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
Aug 20, 2007
For over 10 years, housing prices across the country were pushed up at a record pace. Government officials and media “experts” all said that the higher prices were an indication of economic health and general prosperity–even though wages and salaries were stagnating and declining.
In reality, the increasing home prices only masked a worsening economic crisis. Instead of investing profits in production, most of the biggest companies in the country, from GM and GE, to the biggest banks, financial and insurance companies, simply fed a record housing bubble. As prices rose, such companies made enormous profits by financing bigger and bigger mortgages. Then they made even more profits by selling and buying and again selling those mortgages each time at a higher price–that is, speculating. Many executives running this con game pulled in bonuses of hundreds of millions and even a billion dollars–in just one year!
In fact, it was all a big pyramid scheme, and it depended on a constant supply of fresh, new homeowners to keep from collapsing. But over a few years, the housing market became saturated. Companies began to suck in those who could least afford the outrageously high housing prices on the market. The companies roped them in by selling so-called “sub-prime” mortgages that they advertised as an “easy and affordable” way to own a home.
In fact, the mortgages were really like ticking time bombs, delayed to go off after a couple of years, as the “low” initial payments reset at 50% or even 100% higher levels. Often, people weren’t told what was in the fine print. And if they did find out, companies made all kinds of assurances that mortgages could always be refinanced because of rising housing prices.
But nothing of the sort happened. Over the last year, housing prices began to fall–just as the first wave of sub-prime mortgages began to have their rates “reset.” This left many “subprime” homeowners with no options but to default.
The vast majority of people losing their homes today are still working; they could work 24 hours a day, and still not make the new payments.
This year, defaults on mortgages are expected to be twice as high as last year’s, with close to a million households expected to lose their homes. A much higher number of defaults and foreclosures are expected next year, as even more subprime mortgages reset. And these defaults can be only the leading edge of a much bigger, full-fledged real estate bust, leaving countless millions at risk–a gathering human catastrophe.
Yet no government agency has lifted a finger to pull together an immediate rescue, and a plan to forestall what could very well happen to all these people thrown out of their homes.
No. The government is moving to rescue the very companies that put together the pyramid scheme and profited so greatly. The Federal Reserve has begun to inject massive amounts of cash into the financial system to prop them up.
In other words, the government is taking the workers’ taxpayer money to reward the very companies that victimized so many people–so these companies can get back on their feet and do it all over again.
The banks and their government should be tossed out with the garbage.
Aug 20, 2007
L.A. county officials shut down King hospital’s ER last Friday. The rest of the hospital is supposed to be closed within the next two weeks.
Was the quality of care at King poor? Yes. But now there are only four county hospitals available for L.A. county’s more than two million uninsured residents–which means things will get even worse.
Some community activists say they will fight for a new, and better, hospital. Who could disagree with that! In fact, we urgently need not one, but at least one dozen new, good hospitals in L.A.!
And it’s also true that we’ll have to fight to get them. That’s exactly where King hospital came from: out of the Civil Rights Movement, and the 1965 Watts uprising in particular.
Aug 20, 2007
After the great Mattel recall story hit the news, the Washington D.C. district attorney’s office finished filing a dozen cases against landlords who had lead paint problems. In 2006, doctors had found high levels of lead in the blood of about 300 children in Washington D.C.
Lead paint was banned for use in houses in this country in 1978, but owners and landlords were not forced to remove what already existed in older buildings.
So in one city, thirty years after the law was passed, there are still buildings covered in lead paint, still young children who will be damaged all their lives.
Throughout the country, an estimated 350,000 children have elevated and dangerous levels of lead in their blood, according to the Center for Disease Control.
China didn’t poison these children. U.S. capitalism did.
Aug 20, 2007
Last week, toy-maker Mattel recalled almost 19 million toys, blaming Chinese manufacturers for lead paint on the products. Lead paint is particularly dangerous for young children because it interferes with the development of their brain.
About 80% of children’s toys are made in China. And the reason is obvious: costs for these products made by near slave-labor in China are lower. Cheap cost is also why toy manufacturers use lead paint. Lead makes the paint brighter, more long-lasting, water resistant and is cheaper than other sources of color pigment.
Faced with all the bad publicity, Mattel is today pretending it had no idea that lead paint was used on the toys.
No idea?
