The corporation whose name was once synonymous with U.S. economic prosperity has
announced another in a series of layoffs that will leave its workforce a fraction
of its former size.
General Motors will cut 25,000 jobs over the next three years, according to
Chair and Chief Executive Rick Wagoner--almost one in four of the hourly blue-collar
jobs left at the biggest of the U.S. automakers. GM will be left with 86,000
hourly workers in 2008--about the same number of workers the company employed
30 years before in the city of Flint, Mich., alone.
Wagoner's bombshell at a GM shareholders' meeting marks the largest single
corporate layoff announcement in two-and-a-half years--since Kmart said in January
2003 that it was shedding 37,000 employees. The layoffs will be felt throughout
the U.S. economy. According to the Center for Automotive Research (CAR), a nonprofit
think tank, every job lost in a carmaking plant has the impact of 9.4 jobs lost
elsewhere in the economy.
GM bosses say the cuts will come mostly through attrition--as older GM workers,
most of whom were hired in the 1970s, retire--though an unspecified number of
plants and other GM facilities are slated to close.
Gregg Shotwell, a veteran activist in the United Auto Workers (UAW) union and
member of Local 2151 in Cooperstown, Mich., says the autoworkers left behind
will pay a steep price. "Job cuts will save the automakers big bucks, but
it's a bloodletting for the rank and file and euthanasia for the union,"
he told Socialist Worker. "Anyone who has worked the line knows job cuts
mean speedup, overload, excessive overtime, and health and safety hazards. Production
doesn't slow down when the workforce is reduced. The jobs just get harder, faster,
longer and more dangerous."
GM is suffering through a big financial slump as sales of highly profitable
SUVs have declined--in large part, due to rising oil and gas prices. The company
has tried and failed to stop the slump by propping up car and truck sales with
customer incentives--which now average more than $5,000 per vehicle.
By announcing layoffs and complaining about the cost of wages and benefits
for GM workers, Wagoner "is dodging accountability," says Shotwell.
The company's top executive "neglects to mention the $9 billion GM paid
for recall and warranty costs in 2004, or the $1 billion that GM's Saturn subsidiary
has lost every year since its inception," Shotwell said. "Why should
UAW members subsidize Wagoner's incompetence?"
According to GM management, another part of the company's crisis is mounting
health care costs. GM is now the largest provider of health care in the U.S.--covering
1.1 million active autoworkers, retirees and their families at a cost of nearly
$6 billion. At the shareholders' meeting, Wagoner vowed to get tough with the
UAW and force new concessions in the form of higher co-pays and cuts in health
Shotwell responds that the union has already made concessions. "In 2003,"
he says, "the UAW agreed to remove the health care factor from the cost-of-living
calculation, purportedly because UAW members had full medical benefits and weren't
affected by inflation in medical care. If we agree to increase premiums and
co-pays, will the COLA be fully restored and reimbursed?
"On top of that concession, 2 cents is diverted from COLA every quarter
to 'secure pension improvements for current retirees and surviving spouses.'
It doesn't sound like much until you multiply it times sixteen quarters times
135,000 UAW members times the number of hours worked. We also accepted higher
co-pays for prescriptions and doctor visits...Where is the tradeoff? What does
the UAW rank and file receive in return for concessions on jobs and health care?"
As Shotwell concludes, "Concessions don't save jobs, improve products
or sell vehicles. If UAW members agreed to pay for their own medical insurance,
GM would not reduce the price of its cars. The board of directors would simply
reward themselves. The only legitimate solution is universal health care. The
UAW should take the lead and refuse all concessions until all Americans have
full and equal access to health care."
Industry analysts say that GM managers were under pressure to make a dramatic
layoff announcement because they face a takeover threat from Las Vegas casino
mogul Kirk Kerkorian, who has been amassing shares of GM stock. His aim is straightforward--break
up GM. The calculation is that while GM stock is worth less than $20 billion
in total, the various elements of the corporation could be sold off in pieces
and bring in three or four times that amount.
GM bosses are using the Kerkorian threat for leverage against the UAW. As David
Cole of the CAR think tank told one newspaper, "What GM in effect is telling
the union is, with Kerkorian in the picture, who would you rather deal with,
Kerkorian or us?"
Autoworkers will be the losers either way, as one writer on Left Coaster Web
site explained: "There is nothing worse than being a pawn in a dominance
game between two corporate bastards. You watch all of your plans evaporate and
your dreams crumble into dust with every move they make. Your future is nothing
to men who can reduce vast sums of cash into a single item on a balance sheet."
Another target that GM bosses have in their sights is the workforce at the
parts maker Delphi--once a GM subsidiary, and now an independent company that
is GM's largest supplier. UAW leaders showed that they are willing to sacrifice
members at parts plants when they accepted Ford Motor Co.'s restructuring with
its chief supplier Visteon.
"In recent years," says Shotwell, "many plants formerly owned
by the Big Three were forced into 'separation agreements.' The restructuring
has instigated massive concessions, intolerable working conditions and a gross
neglect of ergonomic standards. The corporations are breaking the union into
smaller, more isolated, and thus more manageable pieces. Without a world view
independent of the capitalists, the union has no strategy other than the Three
Cs--Cooperation, Collusion and Capitulation."
UAW President Ron Gettelfinger and Vice President in charge of GM Richard Shoemaker
talked tough earlier this year when they said they would refuse to reopen the
union's contract with GM to consider further concessions. But Shotwell says
their bluster hides a threat--that they will "work within the confines
of the contract to reduce health care costs for the company."
"If the contract isn't reopened, the UAW leadership will claim victory--and
the rank and file won't be required to ratify the concessions, though they would
in effect be subsidizing management's incompetence," Shotwell said. "GM
will reduce health care costs through workforce reduction and the cooperation
of union officials. The rank and file won't have any say."
Shotwell says that the hope for a UAW resurgence lies among parts workers--where
there are now more UAW members than are employed at the Big Three automakers.
He also says that there has been renewed interest in the UAW New Directions
Movement (NDM), a union reform group. Shotwell says the group's Web site will
soon "introduce a plan calling for a national pattern contract [at parts
companies], portability of pensions, a national benefits pool and preferential
hiring and transfer rights for UAW members. NDM is promoting a 'No Concessions'
campaign and advocating that the UAW put the horse in front of the cart by organizing
transplants, instead of lobbying for Democrats."
As he concludes, "It remains to be seen if the sleeping giant can be roused
to action. In the meantime, I intend to stick verbal firecrackers in her ears."