelihoods are tied so
directly to the Chrysler plant. The current economic
environment has forced many communities to make sacrifices
that seem unequal and unfair, and the Task Force is working
actively to mitigate the impacts of these sacrifices. During
his viability determination on March 30, the President
announced Dr. Ed Montgomery, former Deputy Labor Secretary as
Director of Recovery for Auto Communities. Since his
announcement Ed has been going into communities and hearing
people's concerns and he has been assembling an interagency
effort to support communities and workers and promote new
job-creating initiatives.
Ed's role is to work with the communities that have been
negatively affected, my role is to work with Chrysler and GM
in their efforts to restructure, so that we can once again
see a strong and competitive domestic auto industry.
Sincerely,
Ron Bloom.
What these plans are that they're talking about is, both car companies, Chrysler and GM, filed viability plans with the task force in February. February 17, I believe. They were both rejected. But somewhere in conversations between the auto task force and Chrysler, it was indicated that there were going to have to be some plant closures. But nobody told anybody. There was no public document, no public discussion, no notification to the United Auto Workers--at least at the local level--that plants were going to be closed. That was the response from Mr. Bloom.
I yield to the gentleman for his thoughts.
I thank the gentleman.
That leads to the next point. Because Mr. Bloom from the President's task force testified yesterday, or the day before, in the United States Senate. But first let me finish this point.
Going back to the plant closures, what is now on that far easel, that's a paragraph that was in the UAW contract that people were asked to approve, and it specifically was bargained for by the people in my district in Twinsburg. This paragraph certainly doesn't tell them that their plant's going to close the next day, but it indicates that Chrysler's going to bring more work to the stamping plant.
So when my folks went to vote, they voted not thinking they were going to be out of work, they thought that more work was going to be coming via the agreement with Chrysler.
What the gentleman is now referring to is in addition to the 9,000 people put out of work and the eight Chrysler plants and, on top of that, I think it's 14 General Motors plants, we have now been told. For some reason in this bankruptcy, somebody has come up with a brainy idea that you can have better car companies if you don't have any auto dealers. And so the initial request in the bankruptcy was that Chrysler close 789 car dealerships in its network. We now know that General Motors is going to close about 2,600 of theirs. According to the National Automobile Dealers Association, about 60 people work at every car dealership. If you take the combined closings of car dealerships at Chrysler and General Motors, it's north of 200,000 people are going to be thrown out of work that work at these dealerships.
What my friend Mr. McCotter was referring to is that when you question the administration, and again not the President. I want to be crystal clear about this. When President Obama said on April 30, this statement, that nobody's going to be negatively impacted, no communities are going to be negatively impacted, I believe he meant it and I believe he believed it to be so.
I don't think, however, that his automobile task force has served him well. By that I mean, Mr. Bloom testified yesterday, or the day before, in the United States Senate and Senator Hutchison of the State of Texas said, Hey, I don't understand a couple of things. First of all, it's a strange business model that you can sell more stuff with less stores. I never learned that in Econ 101 or anywhere else while I was in school.
But we don't think that car dealers cost the car companies any money.
But this issue has come up. Who said that all these car dealers costing 200,000 people to lose their jobs needed to be closed? And the gentleman's point is this: When Chrysler and GM submitted their studies about how they wanted to proceed, they had a plan, an orderly closeout of dealerships and consolidations, and they were told they weren't aggressive enough.
Specifically, Mr. Bloom testified over in the Senate that when they rejected the plans, he said, I think we said that General Motors is burdened by excess capacity. We said that their plant footprint, the manufacturing plants, has excess capacity, their dealer network has excess capacity, and the white and blue collar people that work there need to be downsized, and we told General Motors and Chrysler when we rejected their February 17 plan, you need to go back and you need to take a more aggressive approach. And, yes, that included dealers, but it included plants and a white collar head count.
So, it is parsing of words to say, and I have never said and I don't think my friend from Michigan has ever said, that Mr. Bloom said you have to close the dealership in Milwaukee, Wisconsin. They didn't do that. But they did determine the parameters and they did indicate that you had to get down to a certain size, which then led to and will lead to 200,000 people being out of work.
I yield to my friend.
I thank the gentleman. And just to continue talking about the dealers and the 200,000 people, and you know what? It is more than 200,000 people, because I assume most of them have families, husbands, wives, children, grandchildren, whatever the case may be.
The other interesting thing about car dealers, at least in my part of the world in Ohio, if you go to one of your children's Little League games or soccer games, you always see that it is a car dealer that has sponsored the team. The car dealer sponsors the chamber of commerce. The car dealer gives to charity. The car dealer does the food drive. So you are talking about not only displacing 200,000 people; you are talking about ripping the heart out of a number of communities.
