the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Nov 27, 2006
Working people are angry today, and their vote to dump the Republicans expresses it.
The Republicans had taken the lead in justifying this vile war in Iraq. They had handed over more tax money to the wealthy and subsidies to their corporations. They had starved the public school system for money, while reducing needed social services and public services. And, for good measure, they had tried to win voters by using the most reactionary social attitudes possible: anti-immigrant, racist, anti-science, anti-abortion.
With good reason, people voted to get rid of these vicious scoundrels.
The question now, however, is: what did we get? Thanks to this electoral system, which is designed to prevent the population from registering its will, we still have Bush.
So what? If the Democrats were ready to make a fight against Bush, what could he do? Voters gave the Democrats a crushing victory over the Republicans. The Democrats took 24 of the 33 Senate seats up for election. They took at least 29 House seats away from the Republicans. And they didn’t lose a single seat of their own. They now control a sizeable majority of governor’s chairs, as well as a big majority of state legislative houses.
This vote gives the Democrats a mandate to impose the changes they talked about before the election: get out of Iraq; reverse the tax cuts which enriched the wealthy at the expense of needed social programs and public services; prohibit all the corporate maneuvers for cutting jobs and wages.
In two years time, the Democrats could impose all these changes and Bush couldn’t stand in their way–IF the Democrats were ready to use their new position to push through what people want. They would have working people standing behind them, ready to fight. And working people are the vast majority of the population.
What could Bush, this washed-up, smirking fool do? Nothing.
That is, he could do nothing IF the Democrats made such a fight.
Instead, they have already rushed to reassure Bush that their top priority is to work with him. They have backpedaled on Iraq, rushing to clarify what they left vague before the election–they aren’t for getting out of Iraq now. Finally, they went out of their way to reassure the wealthy that the tax cuts favoring them would stand.
In other words, if working people are to get the change they thought they voted for, they are going to have to be ready to fight for it. The only thing Democrats or Republicans really understand is the anger of the population, when it is expressed loudly, clearly, without any hesitation. If you just hand them your vote, they use it against you. We will only get what we are prepared to fight for.
Nov 27, 2006
Corporations shifted a much larger share of their donations to Democrats this year than in recent elections.
The Republicans raised somewhat more money, getting 632 million dollars. But the Democrats, at 616 million, got almost as much. Compare this to the 2002 election when the Republicans beat out the Democrats 342 million dollars to 249 million.
Time Warner, the media conglomerate, gave 71% of its 1.4 million dollars in donations to the Democrats this year.
Pfizer, the pharmaceutical giant, which had given 67% of its donations to Republicans during the first nine months of the year, gave 59% of contributions to Democrats during the last month of the campaign.
Even Wall Street got onto the Democratic bandwagon. Brokerage firms gave 51% of their donations to the Democrats in this year, compared with 48% in 2004.
It seems that a lot of companies, CEOs and media outlets decided this year that the Republicans had worn out their usefulness. They need someone else to carry the torch for them–and they knew they could depend on the Democrats.
Nov 27, 2006
Electric service in New Orleans has been so horrible that many say living there is like returning to the Dark Ages.
One section of the city, Bywater, still has no electrical service at all, despite the fact that the Bywater was not even hit by the flooding. In the rest of the city, there are frequent power outages. The wind blows and a neighborhood’s power goes out. Or it rains and the power goes out somewhere else. Thunder crashes distantly and out goes the power.
The wealthy may be able to afford their own emergency generators, but for everyone else, these power outages make life even more unbearable. No street lights breeds crime. Food in refrigerators and freezers spoils, and sleep becomes a luxury in the hot and humid nights.
The electric and gas utility, Entergy of New Orleans, has not even started to carry out hundreds of millions of dollars of repairs to the electrical substations and power lines. Instead, it has resorted to the short-term jury-rigging of the system.
Entergy claims that it is bankrupt and does not have the money necessary to carry out the repairs. Of course, this is a lie. Entergy of New Orleans is a subsidiary of a much bigger and rich company, called the Entergy Company, which owns electric utilities and power stations all across the country. Over the last year, the Entergy Company profits actually increased by one-third compared to the previous year, more than four billion dollars. And last year, the company paid its CEO J. Wayne Leonard, a bonus of eight million dollars.
