Thursday, February 4, 2016

KEEPING OBAMA'S CRONIES RICH! - THE LONG DEATH of the AMERICAN MIDDLE CLASS - As its hometown of Flint remains poisoned, GM makes record 2015 profit


PEW RESEARCH CENTER

Most Americans Say Government Doesn’t Do Enough to Help Middle Class

As Americans begin casting the first ballots in the 2016 presidential election, neither political party is widely viewed as supportive of the middle class in this country.


As its hometown of Flint remains poisoned, GM makes record 2015 profit

"While the company is paying out billions to its richest investors, residents in Flint, Michigan—the birthplace of GM—have been poisoned by lead, largely due to decades of toxins the automaker dumped into the Flint River. While state and local officials ignored resident complaints about the taste, color and odor of the tainted water, in December 2014 GM quietly stopped using the river-supplied water at its local engine plant because of corrosion to its parts. The company’s employee drinking fountains and ice machines, however, continued to use the poisoned water."

During the 2009 restructuring, the Obama administration essentially immunized the company and its richest stockholders from the consequences of the criminal decisions of its top executives. 

As its hometown of Flint remains poisoned, GM makes record 2015 profit

By Jerry White
4 February 2016
General Motors announced yesterday that it made a record $11 billion in pre-tax profits in 2015. The Detroit-based auto giant, the third largest auto company in the world, made $6.3 billion in profits in the fourth quarter alone, beating Wall Street expectations.

Once again, GM made the bulk of its income from its North American manufacturing operations, where the corporation’s decades long cost cutting campaign, carried out with the full backing of the United Auto Workers, was accelerated during and after the 2009 restructuring of the company by the Obama administration.

GM had a North American profit margin of 10.3 percent, reaching its 10 percent goal a year early and surpassing the margins at its joint ventures in China. This was accomplished through the UAW-enforced exploitation of workers, which includes relentless speedup, forced overtime and poverty level wages to a new generation of workers who cannot afford the cars they build. On the same day it reported its profits, a skilled trades worker fell to his death at a GM plant in Defiance, Ohio.

The world economic crisis led to a lowering of profits for GM in China and substantial losses in South America and Europe. The car company has shut plants and eliminated the jobs of thousands of production and white-collar workers in Brazil and Germany, along with Russia, where it is ending manufacturing operations.

Record US car sales were spurred by pent up demand following the 2008 crash, falling fuel prices and low car loan rates. This pushed up GM’s revenue, particularly from highly profitable pickup trucks and SUVs. Big investors, however, anticipate that the boom in car sales will dry up in 2016 and lead to falling profit margins. This led to a sell-off of GM stock Wednesday, driving shares down 2.5 percent and 13 percent over the past year.

“We understand we are in a cyclical business, and it’s very difficult for anyone to predict a downturn,” CEO Mary Barra told investors in a conference call Wednesday, “but we will maximize earnings through the cycle.” She said the automaker expects to cut operating costs by $5.5 billion by 2018 and hand over $16 billion to shareholders in dividends and share buybacks over that period.
The government restructuring of GM in 2009 and the relentless UAW-backed attack on the jobs, wages, health benefits and pensions of autoworkers was designed to guarantee a steady flow of cash to big investors under virtually any market conditions. A large portion of workers’ income is based on “profit-sharing,” which can be sharply reduced in a downturn. The UAW has also given the company a free hand to slash jobs and close plants in response to “market conditions.”

BLOG: UAW FUCKS OVER THE AMERICAN WORKER

Last fall, the UAW pushed through a new four-year contract on GM’s 49,600 hourly workers in the US, over mass opposition. The contract, like similar deals at Fiat Chrylser and Ford, maintains the two-tier wage and benefit system, expands the use of low-paid temporary workers, imposes first time co-payments on older workers for health benefits and holds overall labor cost increases below the rate of inflation.

While the company is paying out billions to its richest investors, residents in Flint, Michigan—the birthplace of GM—have been poisoned by lead, largely due to decades of toxins the automaker dumped into the Flint River. While state and local officials ignored resident complaints about the taste, color and odor of the tainted water, in December 2014 GM quietly stopped using the river-supplied water at its local engine plant because of corrosion to its parts. The company’s employee drinking fountains and ice machines, however, continued to use the poisoned water.

While Flint needs a massive marshaling of resources to address the irreparable damage done to children and other residents by the neurotoxins, the $80 million the Obama administration has committed to Flint amounts to less than three days of GM’s profits last year.

GM’s record profits follow similar announcements by Ford and Fiat Chrysler (FCA) last week. Ford made $7.4 billion in 2015, including $1.9 billion in the fourth quarter. FCA reported a profit of $410 million for 2015, a decrease from 2014 because of higher recall and investment costs.

During its earnings call, FCA CEO Sergio Marchionne told investors that the company would end production of its smaller and less profitable Dodge Dart and Chrysler 200 models and concentrate on larger vehicles. Marchionne said FCA might “partner” with other automakers to continue selling smaller cars. In the new labor agreements, the UAW sanctioned the shifting of small car production to lower wage plants in Mexico, while pledging to reopen local contracts and impose “competitive” agreements to continue small car production at US plants.