You could understand it if these dealerships were somehow a drain on Chrysler and GM. But on June 3, Amy Brown, who is a lawyer for the affected Chrysler dealers, had the opportunity to cross-examine the aforementioned Mr. Nardelli, who was the chief executive officer of Chrysler, and was asked why it was necessary to eliminate the franchises when neither the government nor Fiat, the group that is buying Chrysler out of bankruptcy, asked for it to happen.
Mr. Nardelli said the 789 dealers represent a host of expenses. But then he was asked to quantify how much those things cost the automaker, and Mr. Nardelli said he couldn't, and he wasn't sure if his company had ever determined those exact costs.
At a hearing last week up in bankruptcy court they had a number of dealers in, and there are a number of dealers here on Capitol Hill testifying in front of the Energy and Commerce Committee. But just three quotes from car dealers who testified up in New York in the bankruptcy court.
Leo Jerome, who owns a car dealership in Lansing: ``I just want my day in court and give me a fair hearing. After I had a 10-month supply of cars, they gave me three weeks to sell them all. I think the White House Mafia is trying to run this thing through.''
Tony Manicotti, who has a car dealership in Sterling Heights, Michigan, said, ``They've ripped our heart and soul out. It's been part of me since I was a child. It's hard to believe what the government has done. They are supposed to save employment--not create unemployment.''
And an Orleans Dodge Chrysler Jeep dealer, Mike Comiskey, who was responding to a question by the bankruptcy judge, Judge Gonzalez, his dealership had been ruined by Hurricane Katrina but he reopened it 5 months later. During the course of Hurricane Katrina, he provided fleet vehicles to police departments and fire stations in every parish of Louisiana that was affected by the hurricane, and also provided vehicles for the State of Louisiana and the City of New Orleans.
Mr. Comiskey says, ``I will probably end up living out of my car as a result of this set of decisions.''
Now, it brings me to I think where the gentleman was going, and that is the Clue travel edition: Who is this task force and who made the decision to close eight Chrysler plants without telling the workers that it was going to happen, throwing 9,000 people out of work? Who made the decision to be more aggressive and throw 200,000 people out of work that work for auto dealers?
Now, before I talk about the Auto Task Force qualifications and where we are going to go with the game of Clue, I have to tell you I have mentioned Mr. Manzo, who is the Chrysler restructuring expert, and you may recall, Mr. Speaker, there was some discussion about bondholders. God forbid someone could take some of their money and invest it in a company in this country and be told that they were secured creditors.
The secured creditors at Chrysler had invested money. And you know what? They have since been characterized as ``unpatriotic'' or ``not wanting to go with the flow.''
But the one group that was most prominent in this is the Indiana State Teachers Pension Fund. So the Indiana State Teachers Pension Fund thought that buying Chrysler stock was a good investment and they couldn't lose, because as bondholders they were first in line should something like a bad bankruptcy happen. Well, we have rewritten the 200 years of bankruptcy law, and it doesn't matter if you are a secured creditor or not.
But Mr. Manzo called Matthew Feldman, who is an attorney for the President's Auto Task Force, on the day before this announcement was made, and he basically said, Hey, I think I have a way that we can avoid the bankruptcy of Chrysler and restructure some of this debt and work with the bondholders.
Sadly, this is from an email submitted in the bankruptcy court up in New York. Mr. Feldman's first response by email, not real grownup, it says: ``I'm not now talking to you. You went where you shouldn't.''
Well, Mr. Manzo apologizes in a subsequent email, and it comes back, ``It's over. The President doesn't negotiate second rounds. We have given and lent billions of dollars so your team could manage this properly. And now you're telling me to bend over to a terrorist like Lauria?'' Mr. Lauria is the lawyer that represents the Indiana teachers' pension fund. ``That's BS.''
Of course, the next day we have the bankruptcy.
But you say, you know, maybe this task force of the President's, which I believe is not serving the President well, is made up of people who are really knowledgeable in business, in the car industry, in the car dealership industry, and so we should probably defer, because I don't happen to be any of those things. So maybe we should defer to their judgment in this matter.
The gentleman has a thought he would like to share?
I thank the gentleman, and that is where we were going to go next. There was a hearing here on Capitol Hill about 3 weeks ago in the Judiciary Committee and the witnesses were asked by a colleague of ours who joined us the last time we did this, Mr. Jordan of Ohio, Do any of these individuals on the Auto Task Force have any expertise in how car manufacturing or car dealership businesses operate? The witness indicated the answer is none; they have no experience. He went on to say that The Wall Street Journal actually did a survey of the members of the Auto Task Force and discovered that a substantial portion of them don't even own cars.
