OBAMA'S G.M. - IS IT HIS BIGGEST CON JOB YET?

JUST HAS THE PROFITS and CRIMES OF OBAMA’S CRIMINAL BANKSTER DONORS HAVE SOARED (as has foreclosures) OBAMA’S GM WELFARE PROGRAM HAS BENEFITED HIS PAYMASTERS AT THE COST, ALWAYS AT THE COST, OF THE WORKERS!

 

THERE IS NO GREATER CON JOB IN AMERICAN HISTORY THAN BARACK OBAMA!

 

AUGUST 21, 2012, 6:57 PM

Profits in G.M.A.C. Bailout to Benefit Financiers, Not U.S.

By STEVEN M. DAVIDOFF

Among the companies that were bailed out by the federal government during the financial crisis, perhaps the most intractable is proving to be the company formerly known as the General Motors Acceptance Corporation. It's a case study in how bailouts can linger and profits, when they do come, flow not to the government but to the Warren E. Buffetts of the world.

G.M.A.C. was the financial arm of General Motors. In the years leading up to the financial crisis, it was also G.M.'s most profitable unit, which tells you something about the auto industry at the time. The company earned more profit from lending money to customers than in selling cars.

In 2005, desperate to raise cash, General Motors sold a 51 percent stake in G.M.A.C. to the private equity firm Cerberus Capital Management. Cerberus beat out a rival,Kohlberg Kravis Roberts, for the privilege, spurring BusinessWeek to write that Henry R. Kravis's loss "has to sting."

During the financial crisis, however, the sting was felt on the other side, as G.M.A.C. staved off collapse thanks only to a government infusion of $17.2 billion. The company was renamed Ally Financial - you have probably seen its catchy commercials on television. The Treasury Department owns 73.8 percent of Ally, with Cerberus retaining an 8.7 percent stake.

Almost since that time, the Treasury Department has wanted to rid itself of its Ally stake. Ally filed for an initial public offering in March 2011, but it has so far languished in the face of a weak market and concerns over Ally itself. The Treasury Department has been paid back about $5.7 billion and still controls the company through its stock ownership and appointment of a majority of Ally's directors.

Despite lingering concerns about Ally, the automobile sales market is recovering and Ally's auto finance operations turned a profit last year. But Ally is still suffering from legacy debts, primarily concentrated in its ResCap unit. While you might think that with a name like G.M.A.C., the company financed only automobiles, but the company was also one of the largest subprime housing lenders through its ResCap subsidiary.

ResCap, a wholly separate entity owned by Ally, is the fifth-largest mortgaging servicer and origination unit in the nation, serving 2.4 million mortgages with a principal of $374 billion. The business has lost billions since the financial crisis, and the never-ending stream of losses has made investors fearful. They should be. Ally has lent ResCap $1.2 billion and has provided an infusion of $10.3 billion since Jan. 1, 2007.

Ally's chief executive, Michael A. Carpenter, has stated that his priority is to repay the American taxpayer rather than support ResCap. In 2011, ResCap disclosed a loss of $845.1 million and its financing has been drying up as the market realized that Ally would no longer be ResCap's sugar daddy.

It's still unclear why Ally didn't put ResCap into bankruptcy instead of providing billions in support. One explanation may be that Ally wasn't stable enough at the time to risk the market reaction to a bankruptcy and the possibility that Ally's own financing might dry up as a result. In addition, ResCap turned a profit in 2010, but has since been overwhelmed by litigation and bad subprime loans.

Whatever the reason, Ally finally bit the bullet and put ResCap into bankruptcy in May this year, presumably hoping that this would make Ally more attractive itself for an I.P.O. or sale.

ResCap filed for bankruptcy with a huge $1.25 billion loan from Barclays and up to an additional $220 million available from Ally. The initial bankruptcy plan was for ResCap to split up, with the mortgage servicing business being sold to Fortress Investment Group for about $2.3 billion. A legacy portfolio of $5.2 billion in mortgage loan principal would be sold separately. At the time of the bankruptcy, Ally announced its intention to serve as a stalking horse bid for the legacy portfolio, bidding from $1.4 billion to $1.6 billion.

Enter the greatest investor of our time.

One of Ally's biggest creditors at that time was Mr. Buffett's Berkshire Hathaway, which held more than $500 million of ResCap's unsecured bonds and $900 million in ResCap's junior secured bonds. Berkshire has since sold the unsecured bonds but has also joined the fray. It announced in June that it would bid for the mortgage servicer, and offer $1.45 billion for the legacy loan portfolio. The investment firm Lone Star Funds has also stated its interest in buying one or both.

