Sanders blames hedge funds for closed GM plant
WARREN — General Motors said it would be too costly to invest $100 million in the Lordstown plant, but chose to give $25 billion in stock buybacks at the urging of hedge fund managers, padding the pockets of the already rich and whisking away well-paying jobs people depended on, said Vermont Sen. Bernie Sanders at Lordstown High School.
Sanders promised if he were elected president, government contracts won’t be awarded to companies that send jobs out of the country for cheap labor, closing down plants, while benefiting from corporate tax breaks and government bailouts, only to turn their back on the workers that made them a success by folding to hedge fund managers. GM was given $700 million in government contracts under the Trump Administration, Sanders said.
“What we have to decide, whether in our democracy, we are going to allow a handful of billionaires on Wall Street to close down profitable plants like the one here in Lordstown. Whether we are going to allow them to go to Washington and ascertain incredible tax breaks for the 1 percent and then fight to cut social security, Medicare and Medicaid. Whether they are going to dictate trade policies in America, so that profitable corporations will destroy the lives of American workers while they go abroad and pay people $2 an hour to do the work that used to be done in America,” Sanders said.
GM was pressured by hedge fund managers to hand profits over to shareholders, rather than investing in American production plants and jobs, Sanders said.
“Our job now is to tell them, whether they like it or not, they will be good corporate citizens,” Sanders said. “If entities like General Motors think that they can throw workers out on the street while they are making billions in profit, and they move to Mexico and pay people there starvation wages and then line up to get federal government contracts, well they got another (thing) coming, that ain’t going to happen.”
GM is expected to save billions from the plant closures and massive layoffs, less than a quarter of the money that they’ve “eagerly given away to their billionaire shareholders and friends on Wall Street,” according to the United Auto Workers.
“We need to stand together and call this decision what it truly is: an immoral cash handout to wealthy corporations and billionaire investors at the expense of America’s hardest-working families. We, the taxpayers and auto workers, have invested in GM, now it’s time for them to invest in us,” the UAW stated in a news release previously.
Randi Weingarten, president of the American Federation of Teachers, said Sanders believes in an economy that works for all people, not just the rich. She said his policies could bring back the American middle class, “with gusto.”
The teachers union cares about the governmental policies Sanders is pushing because teachers, their students, their families and their communities can be positively or negatively impacted by those policies. The loss of plants like GM creates stress on communities and worsens poverty, she said.
Sanders’ campaign distributed a report researched by Charles Kahn of Hedge Clippers and developed in a partnership with the AFT union, titled “Hedge Papers No. 66: Hedge funds attack General Motors and American Jobs.”
Kahn said hedge fund leaders mounted a campaign aimed at the company to hand over profits in the form of stock buybacks – which were at one time illegal — as soon as the company came out from the terms of the taxpayer funded government bailout in 2013.
“Hedge fund investors repeatedly mounted pressure campaigns to prevent GM from reinvesting their profits anywhere but back into their own share price.
“Through paid agents, harassing proxy measures and public threats, the hedge funds extracted billions in buybacks,” the report states. “Hedge fund attacks hurt the corporations and communities they’re targeting, and even many of the pensioners and workers who provide the cash for the hedge funds.”
The company claimed in statements released when it announced plans to idle five plants, that the company was moving away from smaller cars and investing more into researching new technologies for their vehicles.
Sanders was often met with long periods of applause and shouts of “Bernie, Bernie!” But some were there to protest, including one man wearing a “Make America Great Again” hat who disrupted the event by calling Sanders a socialist before being escorted out.
Many media outlets sent reporters, including the New York Times and the New Yorker, and a team from conspiracy outlet Alex Jones’ Infowars, which asked those leaving the auditorium if they “felt the ‘Bern'” and then pounced on them with questions about Sanders “selling out” to the Democratic Party after he lost the 2016 presidential primary to Hillary Clinton.
Mallory Martin of Fowler said she hopes to volunteer for the Sanders campaign.
“He has a message that is full of hope. It centers on love, not hate. And he has a plan of action — it isn’t just lofty ideas,” Martin said.
“So many of the political candidates try to divide people with their messages, he is trying to unite everyone.”
Sanders challenged President Donald Trump to tackle Wall Street himself, to push for policies that allow wealth to spread among all people, not just a select few.
“Let’s see how tough you are. Tell General Motors today no more federal contracts,” Sanders said. “Mr. president, I know how tough you are snatching babies from the arms of their mothers, let’s see how tough you are taking on Wall Street and corporate America.”
Sanders spoke to students and teachers before he took the stage. He told high school students in a group for those interested in history and the political system he is thankful they are focused on learning about democracy.
Democracy is a “radical idea” that could be lost if young people don’t understand it and nurture it, Sanders said, and he challenged the students to challenge the ideas of their parents, teachers and peers to keep democracy vibrant.
Hannah Boyle, 17, will be able to vote for the first time next year and she started researching candidates in January. She hasn’t settled on one.
She said universal health care is important to her, as is a candidate that can beat Trump.
“His tone takes a toll on our society. It is a step backwards,” Boyle said.
Mandi Merritt, communications director with the Republican National Committee, released a statement before the rally. Sanders’ policies would be a “disaster” for jobs and workers.
Sanders is registered as a Democrat to run in Democratic primary, but serves as an independent in the Senate.