The Republican presidential candidates debated before a rich, white crowd in Greenville, South Carolina on Saturday. They fought with each other, nearly to the point of blows a la the anti-bellum US Congress, to establish who was the Most Anti-Government of All. The mirror of plutocrats in the room thrilled with each of the mounting attacks against regulation and taxes. Against Government.
The contenders for the crown the Most Anti-Government at All included the former governor of Florida, who fixed his state's 2000 presidential election for his brother; the governor of Ohio; two US senators, a New York City developer and TV celebrity; and a surgeon who took early retirement to promote the anti-regulation/tax position of the doctors in every country club in America, most of which would not permit him to become a member due to the color of his skin.
We wondered what America would look like if any of these bozos got their way. The specter of the deportation of 11 million illegal aliens was interesting. Curious what would happen to real estate values, at least in California. And would such an administration send our beloved, voluntary troops into harm's way to put down revolution on our southern flank? Recent history argues against it: drug cartels have taken over whole states in Mexico without much of a peep from inside the constantly expanding DC Beltway. Fatty Warbucks might get his culo handed to him on a plate of huevos rancheros the way it's served up to him in falafel balls in the Middle East.
Then, to answer our question, one of Badlands' top editors noted that the real disaster ongoing in Flint, Michigan, was mentioned once by any of the rivals for Plutocrats' Sweetheart of 2016 (including the Bully Billionaire Himself).
Well, let's see. Flint is more than half black. A growing proportion of its population in recent years is composed of permanently displaced United Auto Workers' union members.
This represents a historical nose dive for the city.General Motors incorporated in Flint and the UAW's sit-down strike in 1936 united different auto-worker locals into one organization strong enough to unionize the industry and bring middle-class income, job security and benefits to millions through the CIO and later the AFL-CIO. As Flint residents told Democracy Now! today: Flint is not a poor city but "you" have made it poor. Flint is, however, a terribly dependent city: dependent on General Motors, the UAW, and the state of Michigan; and "You" is involved in a fantastically complex game, including the Obama administration's salvation of GM, how the union ended up with the "largest block of shares" of the now fabulously profitable GM; UAW's infamous "two-tier" labor contracts.
GM closed an parts plant in Flint because the water from the Flint River, polluted for decades by auto plants, had become so corrosive it was ruining new auto parts.
Flint's water situation stinks of dirty politics, and not all Republican. The Republican/New Democrat practice of austerity programs to balance public budgets is exposed in Flint as naked class war against remnants of the unionized industrial workforce of America.
South Carolina today is home to non-union, European auto plants whose manufacturers appreciate America's lower wages. The banshee plutocrats howling during the Republican debate know the score against that state's working poor: simple, unequivocal, brutal class war.
A glaring equivalent of Flint here in the San Joaquin Valley is unincorporated East Porterville, in Tulare County, which appears to believe that groundwater is for agribusiness citrocrats, not workers and their families.
"Let them drink orange juice! Wash in it! Bath in it!"
As its hometown of Flint remains poisoned, GM makes record 2015 profit
General Motors announced yesterday that it made a record $11 billion in pre-tax profits in 2015. The Detroit-based auto giant, the third largest auto company in the world, made $6.3 billion in profits in the fourth quarter alone, beating Wall Street expectations.
Once again, GM made the bulk of its income from its North American manufacturing operations, where the corporation’s decades long cost cutting campaign, carried out with the full backing of the United Auto Workers, was accelerated during and after the 2009 restructuring of the company by the Obama administration.
GM had a North American profit margin of 10.3 percent, reaching its 10 percent goal a year early and surpassing the margins at its joint ventures in China. This was accomplished through the UAW-enforced exploitation of workers, which includes relentless speedup, forced overtime and poverty level wages to a new generation of workers who cannot afford the cars they build. On the same day it reported its profits, a skilled trades worker fell to his death at a GM plant in Defiance, Ohio.
