As the Wall Street Journal editorialized, “Behold Big Business colluding with Big Government to grab subsidies and raise consumer prices,” a form of “corporate socialism, or state capitalism.” This unholy alliance calls to mind the “military-industrial complex” Dwight Eisenhower warned about in 1961, a warning still pertinent today.
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General Motors announces massive profits in second quarter as new COVID-19 surge builds strength
General Motors made $2.8 billion in profits in the second fiscal quarter, the auto giant reported on Wednesday. The results, which shattered analysts’ expectations, followed similar huge profits by crosstown rivals Ford, which reported $1.1 billion in profit last quarter, and Stellantis, which reported $7 billion for the first half of the year.
The financial results are a further demonstration of the continuing profit orgy by American capitalism, which has largely reversed losses incurred during 2020 by ending whatever remains of public health measures and reopening the economy despite the impact on human life. During the second quarter, which runs from April to June, 3.2 million Americans were infected and 50,000 died of coronavirus.
This figure likely includes thousands, if not tens of thousands, of infections and dozens of deaths among autoworkers, although a precise count is not publicly known because of an ongoing coverup of information relating to COVID-19 in the plants by the auto companies and United Auto Workers.
At the same time, GM and other auto companies, with the full complicity of the UAW, have imposed brutal levels of forced overtime and hired thousands of low-paid temps to replace workers who have taken time off out of health concerns or lack of child care.
The sharp increase in profits came despite the global microchip shortage, which has forced the company and its competitors to idle many of its plants for weeks at a time. The industry largely compensated for this, however, by shifting what supply of chips remained to plants making the most profitable models, mainly sports utility vehicles and pickup trucks. In addition, the company’s financial division benefited from the sharp spike in the prices of used cars caused by the ongoing shortages in new vehicles.
The Detroit-based automaker increased its sales by a whopping 40 percent. GM’s biggest surge came from high-end models produced at its Arlington Assembly Plant near Dallas, including the GMC Yukon (126 percent increase), Chevy Suburban (90 percent) and Cadillac Escalade (120.3 percent). The combination of rising sales and tightening supply has contributed to a situation where dealers are selling vehicles almost as soon as they arrive on the lot, with one dealer telling the Detroit Free Press his “turn rate” has declined nearly 90 percent from 112 to 12 days.
However, in many cases the auto companies have continued production at plants even without chips, stockpiling tens of thousands of unfinished vehicles awaiting chips before they can be shipped to dealers. The Detroit Free Press counted tens of thousands of such vehicles sitting in lots outside GM plants across the country, including 10,000 in Arlington alone. A local news report in May found that Ford was taking similar measures at its two auto plants in Louisville, Kentucky, with vehicles crammed into lots as far as 53 miles away from the plants.
One would expect that GM’s earnings would have been cause for sunny optimism among its investors. It also increased its year-end earnings forecasts, and CEO Marry Barra said in a statement that she expected the chip shortage to begin to clear up by the fourth quarter.
But for Wall Street, drunk on the biggest stock runup in history driven by the infusion of trillions in cash from the Federal Reserve, GM’s record quarter was not enough. According to Barron’s, which ran an article with the headline “GM Earnings Destroyed Expectations. Its Stock Is Dropping Like a Stone,” the automaker “also raised full-year operating-profit guidance from a range with a midpoint of $10.5 billion to a midpoint of $12.5 billion, implying earnings of about $4 billion in the second half of the year. Investors, however, wanted more.”
Wall Street punished the company by tanking its stock by more than 8 percent, the worst reaction to an earnings report in nearly a decade, according to Barron’s.
Investors are sending the message that they will not countenance any letup in the runup of profits by the increased exploitation of the working class. This is the chief consideration behind the elimination of all remaining safety measures by the Biden administration and state and local governments, including the planned reopening of schools to in-person instruction this fall. The reopening of schools in Detroit is seen as particularly vital for the auto industry to force workers, particularly mothers, back into the plants.
For workers, the past three months have been a continuation of the social disaster they have experienced for the past year. The auto companies and the UAW, following the lead of the Centers for Disease Control and Prevention, announced an end to all remaining safety measures, including temperature checks, cleaning breaks, social distancing measures during shift changes and universal mask requirements. However, the latest surge in cases has forced the UAW and the companies to reverse themselves on this last measure, first, in individual plants in states with high case rates, and then nationwide earlier this week.
