As was anticipated, the incoming Obama administration has begun putting new bailout plans into action for nearly-bankrupt auto companies GM and Chrysler. And just as many auto workers had been expecting, the most recent “rescue packages” have come with more than a few strings attached: 50,000 jobs will be eliminated and more plants will be shuttered. As the economic crisis deepens, the bosses will seek to unload the burden onto workers’ shoulders. This underlines the need for militant, class struggle policies in the unions to place the burden of the crisis where it belongs: with the bosses!
The economic downturn has hit the auto industry hard, with the “Big Three” U.S.-based auto makers GM, Ford and Chrysler already in financial trouble long before facing a steep sales slump that began in October. GM has seen its share price fall to a 74-year low, $1.52 per share, on February 20th, it lowest price since 1934. Only a year ago, GM’s share price was $25.54. On the same day that GM shares took a nosedive on the stock exchange, its Swedish-based subsidiary Saab went to court to seek protection from creditors so that the unit can be sold off. GM owes more than $27 billion to creditors, not counting the public loans it has received from the federal government.
President Obama has created an auto industry task force, headed by National Economic Council chair Lawrence Summers, which will oversee the loans and “reorganization” (i.e. downsizing) of the auto industry. The task force will make its decision as to whether the GM and Chrysler cuts will lead to future profits on March 21st. In exchange for an additional rescue package totaling $14 billion announced on February 17th, the task force and Congress are demanding that the companies show “responsibility” by cutting costs. In the restructuring plan it submitted to Congress, GM said it will cut 47,000 more of its 244,000 jobs worldwide and close five more North American plants, bringing the total down to 33, and that it would eliminate production of Pontiac and Saturn brand cars. By 2012, GM plans to close 14 North American plants. GM would also receive the lion’s share of the newest rescue package. Chrysler’s plan calls for cutting 3,000 additional jobs in exchange for $2 billion in loans, on top of the $3 billion loan it has already been guaranteed by the federal government. These most recent loans bring the total rescue package given to the auto companies to $39 billion.
Both GM and Chrysler are near bankruptcy, and have said that even with the new loans they will need still more public financing to remain solvent. Just days after receiving the nearly $13 billion in new loans, GM announced it would need at least $30 billion more to avoid bankruptcy.
In Congressional hearings in December, GM and Chrysler management, along with United Auto Workers President Ron Gettlefinger painted a bleak picture: unless the federal government gave the companies billions of dollars in public finances, they would go bankrupt, meaning even more job losses and plant closings. Gettlefinger pledged to work with management to “amend” the UAW’s national contract with GM and Chrysler. In other words, he agreed to help the bosses cut the workers he is supposed to represent’s wages, benefits and jobs.
Despite having the opportunity to speak directly to Congress, and indirectly to millions of working class people by being on the national stage, the UAW leaders failed to present any alternative to these cuts or to play any independent role in the talks with Congress. Gettlefinger simply followed the line of management and their Democratic “friends” who are offering to “aid” auto workers by placing the burden for the economic crisis – which the working class did not create nor bears any responsibility for – on auto workers’ shoulders. The UAW can do without these kinds of “friends”!
The auto industry does need help. But it needs a solution that is based on advancing the interests of working people, which is the role that our unions are supposed to play. This means that the UAW needs to break with both the auto bosses and the Democratic Party, which day by day is showing where its true interests lay by placing corporate profits before the needs of working families and our communities. Despite the bleak set of options presented by GM, Chrysler and the Democrats, of either: A) bailouts and job cuts or B) total bankruptcy, there is actually a third option: nationalization of the auto industry under democratic workers’ control.
The auto industry has become the front line of the bosses’ efforts to make the working class pay for the crisis. If the UAW were to take an independent stand and negotiate independently with the federal government, fighting tooth and nail to defend each and every job, defend every penny for wages and benefits and fight to keep all the plants open, auto workers would readily gain the support of workers in the steel, airline and other industries, who are also under attack.
Nationalization under workers’ control would allow for the creation of thousands of quality new jobs, for the expansion of the country’s public transportation infrastructure and lay the foundations for an economy based on society’s needs, not corporate profits. If the UAW, along with the whole of the labor movement, mobilized the membership to reject cuts, concessions, and to demand for nationalization of the industry under workers’ democratic control, they could mobilize the support of the working class as a whole.