Ally has now bowed out and Berkshire has replaced it as the stalking bidder for the loan portfolio. This fall, a bankruptcy court will hold an open auction for both businesses. We don't know who will buy these businesses, but it won't be Ally, which has left the scene after losing billions.

When asked for comment on why it was no longer bidding, an Ally spokesman expressed the intention for Ally to focus on its core businesses where Ally has a "leading position and competitive strengths, and that includes the auto finance and direct banking franchises."

Ally's initial gambit as a stalking horse bid has succeeded in bringing bidders to the table and maximizing the value of ResCap. But it's hard not to think that if Ally were not a ward of the government, this might have turned out differently. Having come so far and invested more than $10 billion, Ally might want to bid for those assets, using its prior ownership to gain an advantage. After all, now there appears the potential to profit.

But the costs and uncertainties of continuing in the mortgage business are significant, and Ally does not appear to want to take that risk. At the time of the bankruptcy, the Treasury Department stated that its "objective today is to exit in a manner that balances speed of recovery with maximizing returns for taxpayers" and that it believes that the ResCap bankruptcy will "put taxpayers in a stronger position to maximize the value of their remaining investment in Ally."

That's the problem with companies being bailed out. They're no longer as entrepreneurial or risk-taking as they might be, and instead have to balance gains against a need to pay back the government. Now that housing is in a fitful recovery, smart financiers are returning to this market. Ordinarily, this would be a good situation for Ally to buy back the assets in bankruptcy. But it will be private investors - and potentially Mr. Buffett - who will profit from ResCap's carcass.

And with the Treasury Department still in the hole for more than $11.5 billion with Ally, it is already facing a significant period before the government is paid back in full. The Treasury Department expects that it will be repaid a substantial portion of the government's investment in Ally, if not the full amount.

Though Ally operates independently, the Treasury Department, as Ally's owner, is not likely to have the patience to wait longer for ResCap. When the government is your lender, paying back the money is your first goal.

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NEW YORK TIMES

December 23, 2008

Op-Ed Columnist

A Race to the Bottom

By BOB HERBERT

Toward the end of an important speech in Washington last month, the president of the American Federation of Teachers, Randi Weingarten, said to her audience:

“Think of a teacher who is staying up past midnight to prepare her lesson plan... Think of a teacher who is paying for equipment out of his own pocket so his students can conduct science experiments that they otherwise couldn’t do... Think of a teacher who takes her students to a ‘We, the People’ debating competition over the weekend, instead of spending time with her own family.”

Ms. Weingarten was raising a cry against the demonizing of teachers and the widespread, uninformed tendency to cast wholesale blame on teachers for the myriad problems with American public schools. It reminded me of the way autoworkers have been vilified and blamed by so many for the problems plaguing the Big Three automakers.

But Ms. Weingarten’s defense of her members was not the most important part of the speech. The key point was her assertion that with schools in trouble and the economy in a state of near-collapse, she was willing to consider reforms that until now have been anathema to the union, including the way in which tenure is awarded, the manner in which teachers are assigned and merit pay.

It’s time we refocused our lens on American workers and tried to see them in a fairer, more appreciative light.

Working men and women are not getting the credit they deserve for the jobs they do without squawking every day, for the hardships they are enduring in this downturn and for the collective effort they are willing to make to get through the worst economic crisis in the U.S. in decades.

In testimony before the U.S. Senate this month, the president of the United Auto Workers, Ron Gettelfinger, listed some of the sacrifices his members have already made to try and keep the American auto industry viable.

Last year, before the economy went into free fall and before any talk of a government rescue, the autoworkers agreed to a 50 percent cut in wages for new workers at the Big Three, reducing starting pay to a little more than $14 an hour.

That is a development that the society should mourn. The U.A.W. had traditionally been a union through which workers could march into the middle class. Now the march is in the other direction.

Mr. Gettelfinger noted that his members “have not received any base wage increase since 2005 at G.M. and Ford, and since 2006 at Chrysler.”

Some 150,000 jobs at General Motors, Ford and Chrysler have vanished outright through downsizing over the past five years. And like the members of Ms. Weingarten’s union (and other workers across the country, whether unionized or not), the autoworkers are prepared to make further sacrifices as required, as long as they are reasonably fair and part of a shared effort with other sectors of the society.

We need some perspective here. It is becoming an article of faith in the discussions over an auto industry rescue, that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.

That’s fine if it’s agreed to by the autoworkers themselves in the context of an industry bailout at a time when the country is in the midst of a financial emergency. But it stinks to high heaven as something we should be aspiring to.

The economic downturn, however severe, should not be used as an excuse to send American workers on a race to the bottom, where previously middle-class occupations take a sweatshop’s approach to pay and benefits.

