General Motors had a great year last year—making a record profit and reclaiming its crown as the world’s biggest automaker—but some lawmakers aren’t happy about its plans to reward its workers. The company plans to pay bonuses of at least $182 million to white-collar workers today, on top of $332.5 million in profit-sharing it’s paying factory workers, reports AP…Some Republicans believe the government should get back the money it spent to save GM before anybody gets a bonus.
Gary Reber Comments: The government bought an ownership position in GM representing a quarter of the company’s ownership. This was not a loan or loan guarantee, thus would not be a first-position recoupment position. Rather than profit-sharing without employee ownership, the government should have required broadened ownership of the productive capital assets of GM among the employees, who would pay back their acquisition of ownership in GM out of the earnings of the investment.
While GM received financial support from the government, the structure of the support should have been to provide an insured loan as restructuring and investment capital. GM certainly qualifies as a major company within a major industry with long-term productivity growth potential with the resulting benefit of promoting the diffusion of advanced technology into civilian industries. The loan would have been used to modernize and build new superautomated and computerized robotic assemblies. Where necessary the monies would be used for supplemental retraining of labor workers to qualify them for the new jobs created. Most important, the profits from the investments would be fully paid out to new capitalists owners––the corporate employees. This should be a condition to receive the capital investment loans. The goal would be to create new capitalist owners simultaneously with the growth of the economy financed with government loan support. The profits would represent wealth created by public capital invested in GM. The desired result would be to decrease, rather than increase, the existing concentration of productive capital ownership and thus economic power in the hands of a minority. The credit mechanisms supported by the government would not involve the expenditure of any tax money and would support profit-making operations for the primary purpose of earning dividends for GM’s stockholders, including the newly created capitalist owners. Businesses supported by such credit mechanisms would have a profit motive and operate with the requirement for efficiency imposed by a market economy. The goal would be to broaden the ownership of private corporations so as to make the interests of private industry more synonymous with the public interest and vice versa––while broadening private enterprise capitalism to include everyone in the society. Such policies and programs aimed at broadening productive capital ownership would foster extensive utilization of the most modern and efficient technological innovations and result in the revitalization of American free-enterprise capitalism mirrored in a strong growth-projected economy.