However, the company has made it clear that it will not use these profits to pay for repairs in New Orleans. “If Entergy were to hand over millions of dollars [to its subsidiary in New Orleans], it would not be fulfilling its legal obligations to its shareholders,” explained a company spokesman.
Instead, in a conference call to investors in November 2005, CEO Leonard explained that the company intended to be “relentless in recovery of storm costs.” That is, it has forced the customers and the government to pick up the tab.
It has boosted the electric and gas bills of its customers by one-third–money which those who have lost almost everything obviously cannot afford. And it also got the Louisiana Recovery Authority to grant it 200 million dollars in federal recovery aid–under the threat that if it didn’t get that aid, it would double electric and gas rates again. On top of that, Entergy had previously received a 71 million-dollar federal tax refund. And in the future, many of its taxes will be deferred.
In other words, the recovery after the flooding in New Orleans has been a recovery in profits, not a recovery in for the vast majority of people who live there.
Nov 27, 2006
Proposal two passed in Michigan by a 58% vote. It amends the state constitution to ban affirmative action programs by state and local governments in public employment, contracting and education. Those who pushed to ban affirmative action campaigned under the slogan of “equality.”
What a load of crap!
Anyone for real equality would be fighting for the most enriched preschool possible–for free–for every child. That way every child could enter kindergarten EQUALLY ready to read, ready for math and science, familiar with computers, comfortable with music, art and culture.
Anyone for real equality would fight for smaller class sizes in public schools. That way every child who faces obstacles to learning could be EQUALLY helped, and their talents properly developed.
Anyone for real equality would side with the working class and fight like hell to open up good paying jobs for everyone.
Affirmative action came at the very end of the black mobilization that spanned the 1950s, ’60s and early ’70s. In effect, it was a recognition that the movement had been tamed. The strength of the mobilization of the black population and other social movements had earlier led to vast social improvements that helped the working class as a whole–white, black, brown, female, male–and all oppressed groups.
Health care improvements were introduced through the formation of Medicare and the expansion of Medicaid as a national program.
Unemployment insurance was broadened and improved.
Social security was extended to many more workers and payments were increased–almost to a liveable level!
In many states, workers’ compensation was improved.
New education programs were added like Head Start. Financial aid for college was broadened and increased. And many more slots in colleges were opened to working class children.
Discriminatory laws were changed.
As the last embers of the social movements of the 1960s were being extinguished, affirmative action was introduced. Implicit within affirmative action was an understanding that the ruling class would offer only limited educational and employment opportunities. Affirmative action would pretend to level the playing field a bit–but only in the competition for limited educational resources and jobs.
And now today come these people pretending that affirmative action is the issue. In reality, they are only justifying this limited situation which prevents most working class children from ever going to college.
Everyone who wants should be able to attend the university of their choice. Every college should offer a superb education for a tuition ordinary people can afford. And everyone who wants to work should have access to a decent paying job.
This is the only path to real equality of opportunity.
Nov 27, 2006
The municipality of Philadelphia has demanded an “apology for a crime” from the cities of Paris and Saint-Denis, France. Their crime? They have both honored the black prisoner Mumia Abu-Jamal, unjustly condemned to death in Philadelphia in 1982, still waiting to be retried.
Philadelphia officials say it is “abnormal to honor a condemned person.” In fact, they are desperately trying to maintain Mumia’s conviction–exactly at the point that growing international support for Mumia may force the judicial system to grant him a new trial where evidence of his innocence can finally be heard.
Philadelphia’s actions are an attempt to stifle his supporters or harass other cities whose authorities intend to denounce the barbarism of the death penalty, never abolished throughout the United States.
Paris has made Mumia Abu-Jamal an honorary citizen, while Saint-Denis named a street after him. These cities are not alone. Twenty other French cities have also named him an honorary citizen, as well as the cities of Montreal, Venice ... and San Francisco!
