Wednesday, September 11, 2019

DEMOCRAT CONTROLLED MELTDOWN DETROIT LOOTS MIDDLE AMERICA TO PAY WALL STREET

How Detroit Democrats handed Fiat-Chrysler $400 million for a new assembly plant

When Fiat Chrysler Automobiles (FCA) announced last February that it planned to invest $4.5 billion in Southeast Michigan—including the construction of the first new auto assembly plant in Detroit in decades—the corporate media, local Democratic Party politicians and the United Auto Workers (UAW) celebrated the auto company’s decision as “transformative” for the city.
In reality, six years after the Chapter 9 bankruptcy of the City of Detroit, in which the city’s resources were looted to pay off its wealthy creditors, the ruling class the is once again pilfering the city treasury.
Democratic Party Detroit Mayor Mike Duggan at the FCA announcement on February 26 2019
The focus of the promotion of FCA’s investment plan has been the creation of 6,500 new auto jobs in the Detroit Metro area. Speaking at a press conference at the time next to Michigan Governor Gretchen Whitmer, Detroit Mayor Mike Duggan said, “This is the way the city of Detroit fights unemployment and poverty.” UAW Vice President for FCA Cindy Estrada also hailed the announcement, saying, “This is especially exciting given that these are good union jobs with union wages and benefits that have been collectively bargained for with the company.”
By “good union jobs,” Estrada—who has been implicated in the widening federal bribery investigation into the UAW—is referring to second-tier workers earning a starting wage of $17 per hour who will reportedly constitute the vast majority of new hires. This new low-paid, highly exploited workforce will nonetheless be a boondoggle for the union, which will pump as much as $5 million per year in union dues from the new hires while enforcing the dictates of management.
In reality, FCA is making a commitment to Detroit because it believes that it can find lower labor costs in the economically devastated former Motor City. Instead of selecting other candidate cities in Illinois and Mexico, FCA picked Detroit because it is confident that it will earn many multiples of its investment through the increased exploitation of the city’s working-class population.
FCA’s investment plan hinges on the package of incentives provided to the global automaker by Whitmer, Duggan and the Democrats on the Detroit City Council. According to a recent report in Crain  s Detroit Business, the combined tax and land deal cut will likely add up to approximately one tenth of the company’s $4.5 billion investment.
Detroit City Council meeting where resolutions to give property and tax incentives to Fiat Chrysler Automobiles were approved
Crains reports: “FCA’s tax incentives now total $384.5 million and could climb to as high as $422 million if the Michigan Department of Environment, Great Lakes, and Energy approves an additional $37.83 million in tax increment financing.”
The complicated details of the package were concealed from the public and rushed through the Michigan Strategic Fund (MSF) board and the Detroit City Council in May. The entire process took less than 90 days. The provisions of the deal include tax breaks, free land, real estate swaps with other property owners, loans for site preparation, payroll tax recapture and cash grants.
There is a bitter irony that, in the name of “revitalizing” Detroit, the Democrats are turning over significant public resources to one of the very auto companies responsible for the collapse of the city’s tax base over the last 50 years.
Up until the 1970s, when the US auto industry began its prolonged decline, Chrysler Corporation—the forerunner of FCA—had a significant number of automotive plants on the east side of Detroit. The tens of thousands of workers in these factories were among the most militant sections of the American working class.
When Chrysler entered its first bankruptcy and government bailout in 1979, the company targeted these plants for shutdown. They were aided by UAW President Douglas Fraser, who joined the Chrysler Board of Directors at the invitation of CEO Lee Iacocca.
Michigan Governor Gretchen Whitmer with UAW Vice President Cindy Estrada at the February 26 announcement by FCA of the Detroit investment plan
One after another, between the 1980s and the 2010s—Dodge Main (1980), Lynch Road Assembly (1980), Jefferson Assembly (1990), Mound Road Engine (2002), Detroit/Eldon Axle (2010) and Conner Avenue Assembly (2017)—factories were shut down and, in some cases, demolished in order to erase the memory of these facilities. Huge swaths of Detroit’s east side were left with industrial contamination and in ruins.
