EDITORIAL
GM Cuts Jobs to Pay off Wall Street

Dec 10, 2018

The following article is the editorial from The Spark’s workplace newsletters, for the week of Dec. 3.

General Motors is closing down five plants and laying off 14,500 workers.

That announcement—shocking because it comes in the midst of so-called “good times”—was justified by one lie after another.

No one wants cars, says GM. Not true. In 2018, six million cars will be sold. The problem isn’t car sales. The problem for GM and the other two “American” companies is that cars produce less profit than do trucks and SUV’s. GM, Ford and Fiat Chrysler have now decided to hand over the car market—except for the biggest, most profitable luxury models—to Japanese companies.

Remember, the three companies did this once before, when they ceded the market for small cars to Japanese and German automakers.

Ford, GM and FCA are now throwing away the whole car market. They don’t give dealers many choices, and they push consumers to “step up” to an SUV or even a truck—all the while counting out more profit.

GM expects these job cuts to provide it with 4.5 billion dollars more profit by the end of 2020.

But, says GM, the auto industry is changing rapidly, and GM needs to accumulate more profit to invest in electric cars and self-driving vehicles. Well, if that were the issue, GM already could have been investing—and many times that much. It had the money, but instead GM gave it away to Wall Street. Over the last three and a half years, GM bought back stock to the tune of 10.6 billion dollars, and put in motion plans to buy back almost four billion more—14.5 billion dollars.

Stock buy-backs do nothing but enrich the stockholders who get the money, and they enrich the stockholders who hold onto their stock, whose price is driven up. They are an enormous gift, added to many billions more GM paid out in dividends in the same period. All told, GM gave away 20 billion dollars to stockholders.

GM is not cutting production in order to invest in the future, it is cutting production in order to go on enriching stockholders right now.

If anyone still believes this lie that we are all stockholders—because we have a couple hundred shares of stock in our 401(k) accounts—pay attention to this: 90% of all stock is owned, often indirectly, by the richest 10% of the population. Most of it is held directly by the big Wall Street banking and “investment” firms.

No, GM is not cutting jobs to prepare for a high-tech future. It is answering the demands of Wall Street for still more money. Ford did it by paying out consistently high dividends, even when it had to borrow money to do it. If you owned a million dollars in Ford stock ten years ago, you are worth five million today.

All the companies are doing it. This year, the 500 biggest companies will hand over almost a trillion dollars in stock buy-backs—and almost as much more in dividends. These are pure gifts to people who do nothing but accumulate more money by owning money.

By the way, GM will certainly use the threat of these closed plants to extort still more wage and benefit concessions in the contract negotiations coming up this September. Every concession will mean still more profit—not only for the auto companies, but also for the benefit of Wall Street.

This is the world we live in today—a capitalist world, where production is carried out for profit, not to satisfy the needs of the population. It is a world where labor creates value, but doesn’t benefit from most of that value. It’s a world where those who do the work are denied a decent life, so the value they create can be stolen and handed over to the very tip top of capitalist society.

This is the world we live in—and it will go on being our world until the working class gives up the false hope that we can accept it and still live well. No, we can’t. And we won’t be able to live well until workers begin to move, fight back, refuse every indignity, and start tearing up this outrageous world.