Mumia Abu-Jamal is a former militant of the Black Panthers and a militant journalist, accused by the American judicial system of having killed a police officer in 1981–a crime that he has always insisted he did not commit. For 25 years, a mass of evidence has been found, supporting his innocence. In 1990, the main witness against him was proved to have been in a place where he could not have seen the crime. He admitted that his false testimony had been coerced under threats by the police. Other witnesses confirmed that Mumia was not at the scene of the crime. Finally, in 1999, a mafia contract killer confessed to the murder. Since 1995, the FBI has known that Philadelphia police were implicated in rackets and corruption tying them to the Mafia. And the cop who was killed was said to have exposed these links.
Until now, the American judicial system has refused to accept the many appeals on Mumia’s behalf. Those denials have nourished the protest movement supporting Mumia.
On November 29, a delegation from the city and the police of Philadelphia will appear before the city government of Paris. This will be another opportunity for the defenders of Mumia to confront Philadelphia officials, demanding freedom for an innocent prisoner. Mumia was a victim like other black militants during the years between 1950 and the 1970s–killed or imprisoned by U.S. authorities for challenging their racist system.
Nov 27, 2006
After the assassination of Pierre Gemayel on November 21 in Beirut, Western leaders and the media accused Syria of causing all the problems in Lebanon. They hold the Syrian regime of Bashir al-Assad responsible for various assassinations of journalists and political leaders over the last two years.
The Syrian regime is hardly a model of probity. However, the Western leaders, including the U.S. and Lebanon’s former colonial power, France, lie every day of the week to serve their own interests.
The Lebanese government of Fouad Siniora is dominated by the “March 14” grouping, formed by representatives of Maronite Christian and Sunni Muslim businessmen. They have long served as the direct agents of the U.S. and European bourgeoisies, at the expense of the interests of the majority of the Lebanese population.
Pierre Gemayel was the scion of a family which has dominated Lebanese politics. His grandfather, Pierre Gemayel Sr., was the founder of a fascist party set up after he returned from the 1936 Olympics in Germany. Grandson Pierre Gemayel had been a government minister of this same Phalangist party. The Phalangists have never repudiated their history, which involved carrying out several massacres. Gemayel was known for his frankly racist statements against the Shiite population of Lebanon, which he called “cattle.”
The U.S. and France have relied on the Siniora government in Lebanon to impose their interests in the region at the expense of powers like Syria and Iran. This policy is a continuation of what France did in the area when it established Lebanon as its own state, cutting it out of Syria. France set up a state founded on religious differences in order to better dominate the area. But now this policy is running into resistance.
In Iraq, the U.S. is sinking into a quagmire. This past summer Israel led a murderous war in Lebanon, trying to crush Hezbollah, which is rooted in the south of the country among the Shiite Muslim majority and is allied with Iran. Israel did not succeed. Hezbollah came out of this war reinforced, at least on the political level. In fact, while Hezbollah’s combatants were fighting the invading Israeli army, the other parties of the Lebanese government absented themselves from the scene. They proved themselves incapable of taking elementary measures to defend and aid the civilian population.
Today, Hezbollah and its allies, the other Shiite party Amal and the “free patriotic current” of Christian general Michel Aoun, demand a greater place in the government. The Shiite government ministers of Amal and Hezbollah have resigned, demanding a governmental reorganization in their favor or early elections. But the government of Siniora continues as if nothing has changed.
The assassination occurred in this tense situation. Different parties seem to be preparing for an armed conflict like the previous civil war, lasting from 1975 to 1990. Each of them seeks to stir up hatred between the different religious communities making up Lebanon–Maronite Christians, Sunni and Shiite Muslims, and Druze.
The different parts of the Lebanese population will be called on to serve as cannon fodder in such a conflict. The main responsibility for this disastrous situation lies with the imperialist powers. They maneuver to use one or another religious or ethnic minority as the principal servant of their interests today. But they are ready to drop this minority as soon as the relationship of forces changes. Imperialist powers can find agreement, for example, with Syria and Iran, although they pretend to revile these regimes today.
