AN emergency manager, in fact a financial dictator with powers over jobs, wages and conditions, has been appointed for the bankrupt US city of Detroit.
Kevyn Orr, a lawyer, has a track record. He received $1million in fees for restructuring Chrysler after the US motor car industry and its ‘Big Three’ – GM, Ford and Chrysler – collapsed in 2009.
He sacked thousands, and shut down a large number of Chrysler plants, before re-hiring new starters at half of the wages, pensions and benefits of permanent workers.
Detroit, the one-time motor capital of the USA, is now bankrupt and derelict, with miles of closed-down plants at its centre where motor cars have given way to would-be farmers.
The city is running a $300m deficit and has debts of some $14bn.
Orr has been appointed by the Michigan State Governor Rick Snyder, who said the situation was a ‘crisis that had to be resolved’. Orr will take over from the elected city council and the mayor to be Detroit’s dictator.
Orr will have the power to veto all decisions of elected officials as well as have the power, which he is certain to use, to tear up the trade union contracts of teachers, firefighters and all city employees, including police officers.
A law passed in December 2012, that takes effect on March 28, will boost those powers, allowing the manager to terminate collective bargaining agreements with the city’s 48 unions.
As well, he will be able to decree privatising measures and sell off city and state assets. He will especially target pensions and health insurance.
‘We will rise from the ashes,’ Orr told a news conference, describing in fact what he intends to do to all trade union agreements and contracts.
He added: ‘Let’s get at it and work together because we can resolve this, people of good faith. Don’t make me go to bankruptcy court.’
The city that hundreds of thousands flocked to for well-paid union-organised jobs, currently has more than a third of its residents living in poverty, an unemployment rate of 18.2%, and a rapidly declining population. Detroit’s population has more than halved from its peak of two million in the 1950s. It was once the fifth-largest city in the US; now it is the 18th, with 700,000 inhabitants.
Orr pledged emergency measures to achieve, within 12 to 16 months, ‘one of the greatest turnarounds in US history’.
Detroit city leaders have long opposed a state takeover, saying that they were making progress on improving the financial situation.
The city council has called on residents to fight the move, saying that the state is usurping the right of Detroit residents to elect their own leaders.
‘We fought for everything we have. How do you stand on the sidelines?’ Councilman Kwame Kenyatta said on Wednesday in a speech on civil rights at a council meeting.
However, Mayor Dave Bing, a former professional basketball player and steel executive, last week announced that it was futile to resist a state takeover, and he would try to work with the emergency manager.
Faced with this situation, the city’s unions have little alternative but to prepare to call a general strike of all of their members to defend their agreements in the face of the emerging dictatorship.
As well, there are hundreds of US cities that are in the same situation as Detroit as US capitalism seeks to save itself at the expense of the US working class and the poor.
Workers and unions in these cities and throughout the USA must prepare to take national action to support the workers of Detroit.
The time has come for US workers to break with the Republican and Democratic capitalist parties, to build a Labour Party that will fight for socialism. Bankrupt US capitalism must be overthrown and be replaced by socialism, as a matter of life or death.