The world economic crisis led to a lowering of profits for GM in China and substantial losses in South America and Europe. The car company has shut plants and eliminated the jobs of thousands of production and white-collar workers in Brazil and Germany, along with Russia, where it is ending manufacturing operations.
Record US car sales were spurred by pent up demand following the 2008 crash, falling fuel prices and low car loan rates. This pushed up GM’s revenue, particularly from highly profitable pickup trucks and SUVs. Big investors, however, anticipate that the boom in car sales will dry up in 2016 and lead to falling profit margins. This led to a sell-off of GM stock Wednesday, driving shares down 2.5 percent and 13 percent over the past year.
“We understand we are in a cyclical business, and it’s very difficult for anyone to predict a downturn,” CEO Mary Barra told investors in a conference call Wednesday, “but we will maximize earnings through the cycle.” She said the automaker expects to cut operating costs by $5.5 billion by 2018 and hand over $16 billion to shareholders in dividends and share buybacks over that period.
The government restructuring of GM in 2009 and the relentless UAW-backed attack on the jobs, wages, health benefits and pensions of autoworkers was designed to guarantee a steady flow of cash to big investors under virtually any market conditions. A large portion of workers’ income is based on “profit-sharing,” which can be sharply reduced in a downturn. The UAW has also given the company a free hand to slash jobs and close plants in response to “market conditions.”
Last fall, the UAW pushed through a new four-year contract on GM’s 49,600 hourly workers in the US, over mass opposition. The contract, like similar deals at Fiat Chrylser and Ford, maintains the two-tier wage and benefit system, expands the use of low-paid temporary workers, imposes first time co-payments on older workers for health benefits and holds overall labor cost increases below the rate of inflation.
While the company is paying out billions to its richest investors, residents in Flint, Michigan—the birthplace of GM—have been poisoned by lead, largely due to decades of toxins the automaker dumped into the Flint River. While state and local officials ignored resident complaints about the taste, color and odor of the tainted water, in December 2014 GM quietly stopped using the river-supplied water at its local engine plant because of corrosion to its parts. The company’s employee drinking fountains and ice machines, however, continued to use the poisoned water.
While Flint needs a massive marshaling of resources to address the irreparable damage done to children and other residents by the neurotoxins, the $80 million the Obama administration has committed to Flint amounts to less than three days of GM’s profits last year.
GM’s record profits follow similar announcements by Ford and Fiat Chrysler (FCA) last week. Ford made $7.4 billion in 2015, including $1.9 billion in the fourth quarter. FCA reported a profit of $410 million for 2015, a decrease from 2014 because of higher recall and investment costs.
During its earnings call, FCA CEO Sergio Marchionne told investors that the company would end production of its smaller and less profitable Dodge Dart and Chrysler 200 models and concentrate on larger vehicles. Marchionne said FCA might “partner” with other automakers to continue selling smaller cars. In the new labor agreements, the UAW sanctioned the shifting of small car production to lower wage plants in Mexico, while pledging to reopen local contracts and impose “competitive” agreements to continue small car production at US plants.
The enormous profit making at GM is an expression of the corporate-government-union conspiracy against the working class and the domination of the financial aristocracy over virtually every aspect of life in the US.
In 2009, the Obama administration essentially handed GM and Chrysler to Wall Street “turnaround” specialists. Last year, hedge fund manager Harry Wilson, a former member of Obama’s Auto Task Force, pressured the GM board to hand over $5.7 billion to shareholders, including $3.5 billion in stock buybacks and $2.2 billion worth of dividend payments. GM has now told investors it would expand a stock repurchase program from $5 billion to $9 billion through the end of 2017. The payout was hailed by the UAW, which owns the largest block of GM shares.
While these financial parasites are reaping vast fortunes, the company has left a trail of devastation behind it—not only for autoworkers and their families, but hundreds of car-buyers who were killed or injured due to defective ignition switches.