One of the plants to officially reinstitute safety measures early was the Wentzville Assembly plant near St. Louis, Missouri, which produces the Chevrolet Colorado and GMC Canyon mid-sized trucks. GM reopened the plant on July 12, when it was already apparent that a new surge of the coronavirus was erupting in the state, which has been among the hardest hit in recent weeks. The company and the UAW waited a week before reintroducing a mask requirement at the plant on July 19.
However, a worker at the plant told the WSWS Autoworker Newsletter that in practice virtually all COVID safety precautions have been discarded. “It’s ridiculous. We don’t have sanitizer all over the plant anymore. Everyone is touching the same napkin dispenser to get a mask, no gloves, no sanitizing your work area, no temp taking. It’s a mess.”
She said that the mask requirement has been only haphazardly enforced. “Yesterday, I went to the snack machine, and the guy filling it up with products: no mask anywhere. The outside contractors are still working here: no masks. It’s a mess. What if someone gets really sick or dies? Is GM liable?
“They said today that the plant manager is supposedly going to be at the door to make sure people are wearing their masks when they leave. How’s the manager going to be at all three exits? There hasn’t been any social distancing on the shift change. They have been doing it like a herd of cattle.”
Neither the company nor the UAW has released any information on new cases of COVID-19 at the plant, either confirmed or suspected, she said. “Our dumb committee man hasn’t said anything.”
The state government is completely ignoring the crisis, she continued, as has been the case elsewhere. “Our governor is mostly concerned with holding the Missouri State Fair, which is going to be another super-spreader event. He has livestock and cattle he’s trying to sell. And [Chicago’s outdoor concert] Lollapalooza too, it was crazy. There’s no way they could monitor everyone coming in, a 100,000 people, was vaccinated or tested negative.”
A social and public health disaster is looming in the fall and winter. Only one month after Biden declared the pandemic over and called on people to “take [their] masks off,” coronavirus cases are up sharply, with more than 100,000 new cases a day. This will be compounded by the ending of temporary social assistance, such as the federal eviction moratorium, which Biden has only given a brief extension. Such measures will undoubtedly impact autoworkers heavily, among whom there are many who were working two or three jobs to makes ends meet even before the pandemic.
While no official figures have been released, it is likely that new outbreaks are already underway in plants throughout the country. There have been sharp increases in cases in Southern states with substantial auto production, such as Missouri, Tennessee and Texas, with Michigan not far behind. Yesterday, UAW Local 1264 sent out its first text alert in months notifying workers of a new COVID-19 case inside the Stellantis’ Sterling Stamping Plant north of Detroit.
“They don’t care about the workers,” a Louisville, Kentucky Ford plant worker told the Autoworker Newsletter about the auto companies raking in profits. “If that would be the case, they could distribute some of those profits to supplement workers’ food, rent, and other needs. It’s a travesty.”
However, the critical role in the auto industry’s profits has been played by the UAW, without whose assistance the Detroit automakers could not have posted such results. While concealing information the true spread of covid outbreaks in the plants through corporatist bodies such as the Joint COVID-19 Task Force, the UAW has worked to suppress and quarantine outbreaks of the class struggle in the auto industry.
For more than a month, the powerful strike by Volvo Trucks workers in Virginia was subjected to a total information blackout by the union, which did not even inform its membership in other plants that the strike was happening. However, when informed the strike by the World Socialist Web Site, autoworkers immediately expressed immense support for a joint struggle with Volvo workers. Indeed, only days after news of the Virginia strike reached a Volvo cars plant in Belgium from a WSWS campaign team, autoworkers at the plant carried out wildcat strikes against a company-union deal to extend their workweek.
The UAW eventually shut down the Volvo Trucks strike by forcing workers to vote again on a contract they had just rejected a week prior, claiming the re-vote passed by only 17 votes.
In March 2020 it was the action of autoworkers in Michigan, Indiana and Ohio, who conducted wildcat strikes in defiance of the UAW which led to the temporary shutdown of the auto industry saving countless lives. The subordination of human lives to the profits of the auto companies will only continue unless autoworkers continue to develop an organized opposition to the UAW’s betrayals through a network of rank-and-file committees in every plant.
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Blue State Blues: The Infrastructure Deal Is a Swampy Hoax
The $1.2 trillion “infrastructure deal” is a progressive-sounding label on old-fashioned pork. It will not grow the economy; it will not be “fully paid for,” as promised; and it will not even focus on the “roads and bridges” that are always being cited as the reason for the spending.
