Why Rescue Automakers and Other Corporations that Have Been Bad Neighbors?

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As Congress ponders whether to bail out the auto industry–and Treasury Secretary Hank Paulson opposes using the Big Finance rescue package to aid the Big Three automakers–a press release put out by a Democratic congressman from Wisconsin, Steve Kagen, illustrates the dilemmas at hand when it comes to assisting multinational corporations that have made their own now-falling-apart beds. Kagen asks why the taxpayers should help out Chrysler when the owner of Chrysler has screwed his constituents by shutting down paper mills in his district and refusing to sell those facilities to others.

Kagen explains:

Congressman Steve Kagen, M.D. says no taxpayer money should be given to Chrysler until after Wisconsin papermakers go back to work. Cerberus Capital Management, L.P., one of the largest private equity investment firms in the United States, owns many corporations including automaker Chrysler and NewPage Corporation, which recently closed two paper mills in Northeast Wisconsin putting over 750 people out of work.

“If Cerberus needs to raise cash to bailout Chrysler, then they should sell our idle paper mills in Kimberly and Niagara,” said Kagen. “Local community leaders have given them opportunities to sell – they have turned them down – and now hard working families in Wisconsin are being asked to help the very people who have taken away their jobs. Outrageous. I am strongly against any taxpayer funds being given to Chrysler until their parent company gives us our jobs back. Cerberus already has millions of dollars of assets in these mills which they can sell tomorrow, putting my friends and neighbors back to work, and generating the capital necessary to keep Chrysler afloat.”

Kagen spoke this weekend at the dedication of Camp Kimberly, an area set up across the street from the quiet NewPage paper mill. Former mill workers are holding daily vigils to urge NewPage executives to run the mill, or sell it.

….The closure of the mill in Kimberly caused the loss of over 450 papermaking jobs and the Niagara mill closing put over 300 people out of work. Both closures were due to unfair competition from foreign-made paper.

Whether Kagen is right or not about what Cerberus has done–or not done–regarding the paper mills in his district, this situation shows a fundamental problem. Troubled corporations deemed too big to fail are running to the government for handouts, and it may be best of bad options to use taxpayer dollars to prevent their collapse. But these same corporations have often showed disregard for their workers, their consumers, and the communities in which they have thrived. That is, they haven’t made decisions to advance the greater good–after all, that’s not been their mission. (Their top job has been to make money for the shareholders and owners.) Yet once they hit trouble, they plead that it serves the greater good to keep them afloat. It’s a basic asymmetry. To compensate, taxpayers and legislators ought to apply public interest standards for any bailouts that do proceed.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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