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GM job cuts will devastate North American cities

General Motors' plan to eliminate 30,000 hourly jobs by 2008, announced Monday in Detroit, will have devastating consequences for cities in the United States and Canada, and its ripple effects will hit working class communities throughout the two countries. The closure of twelve facilities will reduce the auto maker's manufacturing jobs in North America by nearly a third.

Taken together with hourly and salaried job cuts already announced this year by GM, Ford and the auto parts makers Delphi and Visteon, Monday's announcement brings the total of auto jobs targeted for destruction to 60,000, and this does not take into account the impact of Ford's downsizing plan, to be made public in January. The number two US auto maker has made clear that it intends to eliminate thousands of jobs and permanently close a number of factories.
Since 2000, more than 100,000 hourly and salaried automotive jobs have been eliminated in the US. The latest GM cuts are part of a longer-term trend in which corporations have wiped out jobs that once provided a relatively stable livelihood for manufacturing workers. Through major struggles in the 1930s and into the post-war period, workers were able to win concessions in pay and benefits. This was particularly the case in the auto industry.

For the past quarter century, beginning with the Chrysler bailout of 1979-80, the auto companies have been downsizing their work forces, closing plants, and using the prospect of unemployment as a club to impose wage concessions and chip away at health and pension benefits, as well as previously established improvements in working conditions.

They have been assisted by the United Auto Workers union, which has collaborated in the destruction of jobs and the undermining of wages and benefits in order to boost the competitiveness of the US auto companies against their European and Asian rivals.

This process has reached a new stage, marked by the decision of Delphi, which was spun off by General Motors in 1999 and remains GM's main parts supplier, to file for bankruptcy protection and demand pay cuts of 60 percent. The company is also demanding sweeping cuts in health benefits and pensions, and plans to eliminate 24,000—or nearly two thirds—of its US hourly work force.

In an interview with the Detroit News published Tuesday, the day after GM announced its job-cutting plans, Delphi Chairman and CEO Robert S. Miller reiterated his demands for a rollback to conditions not seen since the open shop days of the 1930s. Defending Delphi's proposal to slash the base wage of its workers to $12.50 an hour, Miller said, "The fundamental reason [we are in bankruptcy] is we have labor costs in our North American facilities that are double or triple what our US-based unionized suppliers [competitors] pay. That is a difference that is unsustainable."

Later in the interview, Miller volunteered the following: "One thing you haven't asked about is whether we will shrink the number of US jobs even if we get what we proposed... And the answer is yes, there will be a significant shrinkage."

Studies show that each job at a US auto factory supports seven jobs at other businesses nearby. That means the elimination of 60,000 auto jobs in the US and Canada will result in a total job loss of well over 400,000. And these losses will be concentrated in working class communities already hard hit by previous layoffs and plant closures.

The measures announced on Monday will be only the beginning for GM workers. On Tuesday, the company's stock fell for the second straight day, as analysts on Wall Street made clear that the cuts would not be sufficient to satisfy banks and investors.

Ron Tadross of Bank of America continued to give GM stock a "sell" rating, saying he still anticipated the company to end up in bankruptcy. John Casesa of Merrill Lynch said, "It will likely get worse before it gets better. We believe GM's announced restructuring plan is only the first step in the long process."

The downsizing of the US auto industry has already produced socially catastrophic consequences in parts of the country, particularly in Michigan, the historical center of automobile production. The Detroit Free Press on Tuesday cited an astonishing statistic, noting that, according to US census data, "Michigan's median household income has fallen by $9,914—19 percent—between 1999 and 2004, more than any other state."

This figure crystallizes a historic decline in working class living standards—one that precedes the impact of the new and more drastic assault on jobs and wages.

Giving a sense of the mood among GM workers in the region, the newspaper quoted Robert Paulk, an hourly worker at the Tech Center in Warren, Michigan, who said, "There are a lot of people that are really mad. They think this is the thing that revolutions are made of."

Metro Detroit—which includes major plants in Pontiac and Orion Township—has been largely spared in the most recent announcement, though these plants are considered to be high on the list for future cuts. Plants in other areas in Michigan, however, are among the facilities that will be shut down or scaled back.

