America's REAL Economy - JOBS BLOODBATH IN GLOBAL AUTO INDUSTRY

VW, Ford, GM, Hyundai, Kia

Jobs bloodbath in the global auto industry

Volkswagen Group, the world’s second largest automaker, is eliminating up to 7,000 jobs as part of a brutal cost-cutting drive to boost profit margins and appease investors who have driven down the German automaker’s stock price 54 percent over the last half-year.

Nearly three years ago, VW set out to slash 30,000 jobs around the world, including 23,000 in Germany, under Future Pact 2016, a plan drawn up by the IG Metall union officials who sit on its corporate board under the country’s “co-determination” scheme.

The VW cuts are part of an ongoing jobs bloodbath in the global auto industry. With trade war tensions growing, signs of a new economic recession and falling sales, the global auto giants are engaged in a brutal competition to slash labor costs and beat out their rivals in the costly but still tenuous market for electric and self-driving cars.

On Wednesday, US-based Ford Motor Co. confirmed that it is continuing its worldwide restructuring to save $25.5 billion over the next few years and, according to Ford CEO Jim Hackett, double its profit margin from 2018. Analysts say the number of job cuts could be as high as 25,000, mostly in Europe.

The carmaker is closing its plant in São Paulo, Brazil, ending South American truck production, shutting a transmission factory in Bordeaux, France, cutting output in Saarlouis, Germany, consolidating its UK operations, preparing to exit Russia and slashing jobs in China.

Korean automakers Hyundai and Kia are downsizing in China, along with other foreign-based transnationals who flooded into the country to exploit cheap labor and the world’s largest car market. Kia is considering closing a plant in Yancheng, following the ending of production at Hyundai’s oldest plant in Beijing.

Last week, production ended at the General Motors Lordstown, Ohio, assembly plant, which once employed 13,000 workers and was the site of militant autoworker struggles in the early 1970s. Last November, GM announced plans to close five plants in the US and Canada and slash more than 14,000 jobs. The company, which made $11.8 billion in 2018 profits, intends to save $4.5 billion through the job cuts, less than half the $10 billion it has squandered on stock buybacks for its richest investors over the last four years.

On Wednesday, Schaeffler Group, a German producer of engine and transmission components, announced it will slash 900 jobs, after missing profit targets and seeing investors drive down its stock value by 44 percent. Mass layoffs have also occurred in Matamoros, Mexico, largely in retribution for the courageous strikes by maquiladora workers, which led to a shortage of parts for US and Canadian auto plants. At least 4,000 workers have been fired and another 50,000 layoffs have been threatened by Mexico’s main business organization.

The principal mechanism for carrying out this coordinated global assault on autoworkers has been the financial markets. By driving down share prices, powerful hedge funds and wealthy shareholders give their marching orders to corporations to escalate the attack on workers’ jobs, wages and conditions. This increases the returns on their investments, thereby funneling even more money to the financial oligarchy.

“Low industry [share] valuations show investors want more changes with spending at a record, profits falling and new competitors vying to jump onto the autos bandwagon,” Bloomberg News wrote in a March 6 article. “The great auto-indus6try shakeout has started to arrive in force,” the article continued, noting that “Consolidation, while no silver bullet, would help eliminate the duplicate outlays on everything from expensive software ventures to battery technology.”

Several major automakers are considering potential tie-ups, including VW and Ford, Daimler and BMW, and French automaker PSA with Fiat Chrysler or GM. Such a consolidation would be carried out at the expense of the jobs of hundreds of thousands of white-collar and production workers.

In his mid-19th century work, Wage Labor and Capital, Karl Marx identified the consequences of the “industrial war of capitalists among themselves” over markets and profits. “This war has the peculiarity that the battles in it are won less by recruiting than by discharging the army of workers. The generals (the capitalists) vie with one another as to who can discharge the greatest number of industrial soldiers.”

Workers are beginning to fight back. After decades in which the class struggle was suppressed by the unions, there has been a resurgence of strike activity among workers around the world. In the first ten weeks of 2019, strikes by auto and auto parts workers have taken place in Hungary, Canada, Mexico, Brazil, China and other countries. The growth of resistance poses fundamental questions of perspective and strategy.

First, the global assault on jobs must be met with a global response by autoworkers. It is impossible for workers to fight transnational corporations on a nationalist basis. The answer to the fratricidal race to the bottom between workers is forging the closest links between workers in the Americas, Europe, Asia and Africa in a common fight to defend the jobs and living standards of all workers.

