Tester asks GM to share information about foreign suppliers
Senator says taxpayers have right to know details about overseas palladium contracts
(WASHINGTON, D.C.) – Senator Jon Tester has asked General Motors to fill in some missing information about the automaker’s decision to support jobs in South Africa and Russia over American jobs.
GM this summer cancelled its contract with Montana’s Stillwater Mining Company—America’s only producer of palladium, choosing instead to purchase the metal overseas. GM uses palladium to build catalytic converters, which filter pollution from vehicle exhaust.
Tester and Senator Max Baucus immediately responded to GM’s decision by demanding the company support American jobs, especially because the company cited the need to protect domestic suppliers and American jobs as one of its reasons for needing a $50 billion bailout from American taxpayers.
“This decision has raised several questions which I hope you will answer as quickly as you utilized the bankruptcy proceedings to negate a contract with a domestic supplier,” Tester today wrote to GM CEO Fritz Henderson.
Tester asked GM exactly how much the company pays per ounce of palladium from mines in South Africa and Russia. That information has never been made public, stifling competition from companies like Stillwater.
Because 60 percent of GM is now owned by American taxpayers, Tester believes they have a right to know about the company’s palladium contracts.
Tester today also asked GM:
- Which foreign palladium companies are doing business with GM?
- Is GM paying market rate for palladium and if so, what is that rate?
- How much money does GM anticipate saving annually from purchasing palladium from sources other than Stillwater Mining Company?
- Will choosing to contract with a foreign supplier have a real effect on the anticipated timetable for GM’s ability to repay the Treasury Department its outstanding loans?
Tester, who voted against the taxpayer-funded bailout of the automakers, said he looks forward to prompt answers from GM because he plans to address the situation during a Senate Banking Committee hearing scheduled for Thursday.
More than 600 Montanans have submitted comments to GM through a special website created by Tester, tester.senate.gov/stillwater. Tester plans to deliver the comments he receives to GM and to the newly created White House Auto Task Force.
Tester visited the Stillwater Mining Company twice in August. His letter to GM appears below.
Mr. Frederick (Fritz) A. Henderson
President and Chief Executive Officer
General Motors Corp.
P.O. Box 33170
Detroit, MI 48232-5170
Dear Mr. Henderson:
As you know, I—along with the people of Montana, whom I represent—have been absolutely baffled by GM’s decision to utilize the bankruptcy proceedings to sever its relationship with Stillwater Mining Company, the only palladium/platinum producer in the United States.
After accepting billions of taxpayer bailout dollars, GM nullified its Palladium and Rhodium Supply Agreement with Stillwater Mining Company, choosing instead to support jobs in Russia and South Africa over a company that employs more than 1,300 hard-working Americans—many of whom had been some of your best customers.
In response to correspondence on this issue from Senator Max Baucus (MT) and me earlier this summer, Robert E. Socia, Vice President, Global Purchasing and Supply Chain, sent me a letter dated July 24 stating, “The best way to repay taxpayers is to run the business as efficiently and cost-effectively as possible. Uncompetitive supplier agreements do not support this priority.” He also stated that “GM will procure over half of our North American palladium requirements from U.S. sources, and not foreign sources as mentioned in your letter.”
This decision has raised several questions which I hope you will answer as quickly as you utilized the bankruptcy proceedings to negate a contract with a domestic supplier:
- With which foreign firms is GM contracting for its palladium and rhodium needs?
- Exactly how much is GM paying for palladium and rhodium per ounce?
- Does GM have a guaranteed floor on its palladium and rhodium purchases or is GM paying market rate? If so, what is that rate?
- How much money does GM anticipate saving annually from purchasing palladium and rhodium from sources other than Stillwater Mining Company?
- Will choosing to contract with a foreign supplier have a tangible effect on the anticipated timetable for GM’s ability to repay the Treasury Department its outstanding loans? If so, please estimate the specific amount of time by which GM will advance its timetable for repayment.
I continue to offer you an open invitation to travel to south central Montana to see firsthand the only domestic palladium/platinum producer and to visit with the employees of the supplier you pushed aside under the cloak of the bankruptcy court.
Thanks for your consideration.