During the 2009 restructuring, the Obama administration essentially immunized the company and its richest stockholders from the consequences of the criminal decisions of its top executives. The Treasury Department broke up the company into two entities—an “old” GM, which was responsible for the bulk of the company’s liabilities stemming from lawsuits over defective parts and pollution caused by GM factories, and a “new” GM, which could funnel profits to big investors with as few deductions as possible.
Last year, the Obama administration hit GM with a wrist-slap fine of $900 million for the defective ignition switch scandal and no top executives involved in the cover-up have been prosecuted.
The mass struggles of autoworkers, including the Flint sit-down strikes in the 1930s that established the UAW, led to a significant increase in living standards for workers, and by 1960 Flint had one of the highest per capita incomes in America. The transformation of the “Vehicle City” into one of the poorest cities in the nation was the product of the betrayals by the UAW, which, starting in the late 1970s, suppressed any resistance by workers to plant closings, layoffs and wage cutting in the name of boosting the international “competitiveness” and profitability of the US automakers.
GM and UAW donate $3 million to Flint: Criminals covering their tracks
By Jerry White
In an action few could match for guile and hypocrisy, the United Auto Workers and General Motors earlier this week announced that they were jointly donating $3 million over five years to help children exposed to lead-poisoned water in Flint, Michigan.
The giant automaker, which long made Flint a center of production, posted a record $11 billion in pre-tax profits in 2015. The joint donation of $600,000 a year is equal to what GM made in profits every half hour last year. It is not known how much the UAW—which owns the largest block of GM stock, worth billions—is contributing.
In any case, this is an insulting amount for the city’s children, who will require lifelong health, educational and other social services to cope with irreparable damage from neurotoxins. The cost of replacing the city’s antiquated pipe system—long starved of resources due to tax abatements demanded by GM and the consequences of automaker’s deindustrialization of the city—is estimated at $1.5 billion alone.
Far from condemning GM, the UAW has run to its defense and portrayed its damage control effort and tax write-off donation as the height of corporate responsibility and humane behavior.
“We know that this crisis requires long-term commitment that focuses on those things that Flint families can do to mitigate their exposure to tainted water,” UAW Vice President Cindy Estrada said in a Tuesday news release. “Whether it is filters, medical care, educational resources or nutritional resources, this partnership can have a lasting impact.”
In fact, the UAW is collaborating with GM to divert attention from the corporation’s complicity in the poisoning of the city and its cover-up. The donation came only a few days after long-time consumer advocate Ralph Nader wrote a letter to GM CEO Mary Barra asking why company officials did not alert the public about high levels of lead in the water after discovering that parts at its local engine plant were being badly corroded by the city’s water.
“The concerned people of Flint, of Michigan, of the United States, should be informed in detail of the degree or lack thereof of GM’s corporate and community responsiveness to sound the alarm and disclose the test results at the time they were produced,” Nader wrote, saying, “there is no way GM did not have information about lead and other heavy metals in the water from its own comprehensive testing.”
In October 2014, GM quietly switched its water supply from the Flint River—which it had long used as a dumping ground for pollutants—to an untainted water supply from a neighboring township. It would take another 11 months—during which time state and local officials ignored resident complaints and scientific evidence—before the governor would provide funds for the city to reconnect to the Detroit water system, its original water source.
The partnership of the UAW and GM has already had lasting and devastating consequences for the people of Flint. Outside of the state and local authorities who switched the city’s water supply and then covered up their actions, there are few if any entities so deeply implicated in the social catastrophe in the city.
After reaping incalculable profits in the Vehicle City over eight decades, GM largely abandoned Flint by the 1990s, leaving behind little except abandoned factories, ruined neighborhoods and land and waterways saturated with toxic waste.
As for the UAW, born in Flint during the sit-down strikes led by left-wing militants during the Great Depression, the ruins of the city are symbolic of its repudiation of these class struggle traditions and adoption of the corporatist program of labor-management “partnership” to boost the profits and competiveness of the Detroit automakers against their international rivals.