Though the media tell us that it will be a “huge political victory” for President Joe Biden, and a boon for Democrat-aligned interest groups, it is not clear what this bill does for the country.
Start with the economic news.
A major purpose of government investment in infrastructure is to provide the means for the private sector to generate economic activity. Public roads let firms move goods to market; aqueducts provide water to farms; trains help people get to work. Infrastructure projects also create direct and indirect jobs.
An infrastructure plan that fails to generate economic growth is worse than useless, a waste of public money that could be better spent.
So when the University of Pennsylvania Penn-Wharton Budget Model declared Thursday that the infrastructure deal would “have no significant impact” on economic growth, that ought to have ended debate on the matter.
That should also warn us that the main effect of the $1.2 trillion will be to divert capital that could actually have generated growth and will instead boost inflation even as lobbyists, unions, and the politicians who passed it eventually take their cut.
The Congressional Budget Office (CBO) also panned the deal, revealing Thursday that it would add a staggering $256 billion to the federal budget deficit. President Biden promised that the deal would be “fully paid for,” assuming that Congress also passed his “corporate tax plan.”
Even if taxes are raised to cover the shortfall, Biden would be asking taxpayers to pay more for a plan that will not grow the economy — in short, simply for the sake of paying the taxes.
Biden is constantly talking about how the infrastructure deal is necessary to spur investment in the technologies of the future, like the electric vehicles he was touting on Thursday. And yet the White House chose an outdated, hopelessly fossil-fuel dependent diesel locomotive as their symbol of the deal.
That reflected Biden’s romantic attachment to the Amtrak railroad service, a perpetual money loser except for the Acela line that Biden uses and which few can afford.
There was a New Deal quality to the White House advertisement — and that may be exactly why Biden likes it. He always promised to deliver the most “progressive” policies since FDR, and the $1.2 trillion deal gives him his chance.
Trump wanted to invest even more — $1.5 trillion — but to limit the federal government’s portion to $200 billion, with much of the rest coming from the private sector. That terrified Democrats and Republicans alike: no pork to spend!
What will the infrastructure deal actually do? The much-touted “roads and bridges” amount to $110 billion, less than ten percent of the total bill. The rest is a variety show that pointedly excludes “shovel-ready” infrastructure projects that are urgently needed, but which Democrats don’t like, such as the border wall or the Keystone XL pipeline.
Sen. Marsha Blackburn (R-TN) has proposed amendments to include them; it is notable that negotiators excluded them.
It is not clear what, in fact, Republicans obtained from their negotiations with Democrats on the deal, other than pork for their own constituents.
Sen. Mitt Romney (R-UT), that paragon of virtue, even admitted as such: “It’s fair to say if Democrats alone write an infrastructure bill, my state of Utah won’t be real happy by the time that’s done.” He had to be in on the deal, lest Utah be last in line at the trough. (I am certain there are Utahns who take a less pecuniary view.)
The Republican negotiators pride themselves on the $1.2 trillion price tag, which is something like half of what Biden initially demanded. But while Biden appeared to meet them halfway, he also promised another “infrastructure” bill, which would include everything Republicans rejected and would cost some $3.5 trillion.
Democrats still hope to push that bill through reconciliation, which Speaker of the House Nancy Pelosi (D-CA) said is a necessary prerequisite.
So there is no actual “deal” — just a vote on whether Republicans are going to share the blame for inflation, debt, and corruption. And if Blackburn’s amendments fail, then Republicans will share the blame for Biden’s decision to stop building the border wall during a migration crisis, and to kill the Keystone XL in the midst of an economic crisis.
The infrastructure deal is a swampy hoax — or, in more “progressive” terms: it restores the Washington wetlands.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
“Workers are starting to wake up”
Tensions high in Volvo Trucks plant at end of first week back after strike
Tensions remain high inside the Volvo Trucks plant in Dublin, Virginia, as workers complete their first week back after being on strike for five weeks. For most workers, today will be their last day before a regularly scheduled two-week summer shutdown for maintenance and equipment upgrades at the New River Valley (NRV) plant.
Nearly 3,000 workers conducted a courageous fight against both Volvo and the United Auto Workers (UAW). The UAW colluded with the Swedish-based multinational to impose a six-year contract, which will continue to boost profits at the expense of workers’ wages, benefits and working conditions. Since mid-April, the workers struck twice and rejected three UAW-backed agreements before the union forced a revote on the company’s “last, best and final offer” on July 14. The UAW claimed the deal passed by 17 votes out of the 2,369 ballots counted and shut down the strike.