The enormous profit making at GM is an expression of the corporate-government-union conspiracy against the working class and the domination of the financial aristocracy over virtually every aspect of life in the US.

In 2009, the Obama administration essentially handed GM and Chrysler to Wall Street “turnaround” specialists. Last year, hedge fund manager Harry Wilson, a former member of Obama’s Auto Task Force, pressured the GM board to hand over $5.7 billion to shareholders, including $3.5 billion in stock buybacks and $2.2 billion worth of dividend payments. GM has now told investors it would expand a stock repurchase program from $5 billion to $9 billion through the end of 2017. The payout was hailed by the UAW, which owns the largest block of GM shares.

While these financial parasites are reaping vast fortunes, the company has left a trail of devastation behind it—not only for autoworkers and their families, but hundreds of car-buyers who were killed or injured due to defective ignition switches.

BLOG: WELL, WE KNOW HOW MUCH THE OBOMB LOVES HIS CRIMINAL CRONY BANKSTERS!
   During the 2009 restructuring, the Obama administration essentially immunized the company and its richest stockholders from the consequences of the criminal decisions of its top executives. The Treasury Department broke up the company into two entities—an “old” GM, which was responsible for the bulk of the company’s liabilities stemming from lawsuits over defective parts and pollution caused by GM factories, and a “new” GM, which could funnel profits to big investors with as few deductions as possible.

BLOG: WELL, WE KNOW HOW MUCH THE OBOMB LOVES HIS CRIMINAL CRONY BANKSTERS!

Last year, the Obama administration hit GM with a wrist-slap fine of $900 million for the defective ignition switch scandal and no top executives involved in the cover-up have been prosecuted.

The mass struggles of autoworkers, including the Flint sit-down strikes in the 1930s that established the UAW, led to a significant increase in living standards for workers, and by 1960 Flint had one of the highest per capita incomes in America. The transformation of the “Vehicle City” into one of the poorest cities in the nation was the product of the betrayals by the UAW, which, starting in the late 1970s, suppressed any resistance by workers to plant closings, layoffs and wage cutting in the name of boosting the international “competitiveness” and profitability of the US automakers.




US autoworkers speak on record profits

By our reporter
4 February 2016

“GM will do anything for profits and stockholders”

The World Socialist Web Site spoke to autoworkers in the US and Canada about the record profits announced by General Motors and other Detroit-based automakers. Workers pointed to the contrast between the celebrations in corporate boardrooms and the real life experiences of workers, who have suffered from the criminal actions of GM and the other auto companies.
In particular workers pointed to the recent scandal over defective ignition switches in GM vehicles tied to scores of fatal crashes and the lead poisoning crisis in Flint, Michigan—a former center of GM manufacturing left in ruins after the company abandoned the city.
Chris White, a retired GM worker at the Oshawa, Ontario plant, told the WSWS, “GM is making obscene profits and handing out huge salaries to executives while saying wages are too high. When Mexico becomes too expensive they go somewhere else where it is even cheaper. Meanwhile, you have kids here coming out of college flipping burgers.
“GM kept the defective ignition switches in their cars hidden from the public. They were guilty of not fixing that defect when it was first discovered. Now they are discussing the same thing for airbags.
“I keep a close watch on all those things. Here in Canada GM is saying they will not put a new product into the Oshawa plant until after the contract negotiations later this year. That is blackmail.”
He remarked on the situation with lead poisoning of the water supply in Flint, Michigan, where GM once employed 80,000 workers. After closing the plants it left behind toxic industrial sites all over the city.
“I remember when GM was closing plants in Michigan. It could happen here as well. This facility once had 20,000 workers and now it is down to 2,500. They have been downsizing and downsizing. The tax implications for the city for GM moving out would be quite substantial.
“It has taken a big effort to clean up the land after it has been used for industrial purposes. Workers are often not informed of the hazardous materials used in manufacturing. Canada is still the largest exporter of asbestos in the world. Most of it goes to Third World countries.
“Corporate greed and capitalism is the way of the world. GM will do anything for profits and stockholders. GM in Canada never had a bankruptcy, but they took benefits from the retirees just the same.”
He remarked on the recent US contract negotiations. “It seems like the unions have marched us 100 years backwards. When you start paying union leaders like company executives they start thinking like executives. They went from two tiers to three or four tiers. It is against all union principles.”
GT, a GM skilled trades worker from Indiana, debunked the much-touted $11,000 profit sharing check that workers are set to receive. “It looks good until you examine it more closely. If we had not given up cost of living increases all these years our pay would now be $45 an hour. I work 2,500 hours a year. That comes to $25,000 extra. It sure beats out $11,000, even after taxes. If you tally up overtime pay on top of that it comes to more like $32,000.
“Profit sharing is another scheme between the UAW and GM to screw us and make sure that the company and the union both keep their share. The UAW is more a liaison with management to make sure management does okay.
“UAW President Dennis Williams is making more than $300,000 a year. He wants to protect that. He has nothing in common with me.”
He spoke on the lead poisoning crisis in the former GM center of Flint. “The same thing happened in Anderson, Indiana, where I am from. They used to have 30,000 employees in the city and now they have none. They made huge profits and dumped the workers. They misused people and the environment and then walked away.”

Copyright © 1998-2016 World Socialist

No comments: