Reprinted form the People's Weekly World LANSING, Mich. — The General Motors bankruptcy, announced Monday, was expected, having been predicted for weeks if not months. But the enormity of how far this once mighty giant of U.S. monopoly capitalism has fallen is shocking nevertheless. For many it seems like not so long ago when GM was not only the leader of all auto producers with a commanding 54 percent of the U.S. market, it was also the undisputed dominant corporation in the country’s economy.
In filing for bankruptcy yesterday, GM said it will close 14 plants in the U.S., half of them here in Michigan. It will leave less than 40,000 GM autoworkers nationwide, a tiny fraction of the 395,000 employed by the company in its heyday in the 1970s.
Nowhere is the shock greater than Michigan, GM’s birthplace. Today, the state has an official unemployment rate of almost 13 percent, and because it has seven times the auto jobs of the next highest state, Ohio, people here fear things will only get worse as the job loss in auto ripples through the economy.
At a “Keep the Dream Alive — Reinvest in America” rally that drew several thousand here yesterday, Jim Chapman a steelworker at Great Lakes Works in Ecorse, Mich., which makes steel for auto bodies, said he is a victim of that rippling effect. This father of five has been laid off for six months. “If you’re not selling cars, you’re not making steel,” he said. “It trickles down.”
Lansing, Mich., rally demands, "Keep the Dream Alive — Reinvest in America."
Under a plan announced by President Obama on Monday, the federal government will provide up to another $30 billion to keep GM afloat while it emerges, restructured, out of bankruptcy. That is on top of $19 billion in federal money the company received earlier. The Canadian government will chip in another $9 billion as part of the deal. The downsized company will have 60 percent U.S. government ownership, with smaller portions of its stock held by the United Auto Workers union, bondholders and the Canadian government.
Ron Bloom, who heads Obama’s auto task force, told reporters the government will be a “reluctant shareholder” and will not get involved in day-to-day management. But, he said, with taxpayer money now keeping GM afloat, the government “has to demand something in return for this capital."
In exchange for the new government aid, GM agreed to go through bankruptcy to eliminate more than $27 billion in debt held by bondholders. It also agreed to build a new small car in idled UAW factories and to increase the share of U.S.-based production from 66 percent to 70 percent, the White House said. The union has agreed to a no-strike pledge until 2015.
The White House noted that "the UAW has made important concessions on compensation and retiree health care that, while difficult, will help save jobs for active employees, pensions and health care for retirees."
UAW leaders pointed out in a press statement that "the biggest sacrifices will be made by the tens of thousands of workers who will lose their jobs as a result of the numerous plant closings that GM is announcing in its restructuring plan."
Addressing yesterday’s rally here, Lansing Mayor Verg Bernero said, “D-Day for GM is a sad day.” He said he was “grateful for an administration that is grappling with a problem it did not create, but certainly inherited.”
Many at the rally were angry that GM, while receiving bailout money which may total $50 billion or more, is shutting down 14 plants at home while it increases production outside the country.
“When you offshore jobs, you export the American Dream,” said Bernero.
Bill Parker, president of UAW Local 1700 at Chrysler’s Sterling Heights, Mich., Assembly plant, which is also scheduled to close, said workers are outraged that Chrysler wants to close an additional five plants. His plant employs about 1,400 workers and produces the Sebring sedan and convertible, along with the Dodge Avenger. He asked the crowd of several thousand to join him in calling on the Obama administration to demand that Chrysler reverse its decision.
“Chrysler got the money but they did not get the message,” said Parker, referring to the more than $7 billion in federal bailout money the company has received. The intent of that government assistance was to help people, Parker said. Now, he declared, “our sons and daughters face the prospect of doing worse than we are.”
Referring to GM’s export of jobs to low-wage countries, Michigan Sen. Debbie Stabenow told the crowd that she is “tired of talking about the race to the bottom. I have been doing it for 10 years. We have to raise others up, and not keep pushing us down.”
The Rev. Jesse Jackson emphasized the effect the bankruptcy and closing of GM plants will have on communities. When you close 14 plants and hundreds of dealers, you also close auto suppliers; you cut off a town’s tax base, you close their schools, and cause their teachers, police and fire departments to also shut down, he said.
As details of the GM bankruptcy plan emerged, some 3,000 labor and progressive activists were meeting at the America’s Future Now conference in Washington.
“Loss of jobs and the economic devastation that has spread across this country results from corporate greed,” Change to Win labor federation chair Anna Burger said there. Economic recovery means “more than just companies making a profit,” she said. Echoing Lansing Mayor Bernero, Burger said, “It means good secure jobs, decent incomes and the prospect of a secure retirement — in short, the American Dream.”
Another labor leader, speaking informally, noted that the auto union was caught “between a rock and a hard place” and was able to come out of the bankruptcy negotiations with a few things including a little less pain for some active workers and retirees. But, he said, “Once again, we have workers making the sacrifices while companies close plants and ship operations overseas. Once again we are doing what the finance industry says we should be doing to make a company 'viable' even if that means more massive job loss and continued de-industrialization.” This is a continuation of an approach that “just doesn't cut it,” he said.
“The problem with doing business this way is that it leads to disaster for workers and in the end it doesn't do much for GM either — by doing it their way they ended up deep in debt,” the labor leader said.
“What we really need,” he said, “is a bold new approach that retools our old plants to build mass transit, light rail, green cars and all the things we need for the future. Globalization is here to stay. We need to make it work for the majority, not just for the few, by creating a real plan to keep good paying manufacturing jobs and green jobs here in America. Let’s use our leverage to fight for this approach.”
John Rummel is the Chair of the Michigan District of the CPUSA. jrummel @ pww.org. Joel Wendland and John Wojcik contributed to this story.