The city of Flint is slated to lose over 700 jobs with the shutdown of the Flint North engine line in 2008. The Flint North complex once employed 20,000 workers, including the Buick City complex that closed in 1999. The number of active GM workers in the city has declined from a peak of over 80,000 to just a few thousand today.

Flint will also be hit by Delphi's plans to close its Flint East plant, which employs 3,400 people. The company has already shut down production at its Flint West plant.

Once known as "Vehicle City," Flint has become a ghost of its former self. Over a quarter of the population, including nearly 38 percent of children under 18, live below the poverty line. The official unemployment rate stands at 12 percent. Both of these figures—comparable to those found in Detroit—understate the devastation that has overcome the city in the past two decades.

Another Michigan city to be hit by the plant closings is Lansing. The Lansing Metal Centre, which employs 1,360, is slotted to be shut down by 2007, and the Lansing Craft Centre, which employs 450 workers, will close by 2007. Nearly 3,000 jobs were eliminated when the Lansing Car Assembly plant was shut down last year.

Also in the Midwest, GM is planning on eliminating the third shift at its SUV plant in Moraine, Ohio in 2006, a move that is expected to cost 1,000 jobs.

Thousands of jobs will be lost in southeastern Ontario, Canada. GM announced that it will close its Oshawa No. 2 plant by 2008, eliminating 2,500 jobs. It will also eliminate a shift at its No.1 plant, leading to a loss of an additional 1,000 jobs. About 140 jobs will be lost with the shutdown of a parts plant in St. Catharines, Ontario.

An article in the Toronto Globe and Mail on Tuesday noted that the entire economy of the region will suffer. "About half of Canada's critical auto parts industry lies exposed to the shock waves emanating from the planned closing," the newspaper reported. According to the article, GM contracts are responsible for half of the 100,000 jobs in the Canadian auto parts industry. An estimated 12,000 jobs in the parts industry may be eliminated as a result of the job cuts at GM.

The economic impact will extend beyond these parts jobs to wider sections of the economy. "Jan Myers, chief economist for Canadian Manufactures & Exporters," the Globe and Mail reported, "estimates that about nine jobs are created directly in Canada for every auto assembly position. That means the sector generates about 20 to 25 per cent of the total jobs in Canadian manufacturing."

Outside of the US Midwest and Canada, several major plants will be closed in southern states. GM will sharply scale back production at its Saturn plant in Spring Hill, Tennessee, resulting in some 1,500 job losses. Over 2,500 jobs will be eliminated in Oklahoma City, Oklahoma when a plant there is closed in 2006. And 3,000 workers will lose their jobs in Doraville, Georgia, just outside of Atlanta.

Neither the United Auto Workers nor the Canadian Auto Workers union is willing or able to mount a serious struggle against the auto companies' attacks. They are both based on a nationalist perspective that precludes a unified struggle of North American auto workers, and instead facilitates the companies' strategy of divide and conquer. Their nationalism is bound up with their defense of the capitalist system. They oppose any struggle that challenges the private ownership of the auto industry and the subordination of the interests of workers to the corporate drive for profit.

The jobs and living standards of auto workers in the US, Canada and internationally can be defended only through their united mobilization against the transnational corporations on the basis of a socialist program.

-world socialist website

homepage: homepage: http://www.wsws.org


IF GM produced more fuel efficient vehicles 23.Nov.2005 10:52

THEN there wouldn't have been 30,000 layoffs

You'ld think with all the other nations (besides US) expressing concern about global warming, and the US occupation of Iraq being primarily about Halliburton and Bechtel controlling a sizable portion of the global oil supply, somebody would get an idea to increase production of fuel efficient vehicles or hybrids, no?

So far the only corporation seriously attempting to market fuel efficient hybrids is Toyota, and even they are being shot down by the big three (GM, Ford, Daimler-Chrysler) with excess tariffs and other blockages on imports. Guess the free trade agreements only apply when US corporations stand to benefit, not the other way around. So instead in the US people who want to purchase hybrids like the Toyota Prius must stand in line on a waiting list and pay exorbinant amounts to have this 60 mpg vehicle. How fortunate for the petroleum corporations that people can still buy gas instead of saving their money for other needs like food..