The U.A.W. has been criticized because its retired workers have had generous pensions and health coverage. There’s a horror! I suppose it would have been better if, after 30 or 35 years on the assembly line, those retirees had been considerate enough to die prematurely in poverty, unable to pay for the medical services that could have saved them.

Randi Weingarten and Ron Gettelfinger know the country is going through a terrible period. Their workers, like most Americans, are already getting clobbered and worse is to come.

But there is no downturn so treacherous that it is worth sacrificing the long-term interests — or, equally important — the dignity of their members.

Teachers and autoworkers are two very different cornerstones of American society, but they are cornerstones nonetheless. Our attitudes toward them are a reflection of our attitudes toward working people in general. If we see teachers and autoworkers as our enemies, we are in serious need of an attitude adjustment.

…………….

Wsws.org

Pay cuts, layoffs mount in US (and watch how the politicians bust their ass solely for the corporate interests, i.e., massive welfare for the bankers that caused this meltdown, but NO help for those foreclosed on!)

By Tom Eley
23 December 2008

The US government loans to the auto industry, conditioned on a massive attack on the wages and jobs of auto workers, are being used as a spearhead for broader attacks on the working class throughout the country. This attack has already begun, with numerous companies recently announcing pay cuts and layoffs for the coming year in response to the deepening economic crisis.

Many of the new pay cuts affect salaried positions. While cuts to the pay packages of top executives are largely designed to lend the impression of “shared sacrifice,” the salaries and pensions of wider layers of managerial and professional personnel—a large component of the US “middle class”—are being significantly reduced.

On December 18, FedEx Corp., one of the largest US parcel delivery services, announced plans to cut pay for more than 35,000 salaried employees. It will also indefinitely freeze its contributions to over 140,000 employee 401(k) retirement accounts. In announcing the pay cuts, Frederick W. Smith, FedEx founder and CEO, said that the corporation was “being challenged by some of the worst economic conditions in the company’s 35-year history.” Only one month ago the third largest US parcel delivery service, German-owned DHL, announced the suspension of its US operations and layoffs totaling 9,500 workers.

Caterpillar, the leading manufacturer of construction vehicles, has announced pay cuts ranging between 15 percent and 50 percent for all levels of management. It is also offering voluntary buyouts to its American workforce until January 12. Last week, Caterpillar announced 814 layoffs from its Mossville, Illinois, engine factory.

On Monday, Kemet Corp., a digital parts maker based in North Carolina, said it would cut pay for salaried employees by 10 percent percent beginning January 1 and will indefinitely suspend contributions to its 450 workers’ 401(k) retirement plans. It will also make permanent cuts to insurance benefits for its retirees and fire 1,500 workers in China, Europe, and Mexico, the Greenville News reported.

Last week, Motorola Inc. announced plans to freeze salaries and suspend payments to employee retirement accounts, and Agilent Technologies Inc. said it will cut pay by 10 percent for its global workforce of 20,000. Atlas World Group Inc., the second largest US moving and storage company, based in Evansville, Indiana, said it would cut the pay of its salaried personnel by 5 percent across the board.

On December 16, the nation’s largest electronics and appliance retailer, BestBuy, tendered buyout offers to virtually its entire corporate workforce. The Minnesota-based corporation has seen a sharp decline in sales and profits. Rival Circuit City filed for bankruptcy in early November.

The take backs have emerged as a widespread trend. According to a New York Times report published December 21, “a growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.”

“The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics,” the Times reported.

Similar measures are being carried out by state and municipal governments, and by colleges and universities.

The city of Galveston, Texas, has demanded a 3 percent pay cut from its municipal workforce of more than 700. The city faces a current budget shortfall of $3.6 million, which is expected to expand by about $2 million when in April property tax appraisals are expected to show a sharp decline in revenue.

Tehama County in California has ordered a pay freeze for its employees, and has indicated it will also furlough workers in the coming months.

(CA PUTS OUT $20 BILLION PER YEAR IN SOCIAL SERVICES TO ILLEGALS! EVERY MEXIFORNIA DEM WANTS NO BORDERS, AMNESTY, NO I.D. REQUIREMENTS THAT MIGHT TROUBLE VOTING ILLEGALS, NO E-VERIFY, WHICH HAS NOW BEEN OUTLAWED IN CA, AND MUCHO DREAM ACTS TO INDUCE MORE ILLEGALS TO CLIMB OUR BORDERS)

The state of California, which faces an acute budget crisis, has ordered a new round of pay cuts and layoffs. On Thursday, Governor Arnold Schwarzenegger issued an Executive Order calling for mandatory furloughs of two days per month for state workers beginning in February and lasting through June of 2010.

