General Motors has been very benevolent since receiving $50 billion of taxpayer funds less than two years ago. GM, the GM Foundation and Chevrolet are donating more than $10 million towards the building of a Martin Luther King, Jr. monument in Washington, DC. Following is a list of just some of GM and GM Foundation recent giveaways.
- $40 million for “clean energy projects.”
- $4.5 million for college scholarship programs to benefit students; criteria list includes being female, being a minority or being a military member.
- $27.1 million to United Way for restructuring of Detroit schools.
- $1 million to Haiti earthquake relief.
- $70,000 to the United Negro College Fund
- $2 million to Detroit for community recreation centers near Chevy Volt manufacturing plant.
- $41,000 to groups associated with lawmakers with a $36,000 majority going to the Congressional Black Caucus Foundation.
The GM Foundation is legally separate from the company, but is fully funded by GM. If the GM Foundation has to make philanthropic distributions, there may be better causes, such as assistance to GM bondholders suffering hardship after having their rights sacrificed for the benefit of the United Auto Workers.
Perhaps most controversial is GM’s return to political contributions. There has been much debate on whether or not a corporation that is partly owned by the US Government should be allowed to contribute to political campaigns. In GM’s case, money was donated to both Republicans and Democrats with the majority going to Democratic candidates in last year’s elections.
Corporate benevolence is to be lauded when displayed by companies that are owned by the private sector. General Motors, however, has a primary responsibility to taxpayers and investors and should focus on a return to profitability and repayment of taxpayer bailout money. It is also worthwhile to note that while GM targets certain favored groups for its contributions, taxpayers are getting hurt in other areas such as lost tax revenue from GM due to the $45 billion tax credit it was granted by the Obama Administration.
In addition, while New GM is boasting of its role as corporate do-gooder, Old GM (Motors Liquidation Company) has stopped paying property taxes in areas like Pontiac, MI contributing to the city’s receiving a recent downgrade of its obligations by the credit rating agency, Fitch. This while continuing to pay millions of dollars to its management firm, Alix Partners. In summary, donations by GM to political parties and favored groups should be limited until such time that the Treasury Dept. has divested all of its taxpayer funded stake in GM.