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GM Job Cuts Will Devastate US-Canada Cities
B y Joseph Kay and Barry Grey
WSWS.org
World Socialist Web Site
11-24-5
General Motors' plan to eliminate 30,000 hourly jobs by
2008, announced Monday in Detroit, will have devastating consequences for
cities in the United States and Canada, and its ripple effects will hit
working class communities throughout the two countries. The closure of
twelve facilities will reduce the auto maker's manufacturing jobs in North
America by nearly a third.
Taken together with hourly and salaried job
cuts already announced this year by GM, Ford and the auto parts makers
Delphi and Visteon, Monday's announcement brings the total of auto jobs
targeted for destruction to 60,000, and this does not take into account the
impact of Ford's downsizing plan, to be made public in January. The number
two US auto maker has made clear that it intends to eliminate thousands of
jobs and permanently close a number of factories.
Since 2000, more than 100,000 hourly and
salaried automotive jobs have been eliminated in the US. The latest GM cuts
are part of a longer-term trend in which corporations have wiped out jobs
that once provided a relatively stable livelihood for manufacturing workers.
Through major struggles in the 1930s and into the post-war period, workers
were able to win concessions in pay and benefits. This was particularly the
case in the auto industry.
For the past quarter century, beginning with
the Chrysler bailout of 1979-80, the auto companies have been downsizing
their work forces, closing plants, and using the prospect of unemployment as
a club to impose wage concessions and chip away at health and pension
benefits, as well as previously established improvements in working
conditions.
They have been assisted by the United Auto
Workers union, which has collaborated in the destruction of jobs and the
undermining of wages and benefits in order to boost the competitiveness of
the US auto companies against their European and Asian rivals.
This process has reached a new stage, marked
by the decision of Delphi, which was spun off by General Motors in 1999 and
remains GM's main parts supplier, to file for bankruptcy protection and
demand pay cuts of 60 percent. The company is also demanding sweeping cuts
in health benefits and pensions, and plans to eliminate 24,000-or nearly two
thirds-of its US hourly work force.
In an interview with the Detroit News
published Tuesday, the day after GM announced its job-cutting plans, Delphi
Chairman and CEO Robert S. Miller reiterated his demands for a rollback to
conditions not seen since the open shop days of the 1930s. Defending
Delphi's proposal to slash the base wage of its workers to $12.50 an hour,
Miller said, "The fundamental reason [we are in bankruptcy] is we have labor
costs in our North American facilities that are double or triple what our
US-based unionized suppliers [competitors] pay. That is a difference that is
unsustainable."
Later in the interview, Miller volunteered
the following: "One thing you haven't asked about is whether we will shrink
the number of US jobs even if we get what we proposed... And the answer is
yes, there will be a significant shrinkage."
Studies show that each job at a US auto
factory supports seven jobs at other businesses nearby. That means the
elimination of 60,000 auto jobs in the US and Canada will result in a total
job loss of well over 400,000. And these losses will be concentrated in
working class communities already hard hit by previous layoffs and plant
closures.
The measures announced on Monday will be
only the beginning for GM workers. On Tuesday, the company's stock fell for
the second straight day, as analysts on Wall Street made clear that the cuts
would not be sufficient to satisfy banks and investors.
Ron Tadross of Bank of America continued to
give GM stock a "sell" rating, saying he still anticipated the company to
end up in bankruptcy. John Casesa of Merrill Lynch said, "It will likely get
worse before it gets better. We believe GM's announced restructuring plan is
only the first step in the long process."
The downsizing of the US auto industry has
already produced socially catastrophic consequences in parts of the country,
particularly in Michigan, the historical center of automobile production.
The Detroit Free Press on Tuesday cited an astonishing statistic, noting
that, according to US census data, "Michigan's median household income has
fallen by $9,914-19 percent-between 1999 and 2004, more than any other
state."
This figure crystallizes a historic decline
in working class living standards-one that precedes the impact of the new
and more drastic assault on jobs and wages.