The Pennsylvania State University system recently joined the large number of colleges and universities that have enacted pay as well as hiring freezes, canceling job searches for vacant positions. The cancellation of numerous academic job searches, coupled with growing numbers of professors delaying retirement due to declines in their retirement accounts, have combined to create one of the worst job markets for recent PhDs in years.

Analysts consider pay cuts and hiring freezes as a first response for many companies to the economic crisis. A survey carried out by the labor relations firm Mercer in early November—well before the full brunt of the financial crisis had registered in the real economy—found that 35 percent of 1,028 companies it surveyed are planning “significant” workforce reductions in 2009, and that most “are likely to curtail overall hiring, [and] reduce 2009 salary increases and cut bonus payouts.”

Patricia A. Milligan, Mercer’s Chief Markets Officer, said that thus far in the economic crisis most companies “have refrained from … deep workforce cuts, across-the-board salary freezes, reductions in defined contribution plan contributions, or elimination of certain health benefit programs,” but that these decisions will be reconsidered after corporations look at their year-end books and worsening business forecasts. It is likely that an intensification of layoffs and pay cuts will emerge in January.

Another survey conducted in early December by the consulting firm Watson Wyatt Worldwide Inc. among 117 employers, found that 5 percent had already reduced salaries as a response to economic crisis and another 6 percent said they would follow suit in the coming year. On the other hand, 52 percent have already made job cuts or intend to do so by the end of 2009.

Mass layoffs continue to mount in the US and worldwide. The global advertising giant Omnicom has announced plans to fire up to 5 percent of its 70,000 global workforce. Two insurance corporations recently announced mass layoffs: Aetna will cut 3 percent of its workforce of over 36,000, while Genworth Financial will lay off 1,000 workers, over 13 percent of its employees. Newell Rubbermaid, a manufacturer of household storage products, has announced it will cut as much as 10 percent of its salaried labor force and will put in place a wage and salary freeze for 2009. The hard-drive maker Western Digital Corp., will eliminate 2,500 jobs, approximately 5 percent of its global workforce.

The financial services firm Northern Trust Corp. will cut 450 jobs in 2009. Baldor Electric Co. will eliminate 900 jobs by June. Microcontroller producer Atmel will purge 11 percent of its workforce in North America, while pharmaceutical firm Bristol-Myers Squibb will cut 10 percent through 2010, according to the AP, including 800 immediate layoffs.

The video game maker Electronic Arts Inc. has announced layoffs of 1,000, about 10% percent of its workforce. One of its rivals in the video game industry, Midway, will cut 25% of its employees.

*

REALITY CHECK:
Obama’s first 100 days and counting have been nothing but selling us out to WALL STREET, BIG BANKERS, SAUDIS, and now, ILLEGALS, just as we were victimized by 20 years of BUSH, HILLARY, BILLARY, BUSH!

NAME ONE PROMISE HE MADE THAT HE HASN’T ALREADY BROKEN!

OBAMA’S next agenda when he finishes KISSING BIG BUSH SAUDI CARLYLE GROUP ASS ENOUGH: AMNESTY!

He’s already backed-off E-VERIFY per orders from the U. S. Chamber of Commerce, LA RAZA, “THE RACE”  the political party of the Mexican occupation, and the WALL STREETERS HE REALLY WORKS FOR!

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Get on the daily free news emails at wsws.org for the NON corporate rape and pillage slant!

*

Obama offers nothing to states, cities devastated by GM plant closures

By Tom Eley
3 June 2009

Plant closings resulting from Monday’s forced bankruptcy of General Motors will cause spiraling unemployment and deep cuts in social services in many cities and states across the country. The Obama administration, whose Auto Task Force dictated the terms of the bankruptcy, has offered no serious aid to the affected workers and their communities.

GM is carrying out at least 21,000 job cuts and the closure of 14 plants and warehouses in eight states. In addition, the company has announced its intention to dump franchise agreements with 2,300 dealerships by the end of next year. Many of these will be forced to close, eliminating as many as 100,000 jobs in all 50 states.

The gutting of GM, once the most powerful corporation in the world and a symbol of US industrial might, will send shock waves through the economy, cascading into more layoffs at parts suppliers and financial ruin for thousands of small businesses.

The bankruptcy will immediately result in state and local cuts in social services, health care and education, with city and state workers targeted for layoffs, wages cuts and other concessions. It will accelerate the foreclosure crisis and further drive down home prices, as tens of thousands of workers are no longer able to meet their mortgage payments.

The Obama administration is using the concessions and layoffs, agreed to by the United Auto Workers, to attack the wages and benefits of the entire working class. Corporations will take the concessions imposed on auto workers as a signal for similar measures against their own workers.

The state of Michigan, which already has the highest unemployment rate in the nation at 12.9 percent, will bear the brunt of the closures, with 42 percent of all national GM layoffs taking place there. Nearly 9,000 jobs will be lost in Michigan from Monday’s announced plant closures. The shutdowns are concentrated in southeast Michigan. They will be carried out in Flint, Livonia, Orion Township, Pontiac and Ypsilanti Township. On Friday, 700 workers were laid off when GM shuttered a stamping plant in Grand Rapids, in southwest Michigan.

It is estimated that since 2000, Michigan has lost 17 percent of its jobs—about three quarters of a million in all—as a direct result of the crisis in the auto industry. Now the state anticipates 520,000 job losses this year and next.

The consequences for the state’s limited social welfare system will be disastrous. According to one estimate, Michigan could lose an additional $18.3 billion in income. It already faces a $3 billion two-year budget shortfall, and officials recently revised downward their revenue estimate for the 2010 fiscal year by $1.7 billion, calling for an across-the-board spending cut of 8 percent.

“It’s clearly going to impact the safety net,” Governor Jennifer Granholm warned. “People, who are hurting, need services more, and we have fewer dollars.” Michigan has already carried out $300 million in budget cuts for the current fiscal year.

Oakland County in suburban Detroit will lose three factories and 6,600 jobs, the most of any county. Oakland County was already in difficult financial straits due to declining property tax revenue, a result of layoffs and the foreclosure crisis. The loss of GM-related tax revenue will result in layoffs for county workers and sharp cuts in social programs, said Bob Daddow, Oakland County’s deputy executive. “I will be going to war,” Daddow told the Detroit News. “We will need to make cuts in all departments. We have been doing these cuts all along...but the worst is yet to come on governmental revenues.”

The closure of the GM Truck and Bus plant will deepen the social crisis in impoverished Pontiac, Michigan. About 1,100 workers will lose their jobs, and the city will lose 20 percent of its current tax base, or $10 million, said Fred Leeb, the city’s emergency financial manager. Leeb made clear that Pontiac’s working class would pay the price for the shutdown. “We fear that we are going to have to cut even more deeply,” he told the Detroit News. “And there will be concessions to ask from the (city) unions.”

Flint, Michigan has lost about 50,000 GM jobs in 30 years. One thousand more were added to the grim tally when GM said Monday it would close its Powertrain Flint North plant. Monday night, the Flint City Council met to enact a series of measures to bridge a $13 million budget deficit, including the layoff of about 90 firefighters and police and the shuttering of a fire station.

The city of Livonia, an inner-ring suburb of Detroit, will lose its GM engine plant, and with it $474,000 in annual tax revenue, about 1 percent of its total. City workers have already been asked to accept pay cuts. The Detroit-Livonia-Warren area had an unemployment rate of 14 percent as of May.

Ypsilanti’s Willow Run transmission plant laid off 600 workers on Monday, and 500 more jobs will be shed by December 2010. The township will lose 4.4 percent of its tax revenue, and Washtenaw County will see a loss of $3.8 million in tax receipts. The Ypsilanti Public Schools confront a $1.4 million deficit, which will be met primarily through teacher layoffs. The city faces a budget deficit of almost a half million dollars.

In Livingston County, Michigan, the GM bankruptcy may lead to a number of parts suppliers shutting down. Already hundreds of auto parts workers have lost their jobs in recent months, according to the county’s Economic Development Council director, Fred Dillingham. Metaldyne, which employs 100 workers in the county, last week filed for bankruptcy protection. “We have a number of companies with as much as 90 percent of their business from GM. We have an awful lot of trickle-down effect from GM,” Dillingham told Livingston Community News.

The closure of GM Mansfield in Ontario, Ohio is likely to result in the elimination of city jobs and pay cuts for municipal employees. With revenues already down a quarter million dollars, the city is bracing for disaster.

Spring Hill, Tennessee, which has seen its Saturn plant idled, most likely to be closed permanently, was a single-industry town. When GM opened the plant in 1990, fewer than 1,500 people lived there. Now it has 24,000 inhabitants.

The collapse of the Big Three has brought with it a sharp decline in funding for the arts and culture. The General Motors Foundation, which contributed $31.4 million to the arts in 2007, has told many art and cultural organizations, “mostly in Detroit,” not to count on any contributions this year, the Financial Times reported last week. Toledo, Ohio, recently announced that its three-day jazz festival, the Art Tatum Jazz Heritage Festival, would be cancelled this year after Chrysler said it would no longer provide $100,000 in annual funding.

In the face of this mounting social crisis, President Barack Obama has offered little more than rhetorical palliatives, telling workers that their “sacrifices” will ensure the future for coming generations. But for the auto workers’ children, the future foretells poverty amidst a crumbling social safety net.

