GENERAL Motors is about to end its ‘honeymoon’ relations with the US motor workers’ trade union, the UAW.
Up till now the UAW leaders have agreed to slash and cut wages, and health and pension benefits to assist General Motors in keeping motor car production in the United States.
However, GM is now closing 1,100 dealerships inside the US, and is negotiating with the Obama administration, that has already given it billions of dollars, to shift more of its car production to China.
It aims to import cars from China into the US.
Car imports from China into the US market are due to begin in 2011.
Already, 13 assembly plants in the US have been closed, and the company is preparing to follow Chrysler into Chapter 11 bankruptcy on June 1.
GM expects that the number of cars that it manufactures in Mexico, China and South Korea, and imports into the US, will double.
This move is certain to be combated by UAW members who will move to change their union leaders if they fail to fight it. Workers are already saying that GM is using taxpayers’ money to shift to China and sack them.
A GM spokesman confirmed that China will make 10.5m cars this year, an increase of 8.7 per cent. The US will make 9.5m. This will be first time that China builds more cars than the US. The US was building 17m cars a year three years ago.
Meanwhile, Fiat, which has acquired an initial 20 per cent share in Chrysler for nothing (due to rise to 35 per cent), is planning to do the same for GM Europe, including Opel and Vauxhall.
When the GM Europe deal is completed, Fiat says that it will be the world’s number two carmaker after Toyota.
It also aims to acquire GM Europe for next to nothing on the basis that GM will be desperate to get rid of it.
Fiat will then have acquired a huge mass of the industry at a time when sales are declining fast.
Fiat is expected to employ radical surgery to cut out or slash the workforce in a number of plants including the Vauxhall plants in the UK.
No financial details have yet been released, but there are reports that Fiat may be able to buy GM Europe for as little as £886m.
Germany’s Economy Minister Karl-Theodor zu Guttenberg has confirmed that Fiat is seeking up to 7bn euros of loan guarantees from various European governments, both to cover the purchase price and GM Europe’s debt and pension obligations.
With Fiat and GM Europe making a number of competing small cars, such as Fiat’s Punto and Opel’s Corsa, at a time of falling sales, the takeover will lead to factory closures at GM Europe.
Fiat boss Marchionne has said, ‘Opel can never make money in its current size, and if you don’t make money you won’t survive.’
Last week, the chief executive of Fiat told the German government that if – as many expect – the Italian carmaker takes over General Motor’s European division, then the Kaiserslautern factory will almost certainly close.
GM workers in the United States and the EU will have to get ready to occupy their factories to prevent either closure or a massive slashing in the number of jobs by both GM and Fiat.
They will then have to begin a national campaign for the plants to be nationalised.
In the UK, this will mean organising national strike action to bring down the Brown, bankers’ government, to bring in a workers’ government that will nationalise the entire motor industry under workers’ control.
In the United States, workers will have to break from the Democratic Party and form a Labour Party.