GM and Ford:
Rich Companies, Playing Poor to Steal Even More

Jan 30, 2006

General Motors and Ford Motor Company are in the midst of a full-court press to create an aura of crisis in their companies. GM claimed a loss of 8.6 billion dollars for 2005. Bill Ford himself actually stopped Ford’s production lines for an hour and a half to tell workers he intended to close plants and lay off thousands of workers between now and 2012.

General Motors was extra inventive in its bookkeeping. By entering into its books every conceivable “charge,” including “charges” for closing plants that might be closed in the future, GM could announce an enormous loss. On paper.

Bill Ford had the harder job, since his company just reported a $2 billion profit for 2005, following $3.5 billion profit in 2004. A little more difficult to persuade workers that the company is nearly bankrupt!

If GM and Ford face a problem, it is not in their cash flow nor on their balance sheets. Their problem is that their campaign to steal even more money from workers’ health care and pension funds has run up against some resistance–more resistance than they will admit!

And their ally in this campaign, the leadership of the UAW (United Auto Workers), is up against that same resistance. The UAW could only report a vote of 61% in favor of the new concessions at GM–despite rushing the vote through, despite misleading and incomplete explanations, despite very loose voting procedures. No one believed it was the true vote.

And when the following Ford vote was reported as passing by only 51%, most workers were convinced Ford workers had in reality turned the concessions down flat.

Now the companies’ problem is how will the union get approval for the same concessions from Chrysler workers? Chrysler is boastfully profitable, and sentiment on the shop floor is so strong, that one-third of the local officials were forced to register their opposition to concessions.

Faced with the workers’ level of resistance, the corporations have put together a far more elaborate “crisis” dog-and-pony show. But if anyone is inclined to believe it, they should look at the actions of billionaire Kirk Kerkorian. Kerkorian has made a career of amassing billions of dollars of wealth. He’s not someone to be caught investing foolishly. Last year he bought 56 million shares of GM; sold 12 million in December for tax purposes; and in mid-January bought 12 million again, to hold 9.9% of GM, indicating he wants to buy more.

Or consider that on the day Bill Ford made his spectacular “Way Forward” announcement of crisis, plant closings and layoffs–Ford stock went up!

The big financiers understand each other.

But many workers also understand, and have decided that they will not be fooled into concessions so easily.

At Delphi, which is using bankruptcy as a tactic to impose big concessions on GM’s parts-plant workers, a core of activists have formed the organization “Soldiers of Solidarity” to oppose any concessions whatever.

Workers’ resistance is not only showing up in the auto industry. The mechanics’ strike at Northwest, isolated as it was, revealed a choice to fight. The New York transit workers voted against a proposed contract with health care concessions, revealing their choice to fight on.

We can hope that these few sparks are evidence of a more widespread stiffening of attitude in the working class. It’s long past time that the bosses’ bluff was called.