As a result of the mass struggles that built the UAW, by the 1960s workers in the city had achieved one of the highest per capita incomes in America. After decades in which the UAW colluded in the shutdown of the city’s factories—including the 1999 closure of Buick City, which once employed 28,000 workers alone—today over 40 percent of the city’s population is living in poverty, according to the US Census Bureau. That makes Flint the second most poverty-stricken city in the nation for its size, just behind the depressed former steel town of Youngstown, Ohio.
A 2014 article in Belt magazine, which focuses on reclamation efforts in America’s so-called rust belt cities, provides a devastating picture of the deindustrialized city of 100,000 residents.
“Over the last 35 years, auto employment in Flint has dropped from 80,000 to 5,500. That’s why Chevy in the Hole [the site of the 1936-37 UAW sit-down strike] has shifted from producing engines to growing wildflowers. Like so much of Flint, which has lost half its peak population of 196,000, the former plant exists in a state of half-wildness that looks neither natural nor deliberate. Nearly half the city’s commercial properties are vacant. Factories abandoned by General Motors make up over 10 percent of the city’s land area. The largest former GM property, the 400-acre Buick City, appears on maps as a gray void in the heart of the city.
“General Motors was here for 80 years, and left behind toxins that will take centuries to dissolve: arsenic, chromium, mercury, lead, solvents. Petroleum leaks into the Flint River, said Christina Kelly of the Genesee County Land Bank, which has been overseeing the remediation and participating in the site planning.”
According to Mike Bennett, the retired president of UAW Local 326, workers at GM’s Ternstedt plant in Flint were dying of cancer at up to three times the national average. A December 2008 USA Today article notes that children at Flint’s Carman Park Elementary School are subjected to some of the worst levels of air pollutants in the country.
Several weeks ago, UAW Vice President Estrada cited the water crisis in Flint in her introductory remarks for President Obama during his January 20 visit to the UAW-GM Human Resources Center in Detroit. She attacked Michigan’s Governor Rick Snyder, saying that he and other Republicans were not “motivated” by their moral responsibilities like Obama was when he supported the 2009 bailout of the auto industry. “Unfortunately, we haven’t seen that kind of thinking in Flint, Michigan, where it seems that the state of Michigan and its appointed, not democratically elected emergency manager, focused more on the bottom line than it did on the community safety and of our children,” Estrada said.
In fact, Obama’s restructuring of GM and Chrysler not only slashed by half the wages of new autoworkers, but also immunized the automakers from lawsuits stemming from pollution and largely relieved them of the cost of environmental cleanup in Flint and other cities. The UAW, like President Obama and the Democrats, is no less committed to defending the bottom line of GM than its top executives and corporate board members—which include representatives of the UAW.
In 1845, Frederick Engels, the collaborator of Karl Marx, wrote scathingly about the charity the English ruling class doled out while brutally exploiting the working class and condemning families to cramped, fetid slums of mill towns like Manchester.
“What? The wealthy English fail to remember the poor? They who have founded philanthropic institutions, such as no other country can boast of! ... As though you rendered the proletarians a service in first sucking out their very life-blood and then practicing your self-complacent, Pharisaic philanthropy upon them, placing yourselves before the world as mighty benefactors of humanity when you give back to the plundered victims the hundredth part of what belongs to them!
“The English bourgeoisie is charitable out of self-interest; it gives nothing outright, but regards its gifts as a business matter, makes a bargain with the poor, saying: ‘If I spend this much upon benevolent institutions, I thereby purchase the right not to be troubled any further, and you are bound thereby to stay in your dusky holes and not to irritate my tender nerves by exposing your misery. You shall despair as before, but you shall despair unseen, this I require, this I purchase with my subscription of twenty pounds to the infirmary!”
The American ruling class, along with its servants in the trade union apparatus, is no less hypocritical than its English predecessors. The workers in Flint are not bowing and thanking these criminals. Instead they are fighting. To guarantee such elemental rights as clean water, the working class must unify all of its battles into a single political struggle to put an end to capitalism.