Nov 27, 2006
Iraq has been the center of some “shuttle diplomacy” in recent days. Last week, the Syrian foreign minister visited Iraq and signed an accord which formally started diplomatic relations between the two countries after a 24-year break. This meeting was followed by a meeting of the presidents of Iraq and Iran in Tehran, the Iranian capital.
Officially, these meetings were initiated by Syria and Iran. Commentators in the U.S. explained this as an attempt by these governments to increase their influence in the region. Certainly, these governments would welcome any opportunity to do that. But it is equally clear that the Iraqi government could not hold these meetings without the approval of the U.S.
In other words, at this point the U.S. is interested in closer relations between Iraq and its neighbors, Syria and Iran. No doubt, the recent meetings between these governments will be on the top of the agenda on Wednesday, November 29, when George Bush himself gets together with the Iraqi prime minister, Nuri al-Maliki in Amman, Jordan.
With a large military force bogged down in Iraq in an unwinnable war and opposition to the war growing domestically, the U.S. is now looking for a way to reduce its troops in Iraq. But the problem for the U.S. is that Iraq doesn’t have a government and army unified enough to control the population. So, the U.S. wants to establish the largest of the existing militias, the Shiite Badr militia, as the new army, and it is seeking the help of Syria and Iran in propping up this new regime in Iraq. Of course, Bush doesn’t issue this appeal to Syria and Iran openly, since he has, for years, called both of these regimes “terrorist.”
Like every other U.S. move in Iraq, however, these plans have only led to a worsening of the situation for the population. Setting up the Badr militia as the Iraqi army requires the elimination of other militias, both Shiite and Sunni. So these militias, fighting for survival, have stepped up their attacks, killing more civilians in the process. Last Thursday alone, a series of bombings in crowded areas of Shiite neighborhoods in Baghdad killed at least 215 people. Shiite militias retaliated by firing mortar rounds at Sunni mosques. In one of the more gruesome incidents, Shiite militiamen doused with kerosene and burned alive six Sunnis coming out of a mosque.
On its part, the U.S. military has put Sadr City, the vast working-class neighborhood of Baghdad and the base of the Shiite Mahdi militia, under siege. But this has resulted only in more civilian casualties and turned the population even more against the U.S. (The place of the Bush-Maliki meeting–Jordan–is in itself an admission by the U.S. that Baghdad, including its heavily fortified “Green Zone” where government and U.S. installations are located, is too dangerous for Bush to visit.)
If Syria and Iran, repressive dictatorships themselves, do end up playing a role in the future of Iraq, it will be one to help set up another dictatorship there. They will help the U.S. to more effectively control the Iraqi population and pump the Iraqi oil for the benefit of U.S. corporations.
This change will not necessarily mean that U.S. troops come home soon, either. Recent statements by U.S. military brass, for example about either enlarging the Marine Corps or extending tours of duty to “adequately train Iraqi forces,” prove this. And U.S. officials don’t hide the fact that one reason they want to reduce the number of troops in Iraq is so that they can engage them in possible wars elsewhere in the future!
No, this new “shuttle diplomacy” is not about ending U.S. involvement in Iraq, or the Middle East in general. Nor will it change the horrible conditions imposed on the population of Iraq–because, even if the U.S. succeeds in eliminating some of the militia leaders, it will have done so only to consolidate the power of other, equally brutal ones.
Nov 27, 2006
In the poor countries of the world, more than 5,000 children die every day from drinking contaminated water. According to a 2006 U.N. Human Development Report, more than a billion people lack access to clean water and more than two billion have no sanitary facilities. Human waste ends up tossed on the ground or runs openly into the streets of the world’s largest cities. Nearby rivers where many people draw their drinking water run with untreated sewage.
When the governments of wealthy countries provide money for “development,” it hardly ever goes to safe water and plumbing facilities. Only about four billion dollars a year is spent for clean water and sanitation, far less than the rich countries spend just on bottled water. Nor do the governments in poor countries make water and sanitation a priority. So their populations constantly suffer and even die from diarrhea, cholera, typhoid or parasitic worms, all associated with unclean water.
