The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

GM is NOT broke, it's just greedy

Jun 20, 2005

Day after day, the media push a steady drumbeat about General Motors – what bad shape it's in. They even throw out the dreaded possibility of a bankruptcy. And Wall Street has jumped onto the bandwagon, putting GM bonds into its "junk bond" category.

It's nothing but a propaganda campaign, aimed at getting GM workers to give up medical benefits they carried out hard fights to win in the past.

Nothing but propaganda, and a pack of lies!

General Motors is NOT in bad shape, it is NOT going broke – in fact, it has plenty of money. In ready cash, GM and its subsidiaries have 55 billion dollars. They have full lines of credit with all their major banks. No one has cut them off – despite all the talk about "junk bond" status.

GM pays dividends, every year, $2 a share to other capitalists, like Kerkorian, who just sit on their millions of shares and wait for the money to pour in. GM pays its executives richly, very richly. In the past five years, Bill Wagoner, GM CEO, got 57 million dollars, not to mention the tens of millions more to other executives. If this is a company going broke, they sure have a funny way of showing it.

GM started all this bull about going broke after showing a loss in only one quarter. (Need anyone be reminded that the auto industry is cyclical and that there are always quarters or even full years, when the companies roll up losses?) Last year's profit for the full four quarters was 3.7 billion dollars. Over the past five years, GM has cleared total profits of at least 20 billion dollars. And this is according to its own figures, not counting all the money it stowed away by "creative" book-keeping.

Here's another testimonial to GM's good financial health. Kirk Kerkorian just offered to buy up 28 million shares of GM's stock, paying out 868 million dollars to do it. Was Kerkorian, who is personally worth around 11 billion dollars, trying to buy into a losing proposition? No – he knows that GM is a good deal, despite all the bad publicity. Such a good deal that 3 days after the UAW said it would help out on health care, the stock jumped and he made 300 million dollars. In just three days.So don't let them hoodwink us. GM is not a poor company, it's super-extra rich. And it's not asking for concessions in workers' medical coverage because it can't afford to pay.

It's demanding concessions because it believes it can get away with it.

Nobody has taken on GM – or other big companies – in a real fight for years.

Leaders of the UAW have argued for years that the workers' best chance of defending themselves comes not in opposing the company, but by joining in a friendly partnership with it. The end result of this partnership has been that GM has done well, very well, while workers gave up jobs, pay, benefits and rights. So, yes, this greedy company now thinks it can take whatever it wants – even something that workers assumed they would always have, medical coverage.

This is not just a question of GM – it's the way all the big companies are thinking today, and for the very same reason. The working class has not stepped up to respond when the attacks come down. And the capitalist class has taken full advantage of the workers' hesitancy.

That's why the gap in society between the rich and the rest of us is more extreme than at any time since the Great Depression. Profit levels – returns on investments – are higher than any time since just before that same "Great" Depression. There's a much bigger gap between CEO pay and workers' pay. Every way you slice it, the ultra-rich have more than ever, because workers have let themselves be suckered into giving up so much.

GM, like all the rest of the bosses, will keep pushing to take more, until workers say "NO!" What's good for GM and the rest of these monster corporations is NOT good for the working class.

Of course, just saying "NO" won't stop these greedy monsters, but it at least starts workers going in the right direction.