On Tuesday, Obama sent Edward Montgomery, his director of recovery for auto communities and workers, along with Labor Secretary Hilda Solis, to tour a Romulus, Michigan GM plant that thus far has not been slated for closure. This was followed by Solis’ appearance at a “worker round table” at Eastern Michigan University in Ypsilanti, the ostensible purpose of which was to discuss the retraining of workers for new jobs in the “green economy.”

The meeting was little more than a media stunt organized by the Democratic Party and UAW executives to present the Obama administration as a defender of jobs and divert working class anger along nationalist lines.

In her remarks, Solis outlined a series of “job training” programs that will supposedly equip workers for new high-tech and environmentally-friendly industries. But as Solis and Obama well know, these token programs cannot possibly provide decent employment for the vast majority of the workers who are losing their jobs as a result of the administration’s auto industry policy.

In what is shaping up as the worst job market since the Great Depression, even college graduates—many with degrees in engineering, computer science, robotics and management—face the highest rate of unemployment for those with a four-year degree in decades.

Among the Obama administration initiatives Solis outlined was $49 million in assistance to Michigan workers who have lost jobs due to “international trade,” federal assistance for the weatherization of homes, and summer youth programs. These are already existing programs. She could not announce any new programs to deal with the social crisis created by the bankruptcy of GM because the Obama administration has no plans for such programs.

After Solis spoke, the panel discussion was turned over to a number of local Democratic Party politicians and union officials. Don Skidmore, the Willow Run UAW local president, set the “America first” tone, declaring, “We’ve got to stop the bleeding of American jobs south of the border!” Another speaker demanded to know why Toledo, Ohio was able to keep its GM engine plant open.

UAW official Donnie Enersen denounced immigrant workers. “They’re coming into America, not paying taxes, not paying into Social Security,” he said.

The union officials are seeking to divide workers along national and even regional lines, in order to deflect attention from their real enemies—the Obama administration and the Wall Street financiers who are behind the carve-up of GM.

The World Socialist Web Site spoke with a small number of workers, most of whom were recently retired, who came to the meeting to demonstrate against the closure of the Willow Run plant. Corky, a GM worker with 12 years, said, “We thought we were going to stay open until 2010. On Friday when we walked out of work we thought we would be coming back in mid-July. I got a call from a fellow worker that night saying we were no longer going to work there.

“It’s unfair. We’ve made enough sacrifices. I’m tired of it. This was my seventh GM plant. For two-and-a-half years I was driving down to Toledo, Ohio to work, even when gas was $4 a gallon. I’ve made sacrifices. My dad is a retired GM worker and his benefits are being cut. I put my blood and sweat into every transmission that comes off the line.

“Yesterday when they announced the bankruptcy and plant closing I was all tears and emotions. Now I’m angry.”

*

Obama prepares sweeping cuts in social programs

8 January 2009

Barack Obama took the occasion of his first press appearance in Washington as president-elect to declare his determination to impose policies of budgetary austerity, including the elimination of entire federal programs and cost-cutting in the entitlement programs such as Social Security, Medicare and Medicaid that are of vital importance to tens of millions of elderly and poor people.

Obama announced his appointment of Nancy Killefer, a director at the management consulting firm McKinsey & Co., to a new White House post of chief performance officer. Killefer, a Treasury official in the Clinton administration, will be in charge of setting performance standards for federal agencies and enforcing them on agency officials. Those programs that fail to meet these standards will be targeted for reorganization or elimination.

The president-elect made the statement on the eve of a speech Thursday in which he will make the case for a proposed stimulus package. It was a clear effort to appease both congressional Republicans and the sizeable faction of fiscal conservatives among the congressional Democrats, reassuring them that while unlimited funds are to be provided to bail out big business, there will be a tight rein on spending for programs that support the needs of working people.

Obama's remarks on Wednesday shed light on the basic character of his stimulus plan, which is tailored to the demands of the financial and corporate elite and will provide hundreds of billions in additional public funds to prop up corporate profits, while doing little to provide relief for tens of millions of working people facing the deepest slump since the Great Depression.

Obama noted the Congressional Budget Office (CBO) estimate released Wednesday that the federal deficit for the current fiscal year will top $1.2 trillion, without counting any additional spending for the economic stimulus plan that the Obama administration and Congress will enact after his inauguration. "Trillion dollar deficits will be a reality for years to come," he warned, declaring that containing the deficit and putting the lid on federal spending must become "fundamental principles of government."

When a reporter from the Wall Street Journal asked about Medicare and Social Security, noting that these were among the largest federal expenditures, Obama replied, "We are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part, a central part, of those plans." He added that once the stimulus package was adopted, by mid-February, "we will have more to say about how we're going to approach entitlement spending."