These deadly diseases no longer affect populations in the rich countries. Britain’s industrial revolution forced millions of peasants from rural areas into urban slums. But by 1850, the country was installing more than 2,000 miles of sewage pipes every year. Even when humans didn’t understand the connection between contaminated water and deadly disease, they understood that sewage affected their health. Two thousand years ago, a giant pipe was laid under the center of Rome to push waste into the River Tiber. More than 3,000 years ago, sewage pipes were laid in the Indus River valley of ancient India.
Ridding cities of sewage has led to longer life spans. When sewage channels were built through the slums in Karachi, Pakistan’s capital, the infant mortality rate began to fall. Today newborn deaths have gone from 130 per 1000 to 40 per 1000 in 25 years simply because sewage was taken away from residential areas.
What can be done in one city could easily be done elsewhere–if saving human life were a priority.
Nov 27, 2006
Today, it has become fashionable for U.S. politicians to say that the Iraqis have to take more responsibility for ending the civil war-style killings going on in Iraq. Such statements absolutely drip with cynicism and hypocrisy.
It is true that Iraqi society is fracturing along ethnic lines, with various militias now carrying out ethnic cleansing of neighborhoods, cities and regions. One of the deadliest questions asked of people on the street or in the bus is “Shiite or Sunni?”
But it’s not true–as we are being led to believe–that these killings come out of ancient hatreds that go way back forever and forever. First, in the past, many tribes in Iraq had both Sunnis and Shiites in them. Second, Iraq long ago developed into a modern and largely urban society, in which people mixed and intermarried. Many cities, starting with Baghdad itself, where one-quarter of the Iraqi population lives, were made up of a rich mixture of peoples and cultures. This developed despite all the often divisive politics carried out by previous rulers–the Ottoman Empire, the British Empire, and yes, Saddam Hussein.
But since the U.S. invaded, this ethnic strife has been taken to a whole different level, one that was purposely encouraged by the U.S. government. In fact, tucked into an 89 billion-dollar supplemental appropriation, which Congress passed in November 2003, were three billion dollars especially earmarked to fund Iraqi death squads–their recruitment, arming and training. After the U.S. invaded, thousands of U.S. CIA agents, Navy Seals, and Army Special Forces streamed into the country, sometimes literally handing out bags of cash, in order to pay off the various militias and thugs for their services.
This is why when Iraqi people are asked about the ethnic strife in their country, they first blame the U.S. and demand that the U.S. leave immediately.
We should demand the same thing.
Nov 27, 2006
Janitors in Houston just completed a month-long strike against the five largest cleaning companies in the area. The contract they agreed to gives them a wage increase from the current wage of $5.15 an hour to $7.75; the ability to work six hours a night, up from four now; health insurance for themselves and their families; and paid holidays and vacation time. All of these will go into effect on January 1, 2009.
These janitors and their strike were organized by the SEIU. Despite what has been said about the SEIU as a model for future organizing, it is far from that. Across the country, the union has called on workers to strike simply as a bargaining tool, to be used as leverage by the negotiators at the top; it does NOT call on workers to organize and control their own strike. In this way, it is not very different from other unions today; and that’s a problem.
In addition, the SEIU has, throughout the country, been collapsing union locals into mega-locals, some of which cover hundreds of thousands of workers across several states into one local. The SEIU leadership claims this is necessary, in order to organize in today’s economy. This is absolutely not true, if the goal is for workers to control their own union structures and their own fights.
Of course, if all union leadership wants is to have organizations and strikes dependent on paid staff members, this is what it would do. Although the “local” leaderships are technically elected by the membership, the workers never actually have any contact with them. The union officials who head smaller units, on a truly local level, are not elected, but are appointed staff representatives. These staff members are often hired from outside the union, and are often not workers at all, but former students; they know nothing of the daily life of working people.
The companies, on the other hand, gain a union ready to be “responsible” to their desire to make profits. It’s much better for the companies to have a fight led in an “orderly” way, controlled by the “generals” at the top, in which the workers are nothing but foot soldiers. Very good for the companies–and very much a barrier for the workers.