Giving a sense of the mood among GM workers
in the region, the newspaper quoted Robert Paulk, an hourly worker at the
Tech Center in Warren, Michigan, who said, "There are a lot of people that
are really mad. They think this is the thing that revolutions are made of."
Metro Detroit-which includes major plants in
Pontiac and Orion Township-has been largely spared in the most recent
announcement, though these plants are considered to be high on the list for
future cuts. Plants in other areas in Michigan, however, are among the
facilities that will be shut down or scaled back.
The city of Flint is slated to lose over 700
jobs with the shutdown of the Flint North engine line in 2008. The Flint
North complex once employed 20,000 workers, including the Buick City complex
that closed in 1999. The number of active GM workers in the city has
declined from a peak of over 80,000 to just a few thousand today.
Flint will also be hit by Delphi's plans to
close its Flint East plant, which employs 3,400 people. The company has
already shut down production at its Flint West plant.
Once known as "Vehicle City," Flint has
become a ghost of its former self. Over a quarter of the population,
including nearly 38 percent of children under 18, live below the poverty
line. The official unemployment rate stands at 12 percent. Both of these
figures-comparable to those found in Detroit-understate the devastation that
has overcome the city in the past two decades.
Another Michigan city to be hit by the plant
closings is Lansing. The Lansing Metal Centre, which employs 1,360, is
slotted to be shut down by 2007, and the Lansing Craft Centre, which employs
450 workers, will close by 2007. Nearly 3,000 jobs were eliminated when the
Lansing Car Assembly plant was shut down last year.
Also in the Midwest, GM is planning on
eliminating the third shift at its SUV plant in Moraine, Ohio in 2006, a
move that is expected to cost 1,000 jobs.
Thousands of jobs will be lost in
southeastern Ontario, Canada. GM announced that it will close its Oshawa No.
2 plant by 2008, eliminating 2,500 jobs. It will also eliminate a shift at
its No.1 plant, leading to a loss of an additional 1,000 jobs. About 140
jobs will be lost with the shutdown of a parts plant in St. Catharines,
Ontario.
An article in the Toronto Globe and Mail on
Tuesday noted that the entire economy of the region will suffer. "About half
of Canada's critical auto parts industry lies exposed to the shock waves
emanating from the planned closing," the newspaper reported. According to
the article, GM contracts are responsible for half of the 100,000 jobs in
the Canadian auto parts industry. An estimated 12,000 jobs in the parts
industry may be eliminated as a result of the job cuts at GM.
The economic impact will extend beyond these
parts jobs to wider sections of the economy. "Jan Myers, chief economist for
Canadian Manufactures & Exporters," the Globe and Mail reported, "estimates
that about nine jobs are created directly in Canada for every auto assembly
position. That means the sector generates about 20 to 25 per cent of the
total jobs in Canadian manufacturing."
Outside of the US Midwest and Canada,
several major plants will be closed in southern states. GM will sharply
scale back production at its Saturn plant in Spring Hill, Tennessee,
resulting in some 1,500 job losses. Over 2,500 jobs will be eliminated in
Oklahoma City, Oklahoma when a plant there is closed in 2006. And 3,000
workers will lose their jobs in Doraville, Georgia, just outside of Atlanta.
Neither the United Auto Workers nor the
Canadian Auto Workers union is willing or able to mount a serious struggle
against the auto companies' attacks. They are both based on a nationalist
perspective that precludes a unified struggle of North American auto
workers, and instead facilitates the companies' strategy of divide and
conquer. Their nationalism is bound up with their defense of the capitalist
system. They oppose any struggle that challenges the private ownership of
the auto industry and the subordination of the interests of workers to the
corporate drive for profit.
The jobs and living standards of auto
workers in the US, Canada and internationally can be defended only through
their united mobilization against the transnational corporations on the
basis of a socialist program.
See Also:
General Motors to close 9 plants, slash 30,000 North
American jobs
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