Oct 20, 2008
After months of speculation about which parts of which auto companies might be sold off, or which companies might declare bankruptcy, the picture changed on October 11. Surprise! GM and Chrysler might merge! That is, GM might add Chrysler to its empire.
Analysts speculated that GM was after Chrysler’s stash of 11 billion dollars cash, while Cerberus – Chrysler’s private-equity-fund owner – might get the rest of the financial unit GMAC, which is in line for the federal sub-prime-mortgage bailout.
The calculations of the companies certainly include their chances of squeezing more money out of workers and small suppliers. As Daniel Howes of the Detroit News explained: “GM, Ford and, presumably, Chrysler LLC could use the courts to radically restructure their U.S. operations even more than they already have. Wages, benefits and work rules in union contracts would be streamlined, brands could be killed and dealer networks rationalized; supplier contracts could be renegotiated and the network of parts makers winnowed.”
In other words, buying up Chrysler might give GM the same weapons as if GM declared bankruptcy, but without the problems of bankruptcy – a sticky long-drawn-out legal process that GM is still muddling through at Delphi. Also, GM could cut out a slice of its competition in the quest for market share.
Chrysler’s owner, Cerberus Capital, for its part, originally bought Chrysler with the goal of “stripping and flipping” the manufacturer. Today’s frozen credit markets mean that no buyer will be able to finance such a deal for the foreseeable future. Cerberus may simply be looking to dump a lost gamble.
And behind the scenes are the banks. Holders of billions upon billions of dollars of auto-industry debt, banks such as JPMorgan Chase, Citibank, Wells Fargo and Bank of America are summing their sums and pulling the strings of everyone involved. After all, 25 billion dollars of federal auto-industry bailout money is soon to fall from the tree. And more is expected after that!
Whatever mega-deals finally result, auto workers will pay for it with more so-called “restructuring,” which means more plant closings, mass layoffs and more demands on those left on the job. Corporate greed has already laid waste to whole cities and towns in Michigan, in Ohio, in Indiana. The auto-producing region has already been in five years of depression. Now, the companies in their new crisis will go on a renewed offensive, trying once again to shift the burden onto the workers.
No, workers have already paid too much! Workers – the employed and the unemployed! – have every reason to launch their own counteroffensive, using all the means at their disposal, to make sure that the banks and corporations which have created this crisis are the ones to pay its full cost.