If the workers had organized this strike themselves, if they had known everything involved, would they accept the deal they received? We have no way to know; but what we can say is that the wage increase granted by the contract is what has already come about in a number of states, and probably soon on a federal level. Commentators expect the new Congress to pass a minimum wage increase to the same level.
In addition, the workers won’t get what they won until two years from now.
Ercilia Sandoval, one of the strikers and a member of the bargaining committee, has been diagnosed with breast and lung cancer; she was unhappy with the lag in the health insurance in the contract. She called it a “very urgent issue that I wanted in this first year. I don’t want anyone else to go through what I have gone through. . . . We’ll fight for free insurance for the entire family in the next contract. I won’t rest until I see that.”
If Sandoval reflects the sentiment of other janitors in Houston, it’s a plus–because that determination is what will win more in the future and make the union more representative of the workers’ interests.
Nov 27, 2006
Some 15,000 rubber workers went on strike at sixteen Goodyear Tire and Rubber plants in the U.S. and Canada on October 5. As a result of a merger between the old Rubber Workers union and the Steelworkers union, they are now represented by the steelworkers (USWA).
They began their picket lines after the company announced plans to close a unionized Texas plant employing 1100 workers. Goodyear is also proposing increased health care costs for active and retired workers. It proposes to bring in new workers at lower wages. These demands come on top of the 2003 negotiations in which rubber workers already made concessions, including a two-year freeze on company contributions to their pension plan.
Goodyear is a 19 billion-dollar-a-year corporation. It acts exactly like many of the largest corporations in the country, attacking the wages, benefits and working conditions of workers while richly rewarding its top executives. The 2006 Annual Meeting of Shareholders and Proxy Statement lists 32 million dollars just in bonuses to top management.
A retired rubber worker who joined the strikers at a Virginia plant’s picket line said, “These are some huge cuts Goodyear is asking for.... Management wants to see how far they can push, and now they’re finding out.”
Every single worker in the country faces the same attacks. We saw it in steel, in the airlines, in auto. The corporations don’t stop with one concession, one increase in medical costs, one plant closing. They continue pushing us backwards and will keep on doing it until we begin to stand up to them. This strike might be a start, but it is only that.
Everyone has an interest in fighting these corporate attacks, starting with the whole USWA, which has a membership of 850,000 in North America. The best way to strengthen this fight is to join it–and turn it into a fight against all these vultures.
Nov 27, 2006
U.S. Airways, which has gone into bankruptcy twice in the last four years, has made a bid to buy Delta. Delta, a much larger airline, is itself in bankruptcy.
What was the reaction in the financial world–disbelief? Shock, at the absurdity of such a thing? Demands to lock U.S. Airways executives in the loony bin?
No–the reaction in financial centers was positive! U.S. Airways stock rose 17% in the first day after the announcement. Delta bonds went up as well.
This kind of deal is perfectly ordinary in today’s economy. Just the past couple weeks have seen numerous buyouts, mergers and offers: U.S. Trust and Bank of America merged; the Blackstone Group bought out Equity Office Partners, another commercial real estate company, for 36 billion dollars. The mining company Freeport-McMoRan bought much larger Phelps Dodge for almost 26 billion. Even the NASDAQ stock exchange tried to get in on the scene, offering five billion dollars for the London Stock Exchange.
All this has nothing to do with what is needed to produce goods and services for the population. It has everything to do with enriching financial interests. This tiny proportion of the population makes a quick buck in such “mergers” while leaving the combined companies loaded with debt.
The REAL absurdity is that companies can buy out much larger companies. The only way they can do it is by floating loans. But once the buyout goes through, the financial interests engineering the buyout are not responsible for these loans–the new, combined company is! Those who put together the deal dump their debt onto the company they bought, and often turn around soon after, selling their holding interest for a tidy profit. They even have a name for this filthy scam: it’s called a leveraged buyout.
It’s the same thing with the U.S. Airways offer for Delta. Just last year, U.S. Airways came out of bankruptcy after it was bought by another company, America West, a much smaller company. This combined company already starts out billions of dollars in debt. If the latest deal goes through, the new Delta Airlines that emerges from it will have billions more in debt added on to it.