Mattel has had the same Chinese supplier for 15 years. If Mattel didn’t know what that manufacturer was doing, that’s because Mattel didn’t want to know–so long as the profits rolled in!
Aug 20, 2007
The Bush administration announced a crackdown on “illegal” immigration. Since Congress failed to pass the anti-immigrant legislation before it earlier this year, Bush says his plan is meant to enforce existing laws. The plan includes 26 measures such as increasing border fencing, vehicle barriers and Border Patrol agents, and strengthening a system for employers to check workers’ legal status.
It increases fines on employers for “knowingly hiring illegal immigrants.” At the same time, it offers a “safe harbor” to employers who receive “no-match” letters from the Social Security Administration if they tell the workers to correct the mistakes.
These measures are a further attack on immigrant workers. Just like the various local laws that have been passed targeting illegal immigrants. Waukegan, Illinois, for example, passed a law allowing the local police to initiate deportation proceedings against convicted felons.
The best response against these attacks is to demonstrate, as some people have. And it is not only immigrants who have an interest in protesting.
At the same time it is important to understand what these laws are intended to do. These changes are not aimed at expelling 13 million undocumented immigrants.
That’s not to say that this government would not do so under different circumstances. It already expelled a large majority of the Mexican population twice in the past, in the 1930s and the 1950s.
But today, too many companies want low-wage immigrant labor.
These measures are meant to allow the bosses to use that labor, and at the same time, to give them the means to keep undocumented immigrants frightened and cornered. These laws are meant to make it clear to immigrant workers that at any moment, if they speak out against their wages or working conditions, their bosses can turn them in and have them deported.
Full legal rights for all immigrant workers and their families–that should be the position of every worker. It is the best way to ensure that immigrants do not have to be afraid to fight for higher wages and improved working conditions. And it solidifies our ties as one class, allowing us more easily to fight our common enemy.
Aug 20, 2007
“Yesterday we went from a tragedy to a catastrophe,” Utah Governor Jon Huntsman declared on August 17, the day after three people were killed and six others injured while trying to rescue six miners trapped in the Crandall Canyon coal mine. In fact, this mine was a “tragedy” and a “catastrophe” waiting to happen because of what the mine owners did and what government officials didn’t do.
The owners were using a method of mining called “retreat mining.” Retreat mining allows mine operators to get the maximum amount of coal out of a deposit without having to pay for very much roof bracing and pinning. But it is also very dangerous. Some of the coal itself is used as pillars in the mine to support the roof. After all the rest of the coal in a seam has been removed, these coal pillars are also removed, allowing the roof to cave in–either immediately or later.
Sometimes the coal pillars and walls are not strong enough to support the mine roof to begin with. They can collapse without warning while miners are working in the area. In addition, collapses in one area of a mine–either planned or unplanned–can trigger unexpected collapses in another area.
Crandall Canyon was a particularly bad location to use this method. The mine extended four miles into the side of a mountain. The collapse that trapped the six miners occurred at a depth of about 1500 feet. The immense pressure exerted by the mountain had been causing small collapses or “bumps,” as they are called, before the final collapse. In March of this year, two other parts of the mine had already collapsed.
Despite all this, the Mine Safety and Health Administration had not shut the mine down. After the March collapses, they even approved the continued use of retreat mining in the part of the mine that has now collapsed–despite the fact that the mine had been cited 325 times since January 2004 for violations of safety rules and regulations.
You might as well call these deaths pre-meditated murder, since those responsible for the mine knew very well the dangers of what they did.
Aug 20, 2007
The following is an article from the French Trotskyist group, Lutte Ouvrière (Worker’s Struggle), that appeared in the August 17 issue of their newspaper. The article provides an overview of the U.S. real estate crisis, while referring to the impact of the crisis on the French and European banking system.
Last week, the world’s stock markets got a lot of media coverage. The sharp fluctuations in stock prices created fear that a panic could lead to a catastrophic crisis.
In the beginning, they told us it was limited to U.S. real estate and people in other countries didn’t have anything to fear. Then there was a week of turbulence on stock markets throughout the world. Prices collapsed after jumping up and down for some weeks.
Today, the commentators try to sound reassuring, explaining that massive injections of funds by the central banks will restore stability to the situation. But they say little about what led to this crisis, and nothing about what kinds of consequences working people face, even if this crisis is forestalled for awhile.
