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Craig Regester Headshot

GM: Too Big to Bail (Out Detroit)?

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GENERAL MOTORS
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If you've been listening to Detroit Mayor Dave Bing or the Detroit City Council these past two weeks, we face two choices to fix our city's fiscal emergency:

  1. force thousands of city workers to agree to yet more wage and benefits cuts and then lay-off 1,000 of them anyway (Bing's plan), or;
  2. layoff up to 2,300 city workers and force those who remain -- in their next contract -- to agree to yet more wage and benefits cuts (City Council's Plan).

So there you have it: either balance the budget on the backs of Detroit's everyday workers, or balance the budget on the backs of... wait a second!

It's common these days to hear that the City of Detroit's public workforce has not shrunk commensurate with the city's overall population decline. But did you know how many workers the city of Detroit employed in the early 1950s back when our city population was about 1.8 million? About 29,000. Today, in a city with around 714,000, the City employs a little under 12,000.

So, back in the early 1950s, Detroit employed one city worker for every 62 residents. Today, the city employs one city worker for every 60 residents. Hmmm, that hardly seems outrageous to me.

In considering how to solve Detroit's current fiscal challenge, maybe need to shift our attention away from Detroit's everyday worker, and focus on, what are they called again... oh yeah, the 1%!

Here's a thought: Where's General Motors now that we need them? Remember them: that quaint little auto start-up, ahem, I mean that once largest corporation in the world!!!! That's right, the one whose big corporate butt we wiped over two years ago with $50 billion of our money!!! (We still own 26.5% of the company as of this writing.)

Ok, so here's some simple math facts for you (go ahead, Google them):
• Detroit's projected budget deficit this fiscal year is $150 million.
• In the second quarter of this year, GM reported profits of over $2.5 BILLION!
• In the third quarter of this year, GM reported profits of over $1.7 BILLION!
• Oh yeah, and according to the known radical, leftist-socialist newspaper, The Wall Street Journal, GM likely won't have to pay $45.4 billion in taxes (OUR MONEY!) on future profits based on hidden terms in our bailout.

One more important detail: two years ago, back in November 2009 when GM was teetering on bankruptcy and flirting with fleeing Detroit to relocate thousands of workers to Warren, then-Governor Granholm struck a deal with the company that gave it essentially $200 million in state tax breaks as long as it agreed to keep at least 2500 of its employees on the payroll working in the Ren Cen. And the city of Detroit (as well as the DEGC and the Downtown Development Authority) threw in another $21 million to sweeten the deal.

Ok, so a little more math here, let's see here:

General Motors: $2.5 billion + $1.7 Billion + $45.4 Billion (in projected future tax savings) + $221 million in state/city tax breaks = nearly $50 billion!

City of Detroit: $150 million (current fiscal year deficit) + $1 billion (just to be safe, to cover the next 5-7 years) = $1.15 billion

So, if GM donated just a little more than 2% of ONLY two quarters of this year's profits PLUS their projected tax breaks in the future, then the City of Detroit's fiscal problems would effectively vanish! (And just think of all the great free advertising GM would get from bailing out Detroit. Everyone would want to buy a Chevy Volt even with their exploding engines!)

So, you tell me: Is General Motors too big to bail out the city of Detroit? 

Don't they owe us by now? Not just for what the U.S. taxpayers provided them in their greatest moment of need only two+ years ago, but how about for the near century of grueling wage labor Detroit's workers provided to make GM one of the largest and most profitable companies in the history of this planet?

Now, as much as it may seem otherwise, I'm not a complete GM-basher. While I don't love or buy their cars, the corporation has clearly been an engaged citizen of Detroit, at least in recent memory. Have you been to the revitalized Detroit Riverfront recently? You can thank GM (largely) for that truly wonderful addition to downtown (I'm being serious now). They contributed $135 million back in 2003 to establish the Detroit Riverfront Conservancy -- and look how far it has come in only eight years. I enjoy the revitalized Detroit Riverfront as much as anyone. And my kids surely love dodging those crazy water-projectiles that shoot up all over the place, and the beautiful carousel, and the massive world map.

But today, the city of Detroit needs more than corporate philanthropy, it needs cold hard cash -- and General Motors, once again, seems to have lots of it! So where's ours? Let's quit trying to scapegoat everyday workers (not just the city of Detroit's and GM's, but everyone's) whose real wages nationally, after inflation, have been stagnant since 1973. (Don't believe me? Then, Google it!) And let's build a campaign to get our money back -- first from General Motors and then from all of the other major corporations in and around Detroit that have received our welfare while we enabled them to rake in their fat profits.

Perhaps it's time to Occupy General Motors? At least it's heated. And last I checked, there was plenty of room for my tent to fit in the lobby of the Ren Cen. Just don't put mine next to the Volt.