That debt becomes yet another excuse to come back and demand even more concessions from the workers. In its two bankruptcies, U.S. Airways defaulted on all its pension funds. In its current bankruptcy, Delta has so far defaulted on its pilots’ pensions; a recent law lets it “save” its other pensions by slowing its payments to them to a trickle. So Delta does not put enough money into them to actually pay the pensions! In addition, Delta froze those pensions at the end of 2005–so workers stopped earning additional benefits after that time.
All the debt taken on would pave the way for yet another bankruptcy further down the road, or at least the threat of a bankruptcy. And you can bet that the company’s workers will again be asked to pay for it with still more concessions.
Mergers and buyouts that produce nothing but debt seem completely absurd to anyone with an ounce of sense. But to these financial folks, it’s another great deal.
These buyouts mark just how deeply our hopes are being sunk by an out-of-control, fictional financial system.
Nov 27, 2006
We’re told that our pensions are guaranteed–that is, that they are covered by the Pension Benefit Guarantee Corporation (PBGC) if the company we work for ever defaults on them.
That much is true. But when a company defaults, its workers get a lot less than the full amount of their pensions.
To begin with, all retiree medical coverage is cancelled–every last bit. So are company-covered life insurance and death benefits for spouses.
In addition, any worker who retires before age 65 is hit even harder. For every month before 65 that a worker was when they retired, their pension payment is lowered. For example, if workers retire at age 60, their pension can be reduced by as much as 40%. This includes anyone who took early retirement under special deals offered by the company. Finally, current workers earn no more new pension credits, no matter how many more years they work for the company.
This is a guarantee in name only. All it guarantees is that companies can dump their pensions, leaving workers holding the bag.
Nov 27, 2006
Solo Cup workers in the Plate Department at its Owings Mills, Maryland factory just heard from their manager about an article in Forbes magazine. He wrote, “... the article does not paint a pretty picture of Solo Cup company’s current financial position.... If we all want a secure place to work in the future, then every employee needs to do their part by producing a product as efficiently as possible with as little waste as possible.”
He then points out that this one department spends $481,920 per year on paper and is less efficient than a plant in another city doing the same work. In other words, the boss is threatening the workers that if they do not become more “efficient,” their jobs will go to another factory.
Forbes, a business magazine, just reported that Solo Cup company is in trouble. Its credit rating was lowered; it took a 300-million-dollar write off, causing it to show a loss; a dozen accounting errors have been found; and debt has reached more than a BILLION dollars.
Solo Cup is the largest provider of paper products in the country. In 2004, it was second in size, behind Sweetheart Cup. Solo bought the larger company.
How could the smaller company buy the larger company? It took on an investment partner and got banks to give it 650 million dollars in loans.
Sweetheart, at the time of the merger, also had more than 400 million dollars in debt, coming from its long history of buying and merging. For example, in 1989 Sweetheart Holdings bought the former Maryland Cup Company using 300 million dollars in loans; in 1993 another management group bought the company using another 300 million dollars obtained by selling bonds.
The result of all this borrowing is a billion-dollar debt and interest payments in the past year alone of 72 million dollars to the banks.
Part of the wealth produced by the workers’ labor goes to pay off these debts. It also goes to pay the multi-million-dollar fees of bankers, lawyers and accountants.
In addition, the family that owned Solo, the Hulsemans, have paid themselves many millions more. The company was run by two Hulsemans earning more than a million dollars a year each, plus a number of sons and daughters and cousins who also got hundreds of thousands of dollars every year in “consulting fees.” One Hulseman paid a small fortune in 1971 so his wife could appear in a TV special.
Every bit of the money used for such extravagance comes from what the work force does. Yet the management tells the workers there is no money for wage increases; they have wiped out guaranteed pensions; they charge each worker more for health care and retirees get nothing for health insurance.
What lying, threatening nonsense management spouts at workers! Workers are not the ones who ran up billions in debt. We should not have to give up one concession, not one single penny, to pay for their ridiculous deals.
Let the people who benefitted from these loans pay them off!