The crisis began in the U.S. in “sub-prime” mortgages, among certain companies specializing in making these loans. As long as the real estate market went well, in the capitalist sense of the term, that is, real estate prices continued to go up, there was no risk for the companies that made the loans. If the buyer fell behind on mortgage payments, the lender could either offer an additional loan or take back the house, and make a big gain on either operation.
But the real estate market isn’t unlimited, especially in a society that creates many more poor people than rich ones. And when the price of real estate showed signs of weakness, companies that specialize in “sub-prime” mortgages experienced difficulties. On April 2, New Century Financial, the number two “sub-prime” lender in the country, declared bankruptcy. On August 10, American Home Mortgage sought bankruptcy protection.
The crisis spread beyond the “sub-prime” specialists. Many banks, including those based outside the U.S., had a stake in the “sub-prime” mortgage market. As a result, they found themselves at risk.
It’s difficult to know which banks are affected. Infamous “bank secrecy” covers all their deals with an impenetrable veil. However, the French business paper Les Echos on August 13 published a list of the banks that are “most exposed” to the current turmoil. This list includes not only U.S. banks, but Deutsche Bank, Credit Suisse ... and BNP, a French bank. BNP happens to be one of the creditors of the now bankrupt American Home Mortgage. BNP’s managers assured the public that it is owed “only” 40 million dollars. But it’s obvious that BNP’s problems are bigger than that, since it had to freeze the operations in three of its investment funds
No one can foresee the long term consequence of this crisis. The so-called economic experts can’t see it. They didn’t see the crisis coming, and not because they are incompetent. By its very nature, the capitalist system is unpredictable.
Perhaps the only consequence of the crisis will be to lower the standard of living of working people, if they don’t respond collectively to such attacks. But the “sub-prime” crisis can also lead to a generalized bank crisis. If the big banks go bankrupt, they will shut their doors on the noses of private individuals who try to withdraw their meager savings. And this could lead to a general economic crisis. The turbulence in all the stock markets over the last several weeks reflects the fear of the capitalists that industry’s rate of profit will drop. They know that all sectors of the economy are linked.
Could this crisis result in a catastrophe? It’s possible. The great economic crisis of 1929 came after a period when the stock market rose to record levels. Then over a period of months, the implosion of the speculative bubble brought about the greatest economic recession that capitalist society had ever known, which then resulted in World War II.
Humanity won’t be spared from this type of catastrophe so long as the capitalist system continues. At its birth, capitalism was certainly a factor for economic progress–even though it came at a high cost, the pillage of entire regions and the crazed exploitation of the working class. But for a long time, the capitalist system has been worn out.
The capitalist marketplace, in which supply and demand is dominated by the quest for maximum profit, is an irrational system. People’s lives and the very future of the planet depend on how a small handful of rich people place their capital in order to enrich themselves still more.
Aug 20, 2007
On August 2, Russians from a submarine planted their country’s flag more than 12,000 feet below the ice of the North Pole. The Canadian Prime Minister responded by going there three days later. The Canadian Foreign Minister declared that “the sovereignty of Canada over the Arctic is unquestionable.” The Canadian government announced it would invest 6.6 billion dollars over 25 years for the construction of a military base in the region. The U.S. also has an eye on this region of the world and foresees an intensification of its exploration of the ocean depths. The Danish and Norwegians are sending scientific expeditions there.
The sudden interest in this region has several reasons. Scientists estimate that global warming will make the ice cap disappear between now and 2050. At that point, the riches found today under the polar ice cap could become exploitable. Some estimates suggest the Arctic has the equivalent of 25% of the world’s oil and gas reserves. No wonder so many countries want to get a foothold on this uninhabited ice.
None of these governments proposes to do a thing about global warming, but the thirst for profits reawakens old national antagonisms. A U.N. commission will rule on where each country may have its economic zone of exploitation in the Arctic–but not until 2013. So these governments sniffing around the Arctic Ocean are restless. Oil exploration cannot wait.
These maneuvers indicate polar bears won’t be the only victims of global warming in the years to come.
Aug 20, 2007
On August 5, several hundred survivors of Nazi death camps, along with younger demonstrators, marched to the office of the Israeli Prime Minister Ehud Olmert. These survivors, most in their eighties, protested indignantly against the government’s latest vote on their pensions. The level of financial support was so low that the poorest among them could not survive.
