GM Layoffs Could Cost 40,000 Jobs

Photo: GM’s Detroit-Hamtramck assembly plant is slated for closure. (Elaine Cromie / Detroit Free Press)

by Jeff Mackler, published on Socialist Action, December 18, 2018

For public consumption only, General Motors’ billionaire executives flew on public airlines to Washington, D.C., in 2009, leaving their private jets behind. Bleeding $1 billion in monthly losses, and threatening bankruptcy, this corporation—once the world’s largest—eased its way to the government troughs, with their kept media and the United Automakers Workers (UAW) bureaucrats in tow, touting the necessity in those “tough times” of “worker-boss cooperation.”

There they met with Steven Rattner, counselor to Treasury Secretary Timothy Geithner and other top government officials who exist to do the bidding of the ruling-class elite. Rattner then headed President Obama’s White House Auto Task Force. Today, he brags in a Nov. 29 New York Times op-ed piece that he “negotiated” the $50 billion GM bailout that further eroded decades of UAW concessionary contracts, imposing even more heinous provisions on workers—slashing wages and restricting or reducing pension protection, health care, and other union gains that in previous decades were considered sacrosanct.

With GM’s profits “robust,” according to Rattner, the behemoth has announced plans to lay off 14,000 workers in some five plants in the U.S. and Canada over the next two years. Estimates of total jobs to be lost, including closure of GM’s associated complex of non-union parts suppliers, are projected at 40,000. GM’s Lordstown plant, near Warren, Ohio, which makes the Chevy Cruze, had previously eliminated its second shift. It’s slated for closure in March 2019.

No “worker-boss” cooperation schemes found their way into Rattner’s unqualified defense of GM. Although he joined the Democrats in scoring Trump’s trade and tariff policies, while essentially agreeing with those policies, his fundamental solutions never veered from his view that declining capitalism in the United States, faced with ever-deepening competition around the world, had no alternatives other than to extract another pound of flesh from U.S. workers—and workers around the world.

Like most big-time auto manufacturers, GM constantly shifts production to low-wage, low-tax, and barely corporate-regulated countries, from Mexico to China. GM has repeatedly abandoned operations in the U.S. and Europe. Most recently, it announced that its new Chevy Blazer would be produced in Mexico.

In contrast to its 2009 poor-mouthing, GM’s $581 million purchase of Cruise Automation not long ago saw it turn a profit in increased valuation of $14 billion in the single transaction. Meanwhile, nearly 10 years after its government gift/bailout, it has yet to repay $11 billion that remains of the $50 billion it owed to the government.

Indeed, if there were public access to the actual 2009 bailout terms, it would likely reveal the usual fine print loopholes, wherein GM, as well as the myriad of other failing corporations and banks at that time, would pay back significantly less than the trillions of dollars they received. Promises to invest these bailout funds in new job-creating industries, of course, never materialized as the elites turned instead to frenzied stock-market speculation, driving paper prices to historic highs in today’s casino capitalism. Indeed, GM’s most recent massive layoff announcement was followed by a similar market surge.

Today, we must add to the list of government gifts to GM, its share of the bipartisan $1.5 trillion in tax cuts aimed at boosting corporate balance sheets. In all these matters one fact remains constant. What is granted to the rich is taken from the vast majority of working people.

GM proudly announced that its projected plant closures would save the company $6 billion, a figure that they calculated would be achieved by shifting production to meet the “public’s demand” for larger SUVs as a result, they insist, of today’s low fuel costs. At $50 per barrel on world markets, this halving of fuel costs over the past decade has been matched at local gas pumps, where monopoly prices prevail. GM also blamed President Trump’s steel tariffs, which officials claim cost GM another billion dollars.

Need we add to the profit equation GM’s receipt of government “incentives” to produce electric cars, which it barely does? A little more than one percent of the 17.1 million cars produced in the U.S. last year were electric.

GM’s defenders, including Rattner, add to their justification “unexpected” factors that they claim affect auto sales, from the “threat” of electric cars to the onset of ride-sharing apps that they claim will “discourage vehicle sales.” They add to these fake arguments the more substantial and overriding need to remain competitive on world markets by deploying robots and related technological advances that substitute machines for human labor.

What can socialist, labor, environmental, and human rights activists surmise from these horrors? Here some inescapable conclusions:

• Capitalism operates by its very nature to extract profits from working people regardless of the cost to human beings or the environment.

• The automobile industry is bound in a death grip to the doomsday fossil fuel industry. At a time when indisputable evidence that continued reliance on fossil fuels threatens the future of all humanity, the U.S. has increased its fossil fuel output while simultaneously pressing for the production of ever more polluting vehicles that depend on it.

• Capitalism has zero interest in seriously considering any scientifically and socially viable alternatives, whether they are in the construction of a massive system of free public transportation to largely replace automobiles or the massive and nationwide introduction of a clean and sustainable system of energy production. Such projects, at the initiative of an aroused and fighting working class that challenges capitalism’s core prerogatives—including the private ownership of the fossil fuel industry—would provide jobs for all in the millions at top union wages.

Capitalism cannot be reformed. It must be challenged and defeated. This is the job of a mass revolutionary party deeply integrated in all working-class struggles. Socialist Action aspires to build this party. Join us!


Jeff Mackler  is the national secretary of Socialist Action, a Trotskyist political party.[1] He was the nominee of Socialist Action for United States Senate in 2006 and President of the United States in the 2016 election. Mackler founded Northern California Climate Mobilization, is a longtime teacher and union activist with the American Federation of Teachers in Hayward, California and is director of the Mobilization to Free Mumia Abu-Jamal

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