Jun 25, 2001
Alcoa Aluminum's main smelter in Washington state has been shut down, as have the smelting operations of four other aluminum companies on the Northwest Coast.
They weren't shut down because of a lack of buyers for aluminum –nor for a lack of workers. The big aluminum producers shut down simply because they could make more money by reselling electricity than they could by producing and selling aluminum.
Alcoa, for example, had longterm contracts to buy electric power from the federal government's Bonneville Power Administration at a rate of $22 a megawatthour. But deregulation of the electric power industry opened the road to enormous price increases. By last winter, electric power was selling on the open market at rates running between $250 and $500 a megawatthour. Shutting down aluminum production to resell electricity let Alcoa pocket the difference.
The result was an enormous increase in Alcoa's profits. Its profits in the first quarter of this year 120 million dollars - were over ten times as high as what they had been in the same period a year ago, before they started selling electric power.
Alcoa was not the only company to make big bucks when the government stopped regulating prices in the natural gas and the electric power industries.
Enron, a Texas marketing company, has made even bigger profits from the California electricity "crisis." For all practical purposes, Enron does not produce either natural gas or electric power. It simply buys and sells them. But by withholding natural gas and electric power which it had bought from the marketplace, it helped drive up the prices for these necessities - to the point that the going price for electric power was more than ten times as high this year as it had been last year.
None of this adds to production. None of it produces more wealth, that is, goods and services which the workers can buy with their wages. None of this improves the standard of living of the working people of this country.
It simply increases the balance sheets of big corporations, letting them grease the hands of politicians while they pay their executives bigger bonuses. It lets them go out and buy up other companies or throw their windfall into the stock market, driving up prices there.
These companies are not in business to produce goods and services. They are in business to produce profit. If they can do so by producing goods and services, they will do it, increasing the exploitation of their workers to turn a bigger profit. But if they can increase their profit by stopping production, they will do that also, laying off workers, pushing the economy into a new recession.
This is capitalism stripped down to its essentials: existing to make a profit. Everything else is secondary. These giant companies could care less what they do to the population or even to their own economy.
There is no reason the working class should pay for this. No company which is making a profit should be allowed to lay off workers - or to cut back on jobs, which is simply a way to layoff the next generation of workers before they are hired.
The big corporations create the problems that working people face. Let their profits be taken and used to overcome the problems.