May 2, 2005
In mid-April, executives at General Motors dropped a bomb shell. They threatened to draw down the 20 billion dollar fund that had been set aside to pay retiree health benefits if the UAW did not reopen the contract and agree to big cuts in health benefits. GM's Chief Financial Officer, John Devine, said that the company could take at least six billion dollars from the retirees' health care fund in 2005, and use it to pay GM's ordinary operating expenses.
In other words, the company was announcing that one way or another, it was going to slash GM's health care benefits, especially retiree benefits.
To justify this enormous attack, GM executives told the usual pack of lies, claiming that the company is in danger of going broke. With their next breath, the same executives bragged to investors that GM has over 20 billion dollars in cash stashed away in its bank accounts. And that's not all they have, since GM has stashed another 33 billion dollars in the accounts of its financial arm and other subsidiaries.
GM – with the stupendous resources of the biggest industrial company in the world – is not "impoverished." They are starting this new attack only because they think they can get away with it.
GM executives have UAW officialdom in their corner. UAW President Ron Gettlefinger may have said he will not renegotiate the contract. He may not have put it up for a vote, but he certainly agreed to change the auto contracts. UAW leaders already let Chrysler impose new deductibles, co-pays and restrictions on workers' medical benefits in mid-contract; they are changing rules on HMO's and preferred provider plans at GM; and they let GM cut 6800 jobs it was obligated to fill under the contract.
GM executives also know that UAW leaders already let Caterpillar drain money from the retiree medical fund. And then they turned around to argue that Caterpillar workers had to accept enormous cuts in retiree medical health benefits, along with a $270 per month premium for health care coverage – because there wasn't enough money in that fund!
None of these cuts have anything to do with the ability of the companies to pay for the retiree health care coverage. Not at GM, not at Caterpillar – just as such cuts had nothing to do with the financial condition of other big companies that are also cutting medical coverage, like the airlines and the steel companies. All these companies are owned and controlled by the same group of capitalists. They don't own just one company in one industry – they own many companies in many industries and shift money back and forth between them. These capitalists have a much bigger share of society's wealth today than ever before.
The problem is not lack of money – it's the relationship of forces between the capitalists and labor. So long as workers don't respond when they are attacked, big companies are encouraged to come back to demand even more.
GM is ready to take away retiree health benefits today because the auto workers, pushed by top UAW leaders, already let it get away with taking all those other concessions. And if GM gets away with cutting retiree health benefits, the rest of the capitalists will try to come for any other workers who still have medical benefits.
The capitalists dare to think they can deprive the countless millions of workers who produce all their wealth to go without medical care. They think we will all fall like dominoes.
That works both ways. If one group of workers resists, that can encourage others to do the same thing. The millions of workers now under attack can make those sitting in those board rooms fall like dominoes in a spectacular way.