The new contract will impose higher out-of-pocket health care expenses, force younger workers to labor six years or more to reach top pay and allow the continued imposition of forced overtime. Raises for the top-paid workers average only 2 percent a year, well below the current rate of inflation of 5.4 percent.
Since the return to work there has been a virtual standoff in the factory. Supervisors want to ramp up production to make up for lost output during the strike. Workers are steadfastly refusing to accept extra duties and faster line speeds. Anger has been further fueled by the release of Volvo Group’s second-quarter profits of $1.1 billion earlier this week, bringing its total income for 2020 to $2.4 billion.
“The first shift got their checks today, and it did not include the bonus or the raises from the new contract,” one worker told the WSWS. “Everybody gets two checks before the shutdown, and the raises are supposed to take effect right away. That didn’t happen, but the amount of money the UAW is taking out in dues is going up,” he said.
According to workers, management is scouring the plant for volunteers to work during the two-week shutdown, but they are getting very few takers. “Usually, they canvas once or twice a week for overtime, but every single day the bosses are coming around and asking, ‘You sure you don’t want to work?’ People are telling them, ‘Hell no, I’m not working.’ Workers are saying, ‘I’m going to work for what I’m worth to them.’ This is not going to be short-term but from now on.”
Newer workers who have been employed less than 90 days have no choice but to work during the shutdown, the worker told the WSWS. He also said there is a rarely used stipulation in the contract that allows management to make workers with fewer than three years work during the summer downtime if they get vacation time another time of the year.
“They are using that stipulation now with the full backing of the UAW to round people up for work,” the worker told the WSWS. “They’re going to run 20 trucks a day, which is a lot fewer than the 60-70 they ran before the strike.”
He also said workers are concerned that Volvo and the UAW might try to bring in 10-hour workdays after the break. “They said they took their demand for a four-day, 10-hour ‘alternative work schedule’ out of the contract, after we voted that one down. But there is fine print in the contract saying the UAW and the company can revise it by ‘mutual agreement.’ The union never showed us the full contract, and we only saw the tip of the iceberg of what is going to be changing. If they try to do this, it is going to open one big can of worms.
“It’s the little things they kept hid that’s going to start coming out. We found out this week the new hires who didn’t get their 90 days in before the strike but stood out on the picket line all these weeks with us are not going to get the signing bonus. That’s not right. They deserve it just as much as anyone else.
“We should have voted down the contract on principle, even if they tried to send us back to work. A lot of people are mad, and not a lot of work is being done. But all over the country and the world, workers are starting to wake up. If we don’t, they’re going to try to take everything away from us.”
A veteran Volvo worker told the WSWS, “Overall, I thought the third TA [tentative agreement] sucked. Our last two contracts were brutal, but this one was the worst. The biggest complaint I’ve heard is on health insurance. For workers who are married and/or have children, the insurance cost increases have really upset them. Several people I know said they are turning in their union cards. They’re going to use the dues money of $70 per month for their health insurance premiums instead. They figure they don’t get anything in exchange for their dues money anyway.”
The worker explained how the UAW conspired with the company to ram through the contract. “Of course, there was economic pressure to vote ‘yes.’ Many of my friends were dead up against it, terrified. Some of them care for their grandchildren and said, ‘I have to take whatever they offer.’
“Several workers who ended up voting ‘yes’ were in the process of applying for a home mortgage, and the bank told them they would have to cross the picket line by August or lose their approval and the home they were getting. They were in the middle of this huge purchase—their home—and felt that they had to vote ‘yes’ because the bank was basically forcing them to.”
Commenting on the pittance the UAW paid in strike benefits, the worker said, “Where do they come up with $275 per week? I know they have millions in the strike fund. The UAW took a long time on both strikes in April and June to get us our checks.”
He continued, “There was never any communications from anyone at the UAW during both strikes and leading up to them. It is sickening the way everything was handled. They were so misleading and underhanded through every bit of it.”
To oppose the sabotage of their struggle by the UAW and provide workers with a voice and real leadership, workers formed the Volvo Workers Rank-and-File Committee (VWRFC). With the assistance of the WSWS, the VWRFC broke the UAW’s news blackout and deliberate isolation of the strike and won support from Mack Trucks workers, autoworkers in Detroit and other cities and Belgian Volvo workers.
The VWRFC is campaigning for the expansion of a national and international network of rank-and-file committees to conduct a real fight to overturn decades of union-backed concessions.
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