The Israeli press has been reporting the difficulties faced by a number of these survivors. A third of them, about 80,000, live at the poverty level. They must choose between eating properly and paying for their medicine. An Israeli journalist wrote that Israel is, “the country in the world where Holocaust survivors are the least well treated.”
The supplementary aid bill just passed by the Israeli parliament amounts to 27 million dollars for 120,000 beneficiaries, or less than $20 a month each. Some organizations called it an “insulting handout;” others saw it as a scandalous provocation.
Cynically, Olmert announced that benefits would rise to 75 million dollars in 2011–when most of these survivors will probably be dead.
The protests of the survivors led the prime minister to announce the aid would be recalculated. But that doesn’t change the scorn and indifference of dozens of successive Israeli administrations toward the survivors of the Nazi death camps. These same Israeli administrations were always ready to claim that the memory of Nazi genocide is a pillar of its national identity.
The Israeli leaders remind the population of the martyrdom of the millions of Jews during World War II, as a way to attract national and international opinion behind their policies. So long as it doesn’t cost too much for the Israeli ruling class.
Scornful, insulting, violent toward the Palestinians, the Israeli rulers have the same attitude toward the most impoverished, even when they are Jews, and survivors of the Holocaust.
Aug 20, 2007
According to a new U.S. military report, the suicide rate in the army is the highest it’s been in the 26 years since records were kept. In 2006, 99 active duty soldiers killed themselves. More than a quarter of these suicides occurred among troops stationed in Iraq and Afghanistan.
The way the military presents the figures hides the fact that the number of suicides is actually higher. This report looks only at active duty soldiers in the U.S. military today. Where are the studies that track the lives of the nearly one million soldiers who left the military after being in Iraq and Afghanistan?
What will be the actual suicide figures down the line, over the next number of years? What we know from the experience of Viet Nam is that suicide figures will go up many times higher.
The study concludes that the suicides were caused by the failure of the military to provide adequate mental health care facilities–as though you could wipe out horrific memories with a chat with a psychologist or a few pills.
Of course the army would like to believe that they could dope people up enough to get them to be willing to carry out daily atrocities.
But a little chat can’t wipe out memories of Abu Ghraib. Or seeing children killed. Or being the one to kill the children. Or seeing civilians killed at a checkpoint. Or driving a truck ordered to run over children. Drugs can’t wipe that out, although we can be sure that alcohol use and hard drug addiction will skyrocket among soldiers, as it did after Viet Nam.
The current high suicide rates are one more indictment of the war, a reflection that some soldiers don’t feel they can live with what they did.
But there are other soldiers also believing they can’t live with it, who come back to oppose the war, to reveal all they know about it.
They put their bad memories to use to try to stop the war.
Aug 20, 2007
On July 30, several organizations published a report denouncing the living conditions of the Iraqi population. The Iraqi population is considerably worse off than it was before the U.S. invasion.
The Iraqi people are being massacred. In July alone, 1,652 civilians were killed, a terrible number. The reality is undoubtedly a much higher number killed. Forty-three% of the Iraqi population lives in great poverty. Four million “need food and medicine,” according to the July report. Two million are refugees inside Iraq itself, forced to leave their homes to escape the violence of the civil war. More than two million other Iraqis are refugees in the neighboring countries of Syria and Jordan.
Almost three fourths of the population has no drinkable water. Homes still connected to the electricity grid get only two hours of power a day. Infant malnutrition, which was 19% in 2003, has now reached 28%. Access to schooling has declined so much that several hundred thousand children have no education at all.
Iraq has become a country without jobs, where over half of all men and women are no longer paid for their work. Forty% of professionals–engineers, teachers and medical personnel–have left Iraq.
This war has already killed more than 650,000 Iraqi people. The U.S. claimed it was getting rid of the Iraqi dictator in 2003. Now the Iraqi people face spreading chaos and merciless rival armed bands. What U.S. imperialism has brought the Iraqi people is the civilization of the cemetery.
Aug 20, 2007
An Army-funded study, printed in the August issue of Journal of the American Medical Association, shows a considerable increase in child neglect and abuse in military families when one of the parents is deployed in Iraq or Afghanistan. The study covered a 40-month period, from September 11, 2001 through December 2004.
It found that when a soldier is in a combat war zone, the stress level of the parent who stays behind, usually the wife, becomes much greater, sometimes resulting in maltreatment or neglect of the children. The rate of neglect–when a kid is left alone or unsupervised, or their basic needs for food and cleanliness are not adequately met–was almost four times greater during times of deployment. The rate of physical abuse was almost twice as high.
Some Army wives who were told about the study were not surprised. It brings to mind that several times during these wars, when generals have called for meetings at Army bases to inform families of an extended deployment or to prepare them to expect another round of deployment, the general’s voice was sometimes drowned out by outraged moms and older children who let their anger be known.
The effects of these terrible wars will go well into the next generation; above all, most acutely for the children of Iraq. But it should come as no surprise that the war goes not only through U.S. soldiers, but also through their families.
Aug 20, 2007
“Family values,” say the politicians, as they begin their campaigning. But for working women who have newborn babies? The Family Medical Leave Act says women can have 12 weeks off, without losing the job–but only if they can afford to take it off WITHOUT pay. Companies in the U.S. have no obligation to pay for any maternity leave, unlike in most other countries.
Austria, France, Germany, Spain, Netherlands and Poland pay 100% of a mother’s wages for four months. The other rich countries pay between 60% and 90% of wages for maternity leave. Only Australia and the U.S., among rich countries, pay nothing.
It’s not a question of money. A number of poor countries pay wages for a whole year–Russia, Ukraine, Albania, Bulgaria, Latvia and Cuba.
U.S. policy is just like the policy in some of the poorest countries on earth: Lesotho, Swaziland and Papua New Guinea have no paid maternity leave.
Politicians support a woman staying home with a newborn child–but only when families have enough money to pay for it. In the U.S., the citadel of capitalism, nothing gets in the way of what businesses want, not even a newborn child!
Aug 20, 2007
Just a few months ago Northwest Airlines was claiming to be bankrupt, using the courts to legally junk its union contracts and imposing big cuts in jobs, pay and benefits on its entire workforce.
Today, it cut a deal with private equity firm TPG to buy Midwest Airlines for 450 million dollars, with the possibility of buying out TPG and taking over Midwest completely at a later date.
Where did Northwest get the money? Wasn’t it supposed to be nearly broke?
Aug 20, 2007
After protests on their behalf turned the spotlight on the Taylor police department, charges were dropped against Devin Plummer and Franklin Smith in the shooting death of Wendy Meinke. Plummer and Smith are both black; Meinke was white.
Meinke, 38, had intervened in an argument involving her 22-year-old son on the night of July 30 when shots were fired. She was hit by a stray bullet and died several hours later.
Instead of finding the person who had fired that bullet, the cops rushed to grab up anyone who even vaguely fit the description they got from some witnesses: a black man with braids and facial hair. That’s how Devin Plummer and his friend Franklin Smith got grabbed: Plummer had braids.
Plummer, 17, and Smith, 18, had been out celebrating with friends that night; they were to leave for college out of state the next day.
No gun was found; and police refused to say whether they had conducted a powder test on Plummer or Smith’s hands to see if they had fired a weapon. Still, they were held for two weeks on this flimsy evidence, while police tried to extract confessions out of them. Plummer’s mother said she heard her son shouting and screaming from the interrogation room on the first night.
Later, a 14-year-old youth was arrested in connection with the same shooting although he was never charged with anything.
By rushing to grab the first people they could, the police rolled over the lives of four families: first, the family of Wendy Meinke, since her killer still remains free. And second, the families of the three young men accused of a crime they didn’t commit.
For two weeks, Wayne County Prosecutor Kym Worthy continued to defend the Taylor police in the case, saying the evidence was there to prosecute.
But on Monday August 13, dozens of family members and supporters demonstrated outside the 23rd District courthouse in Taylor; the next day, another protest was held, this time at the Wayne County courthouse in downtown Detroit.
These protests shone a light on the total lack of physical evidence linking Plummer and Smith to the crime. And they forced the police to reveal that there WERE powder tests, and they showed that neither one had fired a weapon. The railroad job done by the Taylor police was brought out into the clear light of day. Charges were dropped, and the two young men were released. A couple days later, the 14-year-old youth was also released.
People who want justice from this “injustice system” have to be willing to stand up for themselves and for each other in their families and communities.
