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After the White House rejected a financial rescue plan by General
Motors and Chrysler as not drastic enough, President Barack Obama put it
bluntly to the automakers. To receive an additional $17.4 billion in
federal bailout funds that they requested, Obama
said on March 29, U.S. automakers must become
"much more lean, mean and competitive." That
only meant one thing—break the back of the United Auto Workers
(UAW), one of the most powerful unions in the U.S. labor movement.
The president’s "Auto Task Force," packed with corporate
executives, told the UAW to reduce its labor costs to that of non-union
manufacturers like Honda and Toyota. Chrysler was given 30 days
to hammer out a deal. GM got 60 days. Ford Motors is not seeking
bailout funds at this time; although Ford experienced serious losses
during the economic downturn, it had built-up a considerable reserve.
There are currently 90,000 members of the United Auto Workers (UAW) at
General Motors and Chrysler. Together GM’s and Chrysler’s pension plans
cover 928,000 retirees.
The major issue for the Obama administration
is not so much the differences between union and non-union wages as it
is about brutally slashing workers’ health benefits and pension
funding. The severity of the attacks have a familiar odor—union busting.
They are aimed at the living standards and job security of workers
everywhere. UAW President Ron Gettlefinger, a
loyal Democrat, merely negotiated his union’s terms of surrender.
A March 31 statement by the Obama
administration called on GM bosses to devise a "new
strategy," which would require a brutal "restructuring"
to eliminate "old liabilities." The same statement said GM’s
"best chance may well require utilizing the bankruptcy code in a
quick and surgical way." The statement made a similar recommendation
for Chrysler. Bankruptcy allows bosses to rip up contracts, including
agreements on health-care benefits, wages, work conditions, and pension
obligations.
Accordingly, on April 30, President Obama
announced that the U.S. government was sending
Chrysler into bankruptcy court. The reason given was that the
administration was unable to cement a buyout of Chrysler’s $6.9 billion
debt to shareholders with a government offer to pay them at current
auto stock prices.
Three-quarters of Chrysler shareholders are big investment firms such
as J.P. Morgan, Goldman Sachs, Morgan Stanley, and Citigroup. These
Wall Street crooks received $95 billion in federal bailout funds plus
some $16 billion from the AIG bailout—far in excess of Chrysler’s
outstanding $6.9 billion debt. Observers believe these vulture
capitalists would make far more profit from Chrysler’s liquidation by
selling off resources—autoworkers and the economy be damned. In the
end, a small group of hedge-fund investors held out against a markdown of
their shares.
As part of bailout terms set in Washington, Chrysler succeeded in
securing a partnership deal with Italy’s Fiat, a company of
relative financial health due in part to massive layoffs. Fiat would
initially have a 20% stake in Chrysler. Washington stipulated the buyout as a
condition for providing Chrysler with up to $8 billion in additional
federal funding, beyond the $4 billion it had received.
Fiat CEO Sergio Marchionne, seen as a
possible CEO of a reorganized Chrysler, said, "No one wants to
remove the UAW or the CAW from the table. But it will happen if a
bankruptcy process drags on" (Detroit News, April 15).
Bankruptcy court will likely begin where the massive concessions in the
UAW contract left off. If the company is liquidated—as remains
possible—workers are out of a job. Chrysler bosses had warned that it
would split in half in a bankruptcy, dumping its unprofitable
models—and the workers who make them. Obama’s
Auto Task Force made it plain that it favors the same for GM.
Floyd Norris, a New York Times columnist, wrote on May 2, "It took
a conservative Republican to open relations with the largest Communist
country in the world, it took a liberal
Democrat to break the UAW." In 1979, another Democrat, Jimmy
Carter, twisted the arm of the UAW to accept concessions as condition
for bailing out the Chrysler bosses. In return, autoworkers got massive
layoffs.
The White House intervention in the current negotiations represents a
new level in federal bullying of unions. But the Gettlefinger
UAW leadership has played ball all the way, perhaps even to the extent
of supporting the administration’s bankruptcy strategy. Absent in the
crisis was any talk of a UAW protest in Washington, let alone a strike
or plant occupation, as was done in Flint, Mich., in 1936 and 1937.
Under the auto bailout terms dictated by the Bush administration, and
later accepted by the Obama presidency, a
strike would mean the withdrawal of government loans. The "de
facto" strike ban was accepted by Gettlefinger.
The strike prohibition will continue to tie the hands of the union in
upcoming years unless workers themselves smash the whole rotten deal.
Five years ago the UAW claimed to have 305,000 members at GM, Chrysler
and Ford, now it’s down to 139,000. At the end of 1991, GM had 304,000
hourly workers in the U.S.; by the end of 2010, it
would have 40,000. Meanwhile, massive layoffs and shutdowns continue,
despite hypocritical assurances from Washington that its
protecting autoworkers’ jobs. Unemployment in Michigan stands at 12.6%.
Chrysler plants will close for 30 to 60 days during bankruptcy
proceedings. On May 1, Chrysler announced that it was laying off 6500 workers. There are also reports that
eight Chrysler plants in the Detroit area will close next year.
GM’s latest restructuring plan—which at press time the White House has
yet to approve—calls for trimming 47,000 jobs worldwide, closing more
than a dozen plants in the United States, eliminating four brands, and
cutting 2600 dealerships. As GM cuts jobs, it is expanding operations
in India, China, Russia, and elsewhere. On April
20, GM sent out an e-mail advising workers that 1600 will lose their
jobs just that week. GM will close 13 of its plants for 11 weeks.
At GM, Washington will force deeper cuts and
become the controlling shareholder, reports The New York Times. The
administration will radically downsize the work force, while posing as
a defender of jobs during a capitalist crisis. The GM bosses are
seeking another $11.6 billion in bailout loans in addition to the $15.4
billion it already received in taxpayer money. The Big 3 are offering
buyouts to more than 100,000 workers. So far, 7000 GM workers have
taken it. Workers have a tough decision: accept a buyout or possibly
get laid off anyway.
With the unfolding catastrophe, there are renewed calls from
politicians, including Barack Obama, and some union officials to "buy America," a poisonous
influence within the labor movement that pits worker against worker in
a dead-end racist spiral that can only benefit auto bosses.
We say to the Obama administration and the
bosses’ courts, "Government out of the labor movement! Hands off
the UAW!" In answer to the auto bosses, Obama,
and the union bureaucrats wedded to the Democratic Party, socialists
fight for nationalization of the auto industry under the control of the
workers.
Full employment now at full union wages! Retool the auto industry to
produce energy-efficient mass-transportation vehicles! Nationalize Wall
Street’s banking and security industry! Money for jobs and human needs,
not war!
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