A large portion of the land being given to FCA is the site of the original Mack Avenue Plant, which Chrysler shut down in 1979, leaving the property a derelict and toxic wasteland. The Democrats in Detroit, Wayne County and Lansing have not only turned this real estate back over to FCA at no charge, but have also provided the financial resources needed to clean it up for the new Mack Avenue Assembly Plant now under construction.
The land deal involved a particularly sordid exchange involving the hiving off of city property to land speculators. In order for the city to grant FCA the contiguous parcels of land needed for the construction of the new Mack Avenue Assembly Plant, it had to purchase 214.6 acres from existing property owners at a cost of $50 million.
The city obtained the largest parcel, consisting of 82.2 acres located at the former Budd Wheel Plant at Conner and Mack Avenues, through a swap of 117 acres of city-owned property plus $43.5 million in cash with Crown Enterprises, the real estate company owned by Detroit billionaire Manuel “Matty” Moroun.
The city acquired an additional 8.5 acres of land, to be turned over to FCA for parking lots, through an exchange with Soave Fodale Group & Associates for 30 acres of residential property at Van Dyke Street and Lynch Road. Anthony Soave—a longstanding financial supporter of Mayor Duggan—allegedly purchased the land several months before the FCA deal was announced, flipping it back to the city for four to five times the value of the original purchase.
Conceptual illustration of the expansion of the FCA Jefferson North Assembly plant
In order to deflect public opposition and grease the palms of the UAW and various pro-Democratic Party groups, the deal establishes a $35 million Community Benefits Agreement (CBA). The CBA is overseen by a nine-member Neighborhood Advisory Council (NAC), which, in the case of the FCA deal, is made up of UAW officials and community activists tied with local Democrats.
Through the CBA, a fraction of the total value of the deal will be spent on workforce, education and youth development and community revitalization funding in the immediate vicinity of the new factory, while the rest of the neighborhoods in the east side are left in decay. Much like what global corporations have done in the “special economic zones” of Mexico and Southeast Asia, FCA and the Democrats are planning to paint a picture of an oasis of prosperity completely isolated from the general poverty and urban destruction that surrounds it.
This, however, assumes that the money actually reaches the projects for which they are earmarked. The CBA has no enforcement mechanisms, and FCA is not obligated to follow through on any of the promises that have been made.
Moreover, the “final benefit package,” unveiled at UAW hosted meetings run by FCA representatives, will be two-thirds funded by the city.
Democrats such as US Rep. Rashida Tlaib and City Council member Mary Sheffield promoted the smokescreen of the CBA process. However, in typical fashion, when details of the land deal and tax incentives were made public, they claimed they had been deceived and that real estate billionaires were stealing public land.
Workers in Detroit have a long and bitter experience with similar development schemes, all of which were falsely justified in the name of jobs and economic growth. In 1980, when GM demanded land to build its Detroit-Hamtramck Assembly Plant, the city government evicted residents of the Poletown community from their homes using eminent domain. That plant is currently scheduled by GM to close permanently in January 2020.
In the midst of the Detroit bankruptcy, when the city claimed that it had no money to pay the pensions of city employees, the Detroit CBO process was used to hand the Ilitch family empire $650 million—including a majority of the District Detroit real estate of 50 blocks of downtown property—to build its Little Caesars Arena for the Detroit Red Wings hockey and Detroit Pistons basketball teams.
In 2014, Ilitch Holdings presented city residents in the downtown Neighborhood Advisory Committee with an elaborate proposal that included “mixed use” development of restaurants, cafes, apartment buildings and retail shops to justify the city’s handout to the Little Caesars corporate empire. As of this time, not a single one of these “community benefits” proposals have even been started, much less completed.