Second, the unions long ago abandoned any defense of workers and have been transformed into direct tools of corporate management and the state. This was the result not simply of the cowardice and corruption of the union bureaucrats, but the inability of these nationalist and pro-capitalist organizations to respond in any progressive way to the globalization of production.

The United Auto Workers and the Unifor union in Canada have responded to GM’s plant closings by launching an anti-Mexican campaign, even as Mexican workers revolt against slave labor wages and sweatshop conditions. At its just concluded bargaining convention, the UAW made clear that it plans to impose even deeper concessions on 150,000 GM, Ford and Fiat Chrysler workers, whose contracts expire this summer, by using the same lie it has for four decades: that concessions “save jobs.”

The same is true everywhere. The long-time IG Metall leader and chairman of the joint works council of the Volkswagen Group, Bernd Osterloh, who makes $848,000 (€750,000) a year, has already signaled his support for VW’s new cost-cutting plan.

In order to fight, autoworkers need new organizations: rank-and-file factory and workplace committees that are independent of the unions. These committees must oppose the corporate dictatorship in the factories and mobilize the broadest sections of the working class in mass protests, plant occupations and national and cross-border strikes to defend jobs and living standards.

Finally, the growing industrial movement of the working class must be developed into a powerful political movement against capitalism and the economic and political domination of the corporate and financial elite. The new wave of layoffs demonstrates that under capitalism, revolutionary advances in technology such as artificial intelligence, 3-D printing, machine-to-machine communication and self-driving cars are used not to improve life for the broad masses of the population, but to drive more workers into destitution.

The only answer to this is the fight for socialism. The vast fortunes of the super-rich must be expropriated and the giant banks and corporations converted into public enterprises democratically controlled by the working class, as part of the scientifically planned reorganization of the world economy.

This requires that the working class take political power on a world scale, reorganizing society to meet social needs. Only in this way can the immense potential of globally integrated production and labor-saving technologies be used for the common good of all of mankind.

Workers and residents denounce GM Lordstown closure

Following the closure last week of the iconic General Motors plant in Lordstown, Ohio, reporters  visited the area to speak to workers and their families. Autoworkers, teachers, high school students, parents and general laborers denounced the steel and auto corporations that have devastated the Mahoning Valley with mass layoffs over the past four decades, along with their accomplices in the unions who collaborated with management in imposing repeated rounds of concessions under the false pretense of saving jobs.

A recent study by Cleveland State University estimates that idling the Lordstown factory will cost the local economy, already devastated by the shutdown of the steel industry, an additional $3 billion. It further estimates that 1,256 more private-sector jobs will be lost, in addition to the 1,607 jobs cut as a direct result of the plant ceasing operations.

Added to the previous destruction of the third and second shifts, the cumulative economic impact to the region is estimated at $8.2 billion with a total loss of 7,711 jobs or 4.4 percent of employment in the Ohio part of the Youngstown-Warren-Boardman metropolitan area. (The area also includes Mercer County, Pennsylvania)

The closure reopens the wounds from Black Monday 40 years ago, when 10,000 jobs were destroyed in a single day as Youngstown Sheet and Tube closed down. Many workers we spoke with bitterly recalled the impact. Altogether 60,000 jobs were destroyed from the mill, related suppliers and service industries.

Jerry was laid off last week after 20 years at GM. He joined a conversation with several others in the parking lot of a local supermarket. “America in general” he said in disgust, “not just GM. It’s vulture capitalism. Like Bush said, ‘capitalism works.’”

The Youngstown Vindicator newspaper and other media have been playing up attempts by the Democrats and the UAW to blame workers in Mexico and China for the layoffs. The Youngstown Vindicator published a half-page photograph of the last Chevy Cruze rolling off the assembly line draped in an American flag.

But like most workers we spoke with, Jerry rejected this reactionary rubbish. “It’s the same in many countries,” he said, “it’s universal.”

Jerry’s father retired from Lordstown and was proud of the union. That trust which was built on the sacrifice and struggles of generations of industrial workers has been dragged in the mud. “The UAW have been bribed, to push through contracts,” he said. “In the ’60s and ’70s they used to fight. I remember growing up in union families, in the steel mills and auto plants.

“My dad worked at Lordstown and was proud to be UAW. The union took care of us. Then they started taking a little bit of concessions. Now there’s nothing left. They have taken everything. They have all that technology, robots everywhere. What we need are jobs for working class people.”

There is a deep anger and growing militancy among rank-and-file workers, but they have absolutely no say in the direction of the UAW, which accepts every dictate of the corporations and functions as a labor police force for the employers. The union gave up fighting long ago, having transformed itself into a junior partner in the exploitation of workers.

