May 14, 2007
Poor General Motors (GM) made first quarter profits of “only” 62 million dollars. Wall Street was upset because last year’s first quarter profits were 602 million.
What was the difference? GM’s finance unit, GMAC, lost big bucks on its gamble in the high-risk residential mortgage game.
Wall Street immediately cried for workers to make up the loss. “Without substantial labor concessions, meaningful improvements in profitability are unlikely,” said a Lehman Bros. analyst.
What? GM gambles in mortgages – but when they lose, workers are supposed to pay?
It’s doubly outrageous because workers paid the first time! Where did GM get the money it uses to wheel and deal in financial markets? Workers made cars and trucks, GM took them to sell and profit. GM then used some of the profits to gamble and speculate – after first taking good care of its executives and investors, of course – but never taking the same good care of the workers.
And yet GM’s entire empire, financial included, rests on the value of what it takes from the workers’ labor.