EDITORIAL
Auto Cutbacks Signal Growing Crisis

Dec 16, 2024

The UAW had barely signed off on its 2023 contract with Stellantis before the company began to cut jobs and tear up its promise to start up the closed Belvidere plant. The contract had also promised that “supplementals” would be given permanent status. Instead, 2000 of them soon found themselves with no job at all. Another 2000 permanent workers were laid off from scattered facilities, including two Detroit Jeep plants and a Sterling Heights truck plant.

Even bigger cuts were to come. Stellantis laid off one whole shift, 1500 workers, at its Warren truck plant and announced the cut of a whole shift at a Toledo Jeep plant. The Warren plant and the Jefferson Jeep plant also had “temporary” shutdowns for several weeks.

The UAW turned its anger on Carlos Tavares, the European CEO of the Stellantis conglomerate, calling for his ouster.

Well, Tavares is now gone, pushed to resign by a management board not at all concerned by broken promises to the union, but only by the company’s broken promises to investors that profits would keep soaring.

Of course, the layoffs didn’t stop. Mobis, a subcontractor for Stellantis in Toledo, laid off hundreds of newly permanent workers, only to offer them a job—if they agreed to come back at half their pay rate.

Nor did the layoffs hit only Stellantis.

By the end of 2024, GM will have laid off nearly 2,000 workers in Kansas City and 250 part-time workers at an Indiana truck plant. It cut almost 400 workers at a Lansing Michigan plant and over a thousand engineers, mostly at its tech centers. GM had already tried to extort lower wages at its Indiana Truck plant, and seems eager to try it at Kansas City. GM also shut its Orion Township Bolt plant in early 2024, laying off nearly another thousand. GM says it will retool the plant to produce electric trucks, but that’s only a promise. Belvidere shows what promises will get you.

Ford was also retrenching on promises, delaying the opening of four new battery plants, in Kentucky, Tennessee and Michigan, along with a Tennessee electric truck plant. Ford was also cutting jobs. An assembly plant in Wayne, Michigan axed 400. Ford’s Dearborn Lightning Truck Plant cut out two shifts in April of 2024, eliminating over 1500 jobs. It shut down the remaining shift for seven weeks, from November 2024 to January 2025.

The auto industry is beginning to shake itself out—as it has done periodically, most notably from 2007 to 2009, when the contracts signed by the three companies with the UAW proved to be worth less than the paper they were printed on.

It was during those years that GM and Chrysler (now called Stellantis), using the cudgel of bankruptcy and government threats, effectively dumped the contract. Ford did the same, even without bankruptcy. Lower wages—two-tier—were set for new workers. Retirees lost the company’s guarantee of a pension and medical care. Individual paid days off were reduced. Wage increases were suppressed. Break time was reduced. Draconian absentee programs were instituted. The threat of discharge hung over every worker’s head. Production speeds took off. The numbers working in auto went down, then down again.

Auto once again is beginning to shake out, this time blaming the transition to electric vehicles for the problem. But the cuts are not just caused by the transition to electric, and they are not just at the three American companies linked by the UAW contract. Exclusively electric vehicle producers like Tesla and Rivian have no transition to engineer, but they are cutting too. So are companies in other countries, led by VW, which is closing three plants in Germany, and Nissan, which is cutting one fifth of its whole global work force. Even BYD, the main Chinese company, is cutting back in Brazil.

The fact is, the whole capitalist world is caught in the snare of a financial crisis which, ever since 1970, has gone through one shake-out after another, affecting not only one company, not only one industry, but the whole global economy. A union contract has never been protection against something like this.

GM expects to make between 14 and 15 billion dollars this year. Clearly that’s more than enough to produce both gas-powered vehicles and electric—and to continue producing vehicles that ordinary workers could afford. But GM has other uses for its profit. It needs to satisfy Wall Street’s big financial investors, the capitalist class. So far this year, GM has plowed 12.4 billion dollars into “stock buybacks,” which is a maneuver that enriches the very wealthy investors holding large blocks of stock. It has also paid them a regular dividend every quarter. In fact, more money flowed out to investors than the amount of wealth that production created.

The wealth that is created in the productive economy—that is, by the labor of workers who produce all its goods and services—does not go into activities that would improve the conditions of life of the population, nor does it improve the work lives of those who produce it. This wealth goes into the chase for more wealth.

This is the deadly spiral capitalism has trapped us in, and that we will continue to be trapped in, until the system collapses—or until the working class regains confidence in itself, until it rediscovers the power that it actually could hold in its own hands. But for the working class to do that, it needs to fight beyond what one union can do, it needs to fight in more than one company, in more than one industry, and even in more than one country. The working class urgently needs revolutionary militants, whose aim is to engage workers in wider struggles that allow the working class to gain a sense of its own power.