These remarks and comments by Democratic congressional leaders are a warning of what is to come: a frontal assault on the most important components of what remains of a social safety net in the United States—the programs that provide at least minimal retirement benefits and medical coverage for tens of millions of elderly people, as well as medical coverage for millions of low-income families.

While both Social Security and Medicare are solvent, currently taking in more tax revenues than they pay out, the Social Security Trust Fund, which represents the accumulated contributions of three generations of working people, has been effectively plundered to pay for the Bush administration's tax cuts for the wealthy, two wars and the immense US military establishment.

Out of $10.7 trillion in total federal debt, about 40 percent, or $4.3 trillion, is borrowed from Social Security. The Trust Fund is the largest holder of federal debt, followed by US private investors, who hold $3.4 trillion, and foreign investors, many of them governments, who hold $3 trillion.

The CBO figure of $1.2 trillion likely underestimates the current year's deficit by a significant amount. It includes nothing for the stimulus package which has yet to be spelled out in detail by the incoming administration, and assumes no emergency spending to finance Obama's promised buildup of US military forces in Afghanistan. Reuters reported Wednesday that Obama's secretary of defense, Robert Gates, a holdover from the Bush administration, is requesting an additional $70 billion for the ongoing wars in Iraq and Afghanistan, not counting the additional cost of a doubling of US forces to some 60,000 in Afghanistan.

The CBO estimates that the US unemployment rate, at 6.7 percent in November, will rise to 9 percent by the end of this year, although many economists project a rate of 10 percent or more. Double-digit unemployment would drive up spending on jobless benefits, food stamps and Medicaid, among other programs, swelling the deficit even further.

The CBO also placed the cost of the Treasury bailout of Wall Street at $180 billion in 2009, although Congress is expected to authorize an additional $350 billion on top of the $350 billion already expended since October. The bailout of Fannie Mae and Freddie Mac, the two government-sponsored mortgage finance companies brought down by the subprime mortgage crisis, will add another $240 billion to the deficit.

Senate Budget Committee Chairman Kent Conrad, Democrat from North Dakota, echoed Obama's warning of trillion-dollar deficits for several years, as well as his pledge to tackle long-term problems in the financing of Social Security and Medicare. He told the press, "It would send a very healthy message to the markets and the American people if President-elect Obama were to simultaneously announce an economic recovery package and the beginning of a bipartisan process to deal with our long-term imbalances."

House Majority Leader Steny Hoyer, who has close ties to the right-wing faction of House Democrats, the so-called Blue Dogs, added his voice to the chorus calling for long-term deficit-reduction measures, going so far as to suggest that the Obama administration might have to follow the example of the Republican administrations of the 1980s, when White House budget officials engaged in across-the-board budget cuts by executive order, a process called "sequestering."

Congressional Democrats opposed sequestering 20 years ago, pointing out that there was no constitutional authority for such executive action without congressional authorization. It is a measure of how far to the right the Democratic Party has moved that one of its top leaders now embraces such a policy.

Robert Bixby, director of the Concord Coalition, a bipartisan group that advocates fiscal austerity, provided an indication of what is being contemplated, saying, "I would analogize it to what the government is doing with the auto companies. Congress said, we'll give you the money but you have to show us a plan for sustainability." In return for emergency loans to the US auto companies, Congress demanded tens of thousands of layoffs, the closure of dozens of plants and draconian cuts in auto workers' wages and benefits.

Four years ago, George W. Bush began his second term as president by proposing a sweeping privatization of Social Security, a measure which was never formally introduced in Congress due to overwhelming popular opposition. The plan was quietly shelved after the debacle of Hurricane Katrina demonstrated the Bush administration's gross incompetence and utter indifference to the plight of poor and working class Americans. It has thus been left to Obama, who occasionally postures as the heir of Franklin Roosevelt, to take responsibility for dismantling the last legacy of the New Deal.

Patrick Martin

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http://mexicanoccupation.blogspot.com/2012/02/obama-gm-their-crimes-of-change.html

 

REALITY: FROM HIS FIRST DAY IN OFFICE, WALL ST-OWNED BARACK OBAMA HAS SERVICED THEM ON HANDS AND KNEES USING THE SAME OBAMA PARADIGM OF PROTECTING THE CRIMINAL MANAGEMENT OF THESE BIG BUSINESSES, AND MAKING SURE THE EMPLOYEES GOT THE SHAFT BIG TIME!

IN A PERFECT LA RAZA MOMENT, OBAMA WOULD HAVE HIS HORDES OF ILLEGALS IN EACH AND EVERY JOB TO KEEP WAGES DEPRESSED TO THIRD-WORLD LEVELS. OBAMA HAS SABOTAGED E-VERIFY AROUND THE NATION TO  IMPLEMENT THIS!

OBAMA – HE’S A WALKING CON JOB!