The local school board reports that more than 10 percent of Lordstown’s enrollment, between 50 and 75 students, will be directly affected by the closure, although the final number that the district will lose is still up in the air. Young people are quite disturbed.

From left to right, Maya, Haley and Tyler, students at Austintown Fitch High School

A group of students from Austintown Fitch High School denounced the attack on jobs. “They shouldn’t have to leave their hometown to go find a new job because the Lordstown plant shut down,” said Haley. “This whole area is short jobs because everything is closing.

“They closed the steel mills and now the GM plant. Everyone is losing jobs. They have to struggle to find a job to stay in their home; and if not, they have to move.”

Her friend Tyler added, “I’m a high school senior, and I don’t even know where I’m going to work.”

Ron works in a local baking company

Ron works for a local baking company. “The valley is struggling now,” he said. “The shutdown is going to affect everybody. I just don’t see anything positive from it at all. Jobs are tough enough now, especially for the young kids coming out of school. What are they going to do?”

John McCombs applied for a job at the plant when it first opened in 1966. When he wasn’t hired, he went overseas in the military. On returning in the spring of 1970, GM had just added the van plant, expanding the workforce to more than 12,000, and he hired in.

“It was rough,” he said. “We were building 108 cars an hour. It was a tiresome job. You humped. There were a lot of jobs that were real bad.

“I have a bad taste in my mouth for the union. They line their pockets. If you’re in the clique, you don’t have to do anything and you get paid. But otherwise you’re on your own.”

Michelle is 48 and has lived in Youngstown all her life. She remembers the mills closing. “It was the start of the downfall of this whole community, and now it’s going to get even worse. Youngstown’s not a good place any more. It really isn’t. The roads are horrible. We have horrible schools. The taxes are terrible.

“I started home schooling my kids in 2007. That’s how bad it got for me. They lost transportation. They were losing all the programs at school, and there was no special education— no anything, no art, no music. You couldn’t do any sports after that in Youngstown.

“We gave GM those tax cuts on top of it. That wasn’t fair, Obama’s restructuring in 2009. They just pulled the rug out from underneath us. There’s not any difference between Democrats and Republicans. There is going to be a social explosion. Especially the more financially strained everybody gets. Literally, every single day you hear of some other business that is closing.”

Gerry Vasko, a retired teacher was particularly offended by the Sunday editorial by local journalist Bertram deSouza in the Youngstown Vindicatornewspaper. “He said that if autoworkers had voted for Clinton, the plant would not be shut,” said Gerry. “I didn’t want to vote for her, but we didn’t have an alternative.

“And they say the economy is so great,” she continued. “But where is it so great? What are these people going to do from Lordstown? Are they going to move, pull up their roots? Are they going to stay here and try to find something else? It’s insane. More stores have closed around here. Businesses, bigger businesses, smaller businesses. Toys R Us went under and the pet store next to it.

“Of course, now we lost General Motors and all the companies that manufactured products for General Motors. The unions are making millions off the backs of the workers.”

De Souza’s article is worth noting because it is typical of the foul calumny directed against the working class by both Democrats and union officials. His argument, a lie from beginning to end, is that Obama’s restructuring of GM and Chrysler in 2009 “saved the auto industry” and that the large number of workers who voted against Democrat Hillary Clinton in 2016 are getting what they deserve as plants are shut down and jobs slashed.

He turns reality on its head when he writes, “The end of car production at the Lordstown plant and, quite possibly, the permanent closing of the cavernous facility later this year is on the heads of those autoworkers who were unwilling to give political credit where it was due.”

On the contrary, autoworkers had good reason for their hostility to the Democratic Party administration. Obama supervised the greatest transfer of wealth from the bottom to the top in history. Tens of trillions were funneled to the banks and hedge funds while the auto corporations were encouraged to slash pay for new hires, flood the shops with temporary workers and destroy the eight-hour work day while shutting plants and slashing jobs.

Quincy Burgess

Quincy Burgess works in a food processing plant for a temporary agency at minimum wage.

All of his relatives worked at GM. “I feel for the people at GM,” he said. “My two cousins just got sent to Tennessee. They had to go way down there just to keep going to work. They just disregarded all the people around here.

“It’s really bad around here. There just are not a lot of resources. I am sitting here struggling. I go to work, pay my taxes. I’m just struggling. It’s terrible.

“If you aren’t rich, you ain’t got nothing coming. The capitalistic system has no regard for the people that helped them to make that money in the first place.

“I used to think capitalism was something that was necessary to keep things going. But it’s probably the problem.”