Now, I want to be fair, because I think that witness was talking without all of the facts. But there is an article that appeared in the Detroit News, close to the gentleman's home, on February 23, and that is not quite right. Of the 10 senior policy aides who work on the President's task force, two own American cars and the rest either own no cars or they own cars manufactured in other countries, foreign cars.
Does the gentleman have a thought on that?
I thank the gentleman very much. Mr. Speaker, could I inquire as to how much time is left?
I want to finish Clue the travel edition and get to something I talked about at the beginning of the hour. But just to finish it, again, the game of Clue, manufactured by Hasbro, we know that the weapon, in this case, not the pen, but the ax, an ax has been used to get about 210,000 people, make them unemployed in this country. And again, we have the same rooms. It happened in one of these rooms. And around the board, down there is Mr. Nardelli, the former chief executive officer of Chrysler, Larry Summers, senior adviser on the economy to the President, President Obama, of course. Over here is Ron Bloom, who I've talked about. Here is Mr. Geithner, who is the Secretary of the Treasury, and here is former President Bush. So this group forms our new Clue travel edition. And as we move forward, I think, again, it is important that the American public know who made the call to force these car companies into bankruptcy; who made the call to lie to 9,000 auto workers at 8 plants across the country, and who made the call that, even though they don't cost anybody any money, that we have to close all these dealerships and put people out of work.
And I keep hearing, and the gentleman has heard it too, that this task force doesn't want to run the day-to-day operations of Chrysler and GM. But sadly, for them, there is an article that appeared on May 11 out of Detroit that indicated that Chrysler wanted to spend $134 million in advertising during the period of its bankruptcy, and this unelected task force told them they couldn't spend any money on advertising. Now, they finally relented and said okay, you can spend half of it. But for a bunch of folks that are claiming they don't want to run the car company, they've now set up the situation where they didn't want them to advertise and they didn't want them to have as many stores as they used to have to sell their cars. Again, that's a strange, strange business model.
So we will be back, Mr. Speaker, as we move forward during the course of these discussions, to try and figure out who did it and what room it happened in and why they did it.
I want to move now to the observation that I made at the beginning of the hour. At the beginning of the hour I talked about the AIG bonuses and the fact that legislation that was approved in a bipartisan fashion, 64-0, has not been brought to the House floor by the distinguished majority leader for discussion and debate. And we keep hearing how busy we are here, and we heard that last year. And my colleagues will remember last year, when gasoline was going through the roof and our phones were ringing off the hook and people said, Hey, can you give us a national energy policy, for crying out loud? We're dying. We can't afford to put gas in our car and drive to work. We were told as well that we were too busy. And I get that. This is the most deliberative body in the world. We have a lot of important work to do. And if the majority truly feels we were too busy to deal with the national energy policy, I would have taken them at their word. But sadly, here is a chart, and then we'll go to the second chart.
When the new majority became the majority, we Republicans did such a bang-up job that the voters threw us out and they installed the Democrats as the majority party beginning on January 29 of 2007. At the time the retail price of gas in the country was $2.22. And on that day the most important thing that they could come up with to debate on the floor was to commend the University of California Santa Barbara soccer team. I like soccer. I congratulate them. And gas isn't so bad--$2.22.
It goes up to $2.84, and the most important thing that the majority can schedule to be on the floor is to declare October National Passport Month. A lot of my constituents didn't know what National Passport Month, what month it occurred in. Now they know.
Gas goes up to $3.03 a gallon. We're not debating the price of gas or a national energy policy. We're commending the Houston Dynamo soccer team.
Now, those of us in public life are told that you don't get elected unless you get the soccer moms. So I guess, you know, while gas is going up to $3.03, we've got the soccer moms; we're all squared away.
Gas goes up to $3.77. The most important thing the majority can put on the floor is declaring National Train Day.
It's getting serious--$3.84. A lot of people are calling me saying, Hey, what are you doing? We passed Great Cats and Rare Canids Day. And I have to tell you, I didn't even know what a rare canid was, but I Googled it, and it's a dog. So when my constituents were paying $3.84 cents a gallon, we were doing cats and dogs here in the United States Congress.
It goes over $4, and you think, man, we're going to get to the bottom of it now. But the majority determined that the most important thing we could do on that day was declare the International 2008--a lot of my constituents didn't know this either--2008 was the International Year of Sanitation.
Gas crested at $4.14 a gallon in my part of the world on June 17 of 2008. Surely we're going to talk about energy; surely we're going to talk about gas. No, we were too busy. We had to pass the Monkey Safety Act on that particular day.
So we thought maybe folks had learned as a result of that because, clearly, when gas has gone up to that price, the Monkey Safety Act isn't the foremost thing on my constituents' minds.
So we come to this year. And this year, as we've talked about during this hour, there are a lot of people at Chrysler losing their jobs. So at the beginning of this Congress, January, 4,000 people at Chrysler are losing their jobs. And you'd think that we'd have a discussion here. I would think. But we're too busy because on that day we needed to honor the life of Claiborne Pell, who was a former Senator. He deserves to be honored. But why are we taking floor time to do that when 4,000 people are out of work just at Chrysler.
It goes up to 9,500. The most important thing that we can do on that day is to support the goals and ideals of national teen dating, an issue that we're all concerned about certainly, but now we have 9,500 Chrysler workers out of work.
It goes up to just shy of 10,000 and, son of a gun, we have to, we've got time to come back, this year, and pass the Monkey Safety Act again. And I want to be clear. I don't want anyone to read my words in the Congressional Record and think that I want monkeys who aren't safe. I want safe monkeys. But when you've got 10,000 people out of work at Chrysler, maybe we could do something other than save monkeys.
And son of a gun, and now you're up to 13,000 people, and I guess the Senate didn't pass the cat and dog legislation, so we have to consider that again.
Sixteen thousand people are out of work; the most important thing they can schedule on the floor is honoring Arnold Palmer. I like Arnold Palmer, Latrobe, Pennsylvania, great golfer, deserves to be honored. But how about dealing with the people that are losing their jobs and their livelihoods at Chrysler, General Motors, and the people at the auto dealers?
And then it sort of peaks with the announcement, 18,365 people, just at Chrysler, out of work. And again, all we can do is National Train Day.
Now, I want to be fair to the majority because we do do other stuff here. And I don't want anybody to believe that all we do is monkeys and cats and dogs. Just since the beginning of this year, when Chrysler and General Motors are going belly up and bankrupt, we have also named, and I have to add to this list because we did a couple this week, we've named post offices. And so these 16 post offices, we took an hour of debate here in the House of Representatives, 16 hours, to make sure that--and if anybody, Mr. Speaker, who happens to see this list, they live in these towns, they should feel assured that they can now go in and buy those 44 cent stamps because the United States Congress has named their post office.
And again, it's an important part of what we do here, honoring people who deserve to be honored. But 16 hours, when we could have been talking about Chrysler, when we could have been talking about General Motors, when we could have been talking about the dealers, instead we were naming post offices. And I don't think that the country is better off for that enterprise.
But then again, to be fair, let's say that you're in the majority and that you didn't see this coming and that perhaps, you know, you didn't recognize it was going to be as serious as it was.
We came back last week and went back into session last week. Surely, over the Memorial Day recess, people got an earful from their constituents, saying, What are you going to do about these car companies? What are you going to do about the dealerships? Yet, when we came back last week, you know, maybe we weren't quite ready. Maybe we hadn't formalized how to get at the problem. We passed bills directing fish stocking in the lakes of Washington; we recognized the 75th anniversary of the Great Smoky Mountains; and we shifted from soccer to basketball, and we honored the University of Tennessee Women's Basketball Team.
Then you say, okay, that was the first week back. Everybody is a little sleepy. We haven't quite gotten up to speed with our legislative agenda. This week, rather than dealing with Chrysler, rather than asking some questions of the unelected task force appointed by the President and that doesn't own cars, we recognized that this was National Physical Education and Sport Week.
Also, I didn't know this, but maybe my colleagues know this--and I apologize for being ignorant. June 10 is National Pipeline Safety Day, and we spent an hour of time here on the floor making sure that everybody understood that June 10 is National Pipeline Safety Day.
Mr. Speaker, this is a big problem. I mean we have a double delegation here. The Congress has punted to the President. The President has punted to this task force of people who don't own American cars, the majority of them, or they don't own any cars, and they have no experience in the car business. They are making decisions that affect hundreds of thousands of Americans.
Mr. McCotter talked about the letter that we sent to the President. Thirty-six of us sent a letter to the President, saying, Mr. President, please pull these people back. Let's have a dialogue. Let's bring the best and the brightest.
You know, Mr. McCotter talked about Chrysler. We made $35 million on the Chrysler deal in 1979. The only problem was nobody expected it, and Congress didn't know how to spend the money. Now, people need to rest easy. We figured it out, but nobody knew how to spend that money. Let's talk about it, and let's do this the right way. Let's not have this unelected group of people who have no experience run roughshod over the American worker.
I yield to the gentleman.
I give you 30 seconds.
I thank the gentleman. I thank the Chair.
I yield back.