“It would be great for workers from different countries to band together”

GM Detroit-Hamtramck workers determined to fight as auto contract deadline approaches


With the contract for workers at General Motors set to expire at 11:59 pm Saturday night autoworkers are determined to resist concessions and win gains after decades of cuts.
Workers were reinforced by the walkout Monday of 10,000 GM workers in Incheon and Changwon, South Korea who are rebelling against demands that they accept a continued pay and benefit freeze. GM closed its Gunsan assembly plant in May 2018, destroying 2,000 jobs directly and many more indirectly. The company has not allocated a new product to one of its plants in Incheon and has threatened to attack more jobs.
On Tuesday, reporters from the World Socialist Web Site Autoworker Newsletter visited the GM Detroit-Hamtramck Assembly Plant, one of the five plants in the US and Canada that GM has scheduled for closure. The shutdown date has been pushed back to January, after the 2019 contract negotiations. GM has made it clear that the plant closures will be used as a club to extract more concessions from workers.
A second tier two worker with four years at the plant told the Autoworker Newsletter he was very encouraged to learn about the strike by South Korean General Motors workers and supported their struggle.
Workers leaving their shift at GM’s Detroit-Hamtramck plant
“I wish we could all get together. They can’t fight us if we are all together.”
He said workers should reject the nationalist poison advanced by the unions that portrays foreign workers as the enemy. “They try to pit us against one another,” he remarked.
The young worker was not intimidated by management threats. Asked what he thought were the main issues in the upcoming contract he said, “tiers and health care.”
He continued, “A lot of us are risking our lives every day. Despite all the money GM is making they want to put a cap on everything, from profit sharing to pensions.”
He said he was angry that new workers were being denied the opportunity to earn pensions. “GM is the greediest of the Big Three. Everyone feels there will be a strike.
“Everything is quiet right now,” he added, noting the UAW had told them nothing about the progress of the negotiations.
“I am pissed.” He said workers would be reporting to the local UAW union hall later this week to get updates on preparations for a possible strike. “Tomorrow I will ask a bunch of questions.”
Another Detroit Hamtramck worker said, “I think it would be great for workers from different countries to band together. There are a lot of us, and only a few of them.”
“We’ve heard nothing,” said another worker, complaining about the news blackout by the UAW. “I think because there’s nothing good for them to tell us. They will try to force through a bad contract. I think it would be terrible if they go after our insurance. They’ve been trying to get at it for years. I need my insurance! I’m not getting any younger.”
A retired GM worker said he had heard that local UAW officials had been called to Detroit for a meeting on Sunday, September 15. “That usually happens when there is a tentative agreement,” he said. “These guys should not be allowed to negotiate,” he added, referring to the corrupt UAW bargaining teams who were bribed to sign pro-company contracts. “People need to take action. These guys are not going to change. Too much has gone on; it’s too late and too long. The retirees have not gotten a raise in over 10 years. It’s now or never.”
Like GM, Fiat Chrysler is using job cuts to try and blackmail workers into accepting a new round of concessions. Earlier this year, Fiat Chrysler eliminated the third shift at its Belvidere, Illinois Assembly plant. Many of those workers chose to transfer to other FCA plants in order to keep their jobs. The FCA Jeep complex in Toledo, Ohio has seen hundreds of Belvidere workers transfer recently. The transferred workers are being pitted against temporary part-time workers (TPTs) who are being told they must now wait indefinitely before being made full-time employees.
A young TPT worker at Jeep said that the UAW had told them nothing about the strike by South Korean GM workers. “I didn’t know they even had plants over there,” she said. “We don’t like it,” she added about the union’s efforts to keep workers in the dark and disoriented. “Workers here don’t trust the UAW.”
She said that TPT workers were being told they would not be made full time employees anytime soon. “They say it will be 2-3 years because of the layoffs at the Belvidere Assembly Plant.”
While autoworkers are determined to put an end to concessions, Wall Street is ramping up pressure on the auto companies to take even more cost savings off the backs of workers. Credit rating company Moody’s downgraded Ford’s credit rating to Ba1, ‘’junk” status, a move that could make it more costly for the company to borrow. Moody’s pointed to Ford’s ongoing restructuring program, saying company executives were not moving fast enough to produce results.
This is an undoubted signal to management that Wall Street expects Ford to extract significant new concessions from workers, including deep cuts to health care benefits and an expansion of lower-paid temps and contract workers.
The WSWS Autoworker Newsletter spoke to a second-tier worker from Ford Rawsonville just west of Detroit. After working three years as a temp, she has to work a second job to make ends meet.
In 2015, the UAW signed a letter of agreement with Ford that established a “new competitive wage structure” at Rawsonville, Sterling Axle and Woodhaven Stamping supposedly to “save” the plants from closing. The backroom deal established a new tier of even lower paid workers who max out at $10 an hour less than higher seniority workers.
“When I run into the union and ask them about the contract, they don't have an answer for me,” she said. “They don't want to talk about it. We have gone down in numbers here at my plant, down to around 400 people. Not a lot of people are left, many were transferred to Livonia. They got rid of the 2nd shift first, then they did away with the midnight shift. I was transferred to the day shift, and when I saw my first paycheck after losing my shift premium I was stunned. It was a lot of money."
"Everyone was talking about the South Korean GM strike in the break room. They were saying that they are ready to follow suit here.
"Everybody has another job. Ubering, grocery shopping—everybody's doing something."
A veteran worker at Ford Dearborn Assembly said, “They’ve been real hush-hush… nobody says anything. There was a rumor that we would give up our profit share for a signing bonus of $30,000, but for the four years you would not get profit shares. They didn’t know if that was in addition to a signing bonus, but they said they wanted us to give up our profit share for a large sum of money.
“I’ve been there for four years, and I’ll be honest, I hate the union because they don’t represent like they should. For example, if your pay is short, I waited from December to April to get my money. And they [UAW] don’t hold them accountable for messing up your check.
“You can’t pay anybody if you don’t know if your check is going to be right. Every week somebody faces the same thing and they are not doing anything about it.”
If there is going to be a real fight, autoworkers must take the conduct of the struggle out of the hands of the UAW and build rank-and-file factory committees to mobilize the full strength of autoworkers. These committees must formulate the demands workers need. This includes the abolition of the two-tier system, the conversion of all temporary and contract workers into full-time, a 40 percent wage increase, the restoration of benefits to retirees and a halt to all plant closings and the rehiring of laid off workers.
The central tasks of these committees will be to unify all GM, Ford and Fiat Chrysler workers, to reach out to all sections of workers and young people for support, and to link up the struggle of American workers with autoworkers in Canada, Mexico, Korea and throughout the world.

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