Aug 20, 2007
Jazz drummer Max Roach died August 16 in New York. Roach was a jazz pioneer and an active and outspoken opponent of racism.
Roach was one of the originators of bebop. Bebop was a distinctly new form of jazz developed in the early 1940s, especially in the clubs on 52nd Street in New York. One of the main differences between bebop and earlier jazz lay in the rhythmic patterns created by drummers like Roach and Kenny Clarke.
The New York bop scene was close to home for Roach, who grew up in Bedford-Stuyvesant. Roach had already played in Duke Ellington’s Orchestra as a teenager.
Roach collaborated with other inventors of bop, like Charlie Parker, Dizzy Gillespie, and Miles Davis. He was known for his frequent use of rhythmic “bombs”, and his method of riding the cymbals made his sound easily recognizable.
Roach went on to become a band leader in his own right, including for a period with trumpeter Clifford Brown. Later on, Roach branched out musically collaborating with everyone from the Boston Symphony, to the Alvin Ailey Dance Company to rapper Fab Five Freddy.
Roach was not content to separate his art from his politics. He made it clear that art must express what is happening to the population and take the population’s side. Roach and Charles Mingus in 1958 organized what they called a rebel festival to protest prejudice they saw in the selection of musicians for the Newport Jazz festival.
When asked to contribute to the hundredth anniversary commemoration of the Emancipation Proclamation, Roach composed a suite entitled, “We Insist!–Freedom Now.” Abbey Lincoln, whom he later married, performed the vocals on the suite. Oscar Brown, Jr., who wrote the lyrics for the piece, broke with Roach because Roach favored the ideas of Malcolm X over those of Dr. Martin Luther King, Jr.
Roach paid a price for his outspoken politics. So long as he was just one of those “crazy be-boppers,” as bebop musicians were portrayed by the critics at the time, Roach was okay. But using his music to speak out put him on the do-not-play list. Like many jazz musicians, Roach was more well received, both by audiences and critics, in Europe than in the U.S.
The jazz world, and the world in general, has lost one of the greats with the passing of Max Roach.
Aug 20, 2007
On August 6, 18-year old Aaron Harrison was murdered by a Chicago cop, shot in the back. Only minutes before, he had been standing with friends on a corner in the West Side black community, playing around and dancing. When two squad cars drove up, and police got out, most of the young people ran away, including Harrison.
Franella McDaniel, 26, who was on the corner with Harrison, told the press, “they’re terrified of the police over here. They run from them.” It’s understandable why people run. This year Chicago police have already shot to death 10 people, all in poor areas like the West Side, most of them black.
Four cops chased Aaron Harrison through an empty lot, across an alley and into another dark lot, where one of the cops shot him in the back.
After he was gunned down, the police claimed he had a gun. But, as everybody well knows, cops come prepared with a throwaway to back up their claim. Who in Aaron Harrison’s neighborhood believed it?
In fact, this murder-by-cop was so blatant that many people marched to the local police station after the shooting. Pushed and insulted by the police, some in the crowd responded with bottles, rocks and bricks, and smashed squad car windows. To prevent a light from being shone on what they did, the police smashed two cameras of a Chicago Tribune photographer. In the following days, there were small but angry marches of around 100 people.
The police tried to justify the shooting by releasing Aaron’s record–arrested 13 times by the police, with only one conviction on a lesser charge of possessing a controlled substance. Thirteen arrests, but only one trial–and what does that prove? Only that cops had been harassing young Harrison, just as they harass young black men as a matter of course.
One protester wore a T-shirt saying, “Danger. Police in Area.” It expressed a widespread sentiment in the black community, shared by the near thousand people who attended Harrison’s funeral.
The other widespread sentiment, according to one resident, was “rage.” With good reason.
Aug 20, 2007
Ford, GM and Chrysler tell us they are losing money. And they threaten they could go bankrupt if they don’t get worker concessions.
It’s a bunch of bull!
The auto business goes in cycles. Stacked up against the few bad years are many good ones. Even if the companies lost money in 2005 and 2006, as they claim, they made tons during 12 years before that. Chrysler reported 10 good years, Ford had 11 and GM had all 12 years profitable. Over 12 years time, the three companies rolled up over 133 billion dollars in profits!