 

THIS IS OBAMA’S REAL BAILOUT OF G.M.:

“The record profits owe largely to the cuts imposed on auto workers in the United States and Canada, under the auspices of the United Auto Workers and Canadian Auto Workers unions, including a new starting wage of barely $14 an hour, half the basic wage for longtime workers, and cuts in health benefits, pensions and health care for retirees.”

GM posts record profits, prepares more cuts

By Patrick Martin
18 February 2012

General Motors reported a record $7.6 billion profit for 2011 Thursday, but the largest US automaker made clear that it would continue to pursue cuts in jobs, wages and benefits for its worldwide workforce, with the direct assistance of the United Auto Workers.

It was the eighth consecutive quarterly profit for the company since its forced bankruptcy in 2009, but the smallest during that period, a signal that further cost-cutting measures will be demanded by the financial markets. Worldwide revenues rose 11 percent to $150.3 billion, but profits soared 62 percent compared to 2010.

GM was fueled by record pretax profits of $7.2 billion in North America. Asian operations also posted a significant profit, about $1.8 billion, but GM lost money in South America and particularly Europe, where its subsidiaries have accumulated losses of $14 billion since 1999.

Global sales rose 7 percent to 9.03 million vehicles, putting GM once again in first place, surpassing Toyota. But fourth quarter revenue was only $500 million, or 28 cents a share, significantly below analyst expectations, which averaged 42 cents a share.

Chairman and CEO Dan Akerson—whose own salary and bonus approach $10 million—hailed the results of 2011, which included cost-cutting measures that had the effect of “reducing our break-even level in Europe and South America and driving higher revenues around the world.”

The record profits owe largely to the cuts imposed on auto workers in the United States and Canada, under the auspices of the United Auto Workers and Canadian Auto Workers unions, including a new starting wage of barely $14 an hour, half the basic wage for longtime workers, and cuts in health benefits, pensions and health care for retirees.

While the company made a $7.2 billion profit in North America, nearly $150,000 for every one of its 47,500 US production workers, these workers will receive a derisory $7,000 in profit-sharing checks in March.

No sooner than it broke its previous record for profits, than the company announced a new attack on white-collar workers. GM said Wednesday it would freeze its pension plan for 19,000 US workers hired before 2001, shifting them to a 401(k) plan with a defined contribution and no guaranteed benefit. Salaried workers hired after 2001 are already denied a pension. The company will also institute annual bonuses rather than pay increases for its 26,000 salaried employees.

GM spokesmen emphasized the company’s focus on improving margins in its European operations, which lost $727 million last year. Last month Akerson placed Vice Chairman Steve Girsky in charge of the European management board, and shifted a group of US-based executives across the Atlantic.

Particularly critical will be the role of United Auto Workers President Bob King, who is to be named to the supervisory board of GM’s German subsidiary, Adam Opel AG, according to a report Monday in the German publication Handelsblatt. The supervisory board has 20 seats divided equally between GM management and the IG Metall union, which will nominate King as one of its representatives.

Press coverage of the King nomination suggested that his selection was “another sign of how serious the Detroit automaker is about restructuring Opel,” the Detroit News observed. “The company is reportedly working on a major restructuring of Opel and its broader European business that will likely entail plant closings and significant concessions from unions—the same sort of concessions that GM won from the UAW during the economic crisis in the United States.”

The Detroit Free Press headlined the same decision: “GM putting new team in charge of Europe; UAW President Bob King to join Opel board.” As the title demonstrates, King is regarded as an integral part of the GM “team” that will spearhead the company’s cost-cutting drive at its German subsidiary.

Reuters news agency put it even more bluntly, reporting the selection of King under the headline, “As Opel losses mount, GM seeks union-backed cuts.” The article noted that an IG Metall leader visited King in Detroit before his appointment, confirming that the German trade union executives are joining forces with their American counterparts and the corporate bosses to gang up against the workers on both continents.

The most likely outcome of these backroom consultations is a decision to close several GM plants in Europe, most likely the Opel plant at Bochum in the Ruhr, with 3,100 workers, and the Vauxhall plant at Ellesmere Port near Liverpool in Britain’s blighted industrial northwest, with 2,100 workers.

The collaboration of the unions is essential to GM to strangle resistance from the workers. An analyst for HIS Global Insight wrote Wednesday, in a research note, that the shakeup in GM’s European leadership “would indicate that the company is foreseeing some major industrial unrest as a result of the expected restructuring plan.”

Under the impact of the global financial collapse and the crisis in the euro zone, car sales have fallen 15 percent in 2011 compared with 2007 and are projected to decline another 6 percent this year.

“There is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough,” one company official told the Wall Street Journal. “If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep.”

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