“Deeply disappointed” Senators urge G.M. to reconsider Stillwater contract

Baucus, Tester Call GM Nullification of Stillwater Contract “Completely Unacceptable”

(WASHINGTON, D.C.) – Fighting for Montana jobs and saying they are “deeply disappointed” by General Motors’ decision to nullify its contract with Montana’s Stillwater Mining Company, U.S. Senators Max Baucus and Jon Tester fired off a letter to the automaker’s top executive urging the company to reconsider.

Today a federal judge upheld G.M.’s decision to nullify its palladium and rhodium supply contract with Stillwater Mine.  General Motors, which filed for bankruptcy earlier this year, wants to instead purchase palladium from foreign countries.

Stillwater Mine is America’s only producer of palladium, which is used to make catalytic converters in vehicles.

“We are deeply disappointed with the completely unacceptable actions taken by General Motors over the past few weeks,” Baucus and Tester wrote to G.M. CEO Fritz Henderson.  “We urge you to reconsider this decision and instead re-engage with domestic palladium producers as you move forward in the coming months and years.”

Baucus and Tester also noted that taxpayer money is keeping General Motors from closing its doors.

“It would be problematic under normal circumstances for an American corporate icon to choose foreign suppliers over a viable American option,” the senators wrote. “But when we consider that General Motors only exists today due to the direct assistance of American taxpayers this decision is appalling and weakens our American manufacturing base.”

Currently, Stillwater Mining Company employs 1,322 people.

In 2008, Stillwater’s auto contracts represented 42.8 percent of its revenue.  Stillwater Mining officials say G.M.’s decision to buy palladium overseas will cost the company nearly $500,000 per month.

Letter included below:
 
Dear Mr. Henderson:
 
As part of its recently completed bankruptcy proceedings, General Motors Corporation nullified its Palladium and Rhodium Supply Agreement with Stillwater Mining Company. General Motors’ recent actions could threaten the economic well being of hundreds of families, numerous small communities and dozens of interconnected Montana-based businesses. We ask that you reconsider your decision to reject the Stillwater contract. 
 
Rejection of this contract will have significant effects not only on the company and its employees but on many Montana communities.  As the federal government has invested taxpayer dollars in General Motors to keep it afloat, the company should take into consideration the effect of this critically-important relationship on American jobs. 
 
Currently, Stillwater Mining Company – headquartered in Columbus, Montana – employs 1,322 people, making it one of Montana’s largest employers.  In 2008, Stillwater’s auto contracts represented 42.8% of its revenue.  These long-term auto sales contracts ensure sustainable pricing floors, and are crucial to the viability of Stillwater’s business. General Motors’ rejection of its contract with Stillwater will result in company losses of approximately $500,000 per month. Rejecting this contract almost certainly means losing countless good-paying American jobs.
 
General Motors is choosing to contract with foreign suppliers for future components in its automotive catalytic converters rather than continuing its relationship with Stillwater, which is the only palladium/platinum producer in the United States. General Motors has failed to present a significant need to do business with companies in Russia and South Africa over a company that employs more than 1,300 hard-working Americans.  It would be problematic under normal circumstances for an American corporate icon to choose foreign suppliers over a viable American option. But when we consider that General Motors only exists today due to the direct assistance of American taxpayers this decision is appalling and weakens our American manufacturing base.
 
We are deeply disappointed with the completely unacceptable actions taken by General Motors over the past few weeks.  We urge you to reconsider this decision and instead re-engage with domestic palladium producers as you move forward in the coming months and years.
 
Sincerely,

U.S. Senator Max Baucus
U.S. Senator Jon Tester