The Spark

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

New buyouts:
GM stacks the deck for itself

Jan 21, 2008

General Motors fired another round, in hopes of clearing out older workers and converting entirely to half-price labor.

On January 17, CEO Rick Wagoner said GM would offer early-retirement deals to 46,000 qualifying workers, and also offer a cash incentive program for other workers who would agree to quit the company.

In the same breath, Wagoner again claimed GM is in financial difficulty, and predicted widespread layoffs to come, due to falling sales.

Behind this carrot-and-stick game is the usual motive: corporate greed. The 2007 UAW contracts allow the auto companies to pay new workers about $14.50 per hour, and provide very few benefits to them. The companies are frothing at the mouth over this chance to slash their labor costs in half. GM is the first to announce their program; the others will not be far behind.

But workers who look closely at their options may decide that they are not donkeys to be moved by either carrots or sticks!

Even in the best case, GM’s early-retirement offer is, after taxes, worth less than two years’ pay. How many workers have enough savings to maintain a reasonable life after the cash bonus is used up? How many early-retired workers will be able to pay their added medical costs, due to the new contract charges and the upcoming VEBA problems?

GM knows that workers make these kinds of calculations. That’s why Wagoner is quick to puff up the fearsome outlook of layoffs and plant closings. He hopes that workers can be stampeded into seeking steadier work someplace else. Especially if GM offers a little grubstake, to send them on their way.

But can he make workers forget what they know about the auto industry? Workers know that it’s a cyclical business. Layoffs and call-backs are the way of life. That’s why workers long ago fought to put protections such as supplemental unemployment pay, seniority call-back rights, and jobs banks as part of UAW contracts.

Even though the jobs banks were drastically cut back in the 2007 contract, they still offer at least two years’ income protection to eligible workers. GM is very eager to close out its job bank by paying off and eliminating everyone who would be able to take advantage of it!

But how many workers can look at today’s conditions and believe they know where their next job is coming from, if they leave the job they have? Even two years from now?

GM’s deal is just another ploy. It’s another scheme to trick workers out of pay, benefits and security they have earned.

It’s another corporate scheme to destroy every trace of jobs that pay livable wages.