General Motors & Ford threaten to stop production in US

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AS PAY negotiations between the American car giants General Motors (GM) and Ford, and the United Auto Workers (UAW) have reached a critical point, company chiefs are threatening to close down their operations in the United States and shift production to low-wage countries in Latin America and Asia.

Commenting on GM’s and Ford’s threats, an industry analyst commented: ‘This threat is very real and the UAW is aware of it. Both GM and Ford have made it clear to the union that you do whatever you have to do to stay in business.’

A GM spokesman admitted as much declaring: ‘From a GM perspective, the focus on the talks is on closing the competitive gaps and building a viable long-term future for the company and our people.’

This is the end of the ‘American Dream’, as far as carworkers are concerned. This ‘Dream’ always excluded the low paid and unemployed. Now carworkers are targeted to join them!

Their current pay contract runs out on September 14 and a deal on a new one is due to be concluded before that date.

The huge US vehicle-building monopolies are demanding pay cuts and the slashing of payments into pension funds and healthcare insurance for carworkers, agreements which the UAW members have fought long and hard to achieve.

At present labour costs for vehicle production amount to approximately $71 (£35) per man hour.

Workers’ hourly rate is about $27 (£13) and the other $44 (£21) is made up of other employment costs, in particular payments into a pension fund and health insurance, for present and former employees.

GM and Ford have made it clear that they want to slash labour costs by 30 per cent, or they will shut down their plants in north America and move production elsewhere.

Car bosses know that imposing a pay cut, to bring American carworkers’ wages more in line with those in Mexico or Thailand, would spark a different kind of plant shutdown, a mass strike by UAW members.

The car giants have debts running into billions of dollars and claim these arise from their financial commitments for pensions and healthcare. They are demanding that the union accepts that they can dump non-wage labour costs.

Their plan is to off-load these debts through creating a Voluntary Employee Benefit Association, funded by meagre sums from the companies and by UAW members paying the rest, in order to have healthcare insurance and a pension.

Such a scheme would have to invest its funds in the money market and shares. Today such investments are catastrophic, with billions wiped off shares in the past few weeks and American money markets awash with $2,200bn (£1,100bn) of debts that will certainly trigger more collapses.

In addition, the union would be expected to play a key role in running the scheme, acting as a broker in search of profitable investments – like sweatshop businesses in Latin America and Asia?!

This is what is on the table in the Motown talks between the car giants and union leaders, like UAW President Ron Gettelfinger. On their past record, these union leaders will capitulate to the bosses.

This situation in Motown brings out clearly, not only the crisis and bankruptcy of the US car monopolies and American capitalism, but that of the reformist, business unionism of the likes of Gettelfinger.

To defend jobs, pay, pensions and healthcare, UAW members need to build a new revolutionary leadership in their union that will break with class collaboration and strike to defend past gains.

In the present crisis of world and US capitalism, this political leadership must sever links with the parties of the big corporations, the Republicans and Democrats, by organising a Labor Party to fight for the interests of the working class.

Today workers’ rights to decent living standards, pensions, healthcare and education cannot be achieved within crisis-ridden American capitalism.

US imperialism must be overthrown by the working class, organised under the leadership of a party of the Trotskyist International Committee of the Fourth International, to establish a socialist United States of the Americas.