The General Motors Corporation reported a $38.7 billion operating loss for fiscal year 2007. Is the world’s second largest automaker going to go out of business?
Not any time soon. GM is clearly facing challenges in the auto manufacturing marketplace. However, the extent of the
Members of the UAW line up for their |
The loss paints a false picture of the productive capacity and value of the automotive giant. GM sold close to 9 million cars in 2007. It was number one in auto sales in China with over 1 million cars and trucks sold last year. (CBS News, Jan. 23, 2008)
As a result of its staggering losses, GM is trying to solve the crisis on the backs of those who have produced all the value at GM—the autoworkers represented by the UAW. GM is looking to cut the wages it pays its hourly workers and reduce labor costs. It has offered all 74,000 hourly workers buyouts in the form of early retirement or lump sum payouts.
GM is offering a lump sum of $62,500 for skilled workers and $45,000 for production workers with at least 30 years of service to retire with full pensions and health care benefits. Workers near 30 years of service who accept the buyouts would receive reduced pay until their 30-year anniversary at which time they would receive full pensions and health care benefits. Workers over 50 years old and with at least 10 years of service who retire early would receive pro-rated health and pension benefits.
All GM workers represented by the UAW have been offered a buyout package that does not include pension or health benefits. (Chronicle-Tribune, Feb. 16)
Buyouts to increase rate of exploitation
General Motors, if it chooses to replace the workers that take early leave, will be able to exploit new workers at a higher rate. GM will be able to pay new workers less based on the two-tier contract signed between the UAW and GM in September of 2007.
Capitalism looks to make the workers pay for the corporation’s problems. When profits are up, corporations do not come to the union to renegotiate the contract to pay the workers more or increase pension benefits.
The buyouts will lead to a situation where a union member, working next to another doing the same job, will be making half the wages and receiving less health benefits and pension than the other.
It is only the existence of the UAW that compels GM to make the buyout offers in the first place. Without the union contract, GM could fire or lay off workers with little if any compensation.
The acceptance of a two-tier contract by the UAW was a setback for the workers not only at GM, but also throughout the auto industry. The latest contract is the result of a challenge facing unions representing manufacturing workers in general.
The globalization of production has enabled the capitalist owners to threaten plant closures and relocation to oppressed countries with cheaper labor and less stringent regulations. These threats pressure the unions to make huge concessions such as the two-tier system.
Faced with the possibility of losing jobs altogether, the UAW leadership accepted the new contract. Over time, these concessionary contracts will continue to weaken the union and put its very existence in question.
It is the nature of the capitalist system to seek to maximize profits through the introduction of new technology and increased productivity. This reduces reliance on skilled workers, leading to layoffs, wage cuts and greater misery for the working class.
While the changes brought about by globalization are formidable obstacles to maintaining and improving the conditions of workers, they are not insurmountable. It will take a unified fight across the borders of the oppressed and imperialist countries by workers and communities against lower wages and benefits in a race to the bottom.