Did the auto companies plow these profits back into design, engineering and modernization? NO! Did they put it into the funds for healthcare they owe the workers? NO, again! "Billions were spent each year in stock repurchase programs... provided liquidity [that is, cash] for institutional investors." So wrote Maryann Keller, analyst and auto-supplier board member.
The companies don’t have financial problems. Their real problem is how to hide their wealth, so they can carve out still more concessions from the workers.
The companies say they will take all production to China or elsewhere, if U.S. workers don’t give up concessions.
Companies build plants in countries in order to market vehicles there. But, as the Wall Street Journal said on July 31, "Overseas profit margins tend to be razor thin, despite low production costs. Why? Because their markets are small.
The Journal quotes an analyst for Standard & Poors: "GM can’t rely on growing outside the U.S. alone. Their key to returning to long-term profitability is the U.S."
Why did the Japanese companies come here? Why are the German companies building plants here? Why are even Russian companies trying to buy up auto parts makers? Because here is where the money is. The vast U.S. consumer market allows automakers to sell over 16 million vehicles per year for up to 10 or 15 thousand dollars’ profit–each.
The threat to move overseas is just a bluff–to extort more concessions from the workers.
U.S. companies didn’t lose market share to the "transplants’ from Japan and Germany. They deliberately gave it away to the "transplants": first, the lower-profit small-car market; and now, fleet sales, once a staple part of their mid-size car factories. The U.S. companies targeted and tried to monopolize the high-end, luxury car or pick-up and SUV markets, with profits per unit running to $15,000.
They shrunk their own market share so they could take money out of autos and gamble it in financial markets–such as sub-prime mortgages! GMAC, through a subsidiary, gambled heavily in this area. Now it’s losing big time there.
If workers don’t resist the demands for more concessions, the companies will take more of the wealth workers create in production to put it into still more speculation.
Auto workers may have better wages and benefit than other workers–but they are steadily and surely losing them. To sit back and let the companies take things from you, just because someone else is in worse shape, only guarantees that you, too, will soon be in that same bad shape.
Union leaders have been avoiding fights, and where did that get auto workers? Retiree medical care has been cut. Active workers have given up $1.52 an hour in cost-of-living increases and 83 an hour from the 2006 scheduled wage increase. Local agreements have been ripped to shreds, the intensity of production has gone up, and discipline got worse.
Auto workers once gained new ground–better wages, more benefits, shorter work time–and other workers followed after them.
No one got it without a fight. The only thing you do when you don’t fight is lose.
The Big 3 would impose 48 hour work weeks with no overtime–if they could. They would get rid of lay-off protection; they would drastically scale back what they owe to retirees; they would cut wages in half and get rid of all benefits for new hires–if they thought they could get away with it.
They don’t do it openly because they know they could lose.
The auto bosses, with the help of top union leaders, may have put big concessions over at Delphi–but they didn’t do it easily. They didn’t get all that they wanted. And they had to give up things they didn’t want to give up–for example, to make the temporary workers permanent, to offer big buy-outs to other workers, etc.
The struggle of workers against the Delphi concessions may not have erupted out into the open. But, carried on plant by plant, line by line, work group by work group, workers demonstrated their unwillingness to just roll over and play dead. GM had to go slow, because of a fight led by a small determined group of militants in Delphi plants.
The same power came out when GM and then Ford attacked retirees’ medical insurance. Even a surprise-attack vote at GM wasn’t enough to prevent two in five workers from voting no–and then spreading the word about the rotten deal. When the UAW took the vote to Ford, it practically lost it–or even maybe did lose it. Even the official count admitted it had passed by only 81 votes.
Why didn’t UAW leaders and Chrysler bring the same concessions vote to the Chrysler workers? Because they knew the concessions would have been defeated. And that defeat would have been in the open, for everyone to see.
Past UAW president Doug Fraser said, "the vote at Ford was scary." Not to someone on the workers’ side, it wasn’t! It was full of hope. But for the bosses’ plans, it was scary, yes, it was.
There are other examples. The rush to put temporary workers into major plants cooled considerably when the Belvidere Chrysler temps rose up and cried "Fraud!"
Every time some group of workers resists, even if they don’t stop every attack, they are letting the companies know they could have a problem.
The auto companies may be powerful. But the workers have already shown a bit of their own muscle. If they decide to really flex their muscles, the power that workers have over production, they can make the companies step back.
There is no reason to give up a single concession to companies rolling in money.