Here's what some liberal from Berkeley had to say about the Prius;

"
"As a Toyota spokesman said about the late 1990s "We invested in hybrids," he says. "Another company bought a humongous SUV company. You make your decisions and you live with it." Indeed, it seems no coincidence that the Big Three are now scrambling to produce hybrids. Junk climate science leads to junk climate policy, and potentially - as some US automakers recently discovered - junk bonds.

We won't turn the tide on a problem as massive as climate change overnight. And hybrids are just part of the solution - designing walkable communities, investing in public transportation, and developing alternative fuels must also be part of the mix. But the success of the Prius shows that cost-effective and, yes, even desirable solutions to climate change are out there. And the icing on the cake? It's fun to drive."

 http://www.enn.com/comment.html?id=396

Unfortunately the corporate execs of GM who made the decision not to invest in hybrids won't have to live with the results of their decision, the workers will. Just like the Micheal Moore movie "Roger and Me" when GM closed down their assembly plant in Flint Michigan few years ago, workers will soon hear the local sheriff knocking on their door with the eviction orders in hand. Meanwhile GM CEO Rick Wagoner Jr. can celebrate the holidays with fine wine and caviar while the recently homeless GM workers scrounge for food in freezing garbage cans. Just in time for the holidiays..

Rick Wagoner Jr. profile;

 link to www.forbes.com

Rick Wagoner Jr. currently rakes in about 4 million dollars not including stock options, Wishing that someone knows his home address so people can visit him for the holidays and get some extra food from out of his garbage can!!

BTW i prefer riding bicycles as an alternative to car culture, though i feel that everyone would be better off if there were more hybrid vehicles available at lower prices and less waiting time and less gas guzzling SUVs on the market..

If people don't want to purchase gas guzzling vehicles anymore and prefer better fuel efficiency, than GM execs have the obligation to meet this demand. Instead they continue mass producing gas guzzlers and the eventual result is another US plant shutdown and loss of jobs. The GM execs don't care, they just depend on the poverty of third world nations to supply them with workers willing to work for less and without any benefits, health coverage or job security. Forget about on the job protections from chemical toxins, the wealthy CEOs of GM will cut costs even if their new workers all die of cancer within a few decades. To the executive ruling class, workers everywhere are disposable..

Let's show the GM execs that sometimes workers fight back..

Guzzler Motors will never learn 23.Nov.2005 13:10

Ralph

This happened in the 70's too but Guzzler Motors retards dont learn. Keep making same mistakes. They still dont get it because they are still heavily advertising big SUVs and pickups. They are hopeless and the stockholders should oust the leadership. Sooner the better.

... 23.Nov.2005 16:42

this thing here

i would agree with all of the above. i would also say that gm needs to get rid of it's auto design department. there are some goddamn ugly cars being pumped out by gm. caddies look like shit, whatever their quality is. whoever designed the chevy avalanche needs to be punched. and then, once they stop designing such ugly autos, they can institute a massive new engineering quality control program. shitty products, shitty profit, tanking business.

as for s.u.v.'s, they're a perfect example of capitalism doing more harm than good. the reason why they will keep pumping out the gas guzzler s.u.v.'s is because they can make so much more profit off them than they can selling sedans and small cars. all that extra metal, all that extra plastic, all that extra glass (compared to a regular sized car), they can eek out an even bigger margin. so, essentially, a product which is less efficient, which uses more resources, which is more harmful to other motorists, and also to the environment, is the one which makes more profit. so what harms the world benefits gm. that's just wrong.

If there wasn't an SUV, people would invent one... 25.Nov.2005 10:50

Pravda or Consequences

The market wants the image of power and nothing says, "I can squish you", like a Hummer.

The easier target. 26.Nov.2005 09:15

What to do if you can't compete. gapinsent@hotmail.com

I think it is common knowledge that Toyota and Honda are winning the market share war in North America for vehicles.GM and soon Ford see fit to attack this problem by unburdening themselves of legacy costs (pension,negotiated contracts......).I'm no expert on the Japanese labour market but I think that the Japanese auto worker receives comparable compensation and still manages to produce impressive results globally.So what is the Japanese automakers secret weapon. Foresight? Innovation? Efficiency?Long term economic strategy?If you can't provide quality product,lower labour costs are not going to help.If North American car companies can't provide the market with what it wants,it won't lose jobs but simply give them away.