By Shamus Cooke

November 23, 2008 "Information Clearinghouse" -- -As Socialists, we are consistently asked to present our ideas in a clearer, easier to understand manner. To achieve this goal, I’ll enlist the help of former Governor of Massachusetts and candidate for the Republican Presidential nomination, Mitt Romney, who appeared in the New York Times Op-Ed section on Nov. 19th.

Romney’s piece, entitled “Let Detroit Go Broke,” laid bare the intent behind the angry rhetoric used by politicians against the proposed bailout for the “Big Three” automakers. Whereas the giant Wall Street banks received over 1 trillion dollars – so far— without barely having to ask, an industry that actually produces something has to beg for a handout. Why the difference?

Romney doesn’t mix words, and makes it known that money can’t simply be thrown at the Big Three: they have to fix the problems that landed them in this mess. It soon becomes clear that the biggest problem needing fixing is the wages and benefits of the autoworkers.

“First, their [the automakers] huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.”

Conclusions such as these are inescapable within a market economy Marx gave similar examples long ago to explain how competition between capitalists inevitably forced an attack on the workers, since it is more difficult to cut the costs of raw materials and machines.

To accomplish the destruction of workers’ wages, Romney demands new management, too, and says that “the new management must work with labor leaders to see that the enmity between labor and management comes to an end”. This has always been a dream of the capitalist: eliminating the hostility of workers towards management, especially when management is hell-bent on destroying workers’ standard of living. Unfortunately for shareholders, class conflict is inherent in an economic system that is divided between workers and owners.

The bureaucracy which controls the autoworkers union (UAW) has done its best to dampen this intrinsic conflict. The UAW “leaders” have “cooperated” in drastically lowering workers’ wages and benefits, and as recently as last year, pushed through a devastating contract for workers.

But it wasn’t enough.

Romney—and the corporate establishment as a whole are demanding that the Big Three declare bankruptcy so that existing labor contracts can be torn up. Then the real “restructuring” will begin.

The lack of compassion that the ruling class shows for the families that would be affected by such polices shouldn’t come as a surprise. An economic system that produces goods for a market— instead of social need— will always produce similar outrages to the conscience.

As the economic crisis deepens, similar attacks on workers will develop. This is foreshadowed by Romney’s comment, “Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th.” In the same paragraph Romney implies that unions in general are to blame for the sad state of the economy. This is not merely the opinion of one man, but one social class. Again it should be stated: the current crisis is being used as a justification for an unprecedented assault on the living standards of workers, to begin with the auto industry.

A defeat for the autoworkers in this fight will set a devastating precedent for workers all over the country. It is the absolute duty of every working-class person to stand in solidarity with the autoworkers in their coming struggle. It is likewise in the interest of all who work for a wage to oppose the continuing bailout of the Big Banks at taxpayer expense. Taxing the Super Rich is the common sense solution to the problem you’ll never hear from a politician’s mouth.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org) He can be reached at shamuscook@yahoo.com http://www.informationclearinghouse.info/article21302htm

I wonder what the oil companies would say if they had to bail out the auto makers....afterall they are the ones to gain from this!!!!

just a thought!!!

Its way past time to take oil out of the equation.

Let Detroit Go Bankrupt
By MITT ROMNEY
Published: November 18, 2008
Boston

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

Mitt Romney, the former governor of Massachusetts, was a candidate for this year’s Republican presidential nomination.

The republicans are still pissed at the working class for not supporting the war based on lies and tossing Mccain Palin on their butts in a landslide election

I actually think they need to let the automakers go belly up!!!
after they file bankruptcy....contracts can be renegotiated at a more realistic price for the consumer.....
~~~there is over $6.000 in added costs in a new vehicle due to union demands.~~~
it really wouldnt be any different than when the airlines file....and they never stop flying!!

damn those unions for asking for a fair wage and health benefits. I say they should work for a bowl of rice

Let's not forget the selective bailouts going on now.

It's a secret process.

The administration is engaged in a selective process of saving some while letting others sink.

Time to punish the automakers. Do they deserve it? Perhaps

Now, I won't argue that the car makers have made some mistakes but I think surrendering our ability to domestically manufacture autos might be a bad decision.

I also think that it is easy enough to say "Let's let Detroit sink" when they see it just as Detroit. The facts are much different. It isn't just Detroit. Components,trucking, materials are just the top of the pyramid of jobs connected to the auto industry.

People who are ready to sink our ability to domestically manufacture auto's are I think short sighted and perhaps even endangering our domestic security. Sure, we have options now, foreign car makers are even manufacturing autos here in the US now. If American auto makers disappear will they still?

Look at all the other products we have seem bite us on the butt.

Can you buy an American made tv, jeans or dvd player? Nope, well we don't need those if we are squeezed by a foreign interest. Cars, trucks and other transport (gm car lines made war vehicles in a 24 hour switch over) are essential to our security. Let's give that ability up! Not to mention if we lose our ability to make our own autos foreign companies have zero interest in being competitive.

The big three are flawed for sure but there might be something in the saying" As GM goes, so goes the nation."

my dad has 3 cards.....I have mine!!
unions were useful, but not anymore!!!

The minute you take worker representation off the table completely the pendulum swings to far the other way.

Enjoy your upcoming weekend all. Without American labor unions you would have a weekend.

No weekends, no unemployment, no sick days etc etc, we would be like China working like slaves and paveing the roads with our crushed bones.

*COUGH*

there's nothing secretive or selective about the bailouts. yes, the banks are a capitalistic institution but they were the cornerstone of the economy. if they crashed, we'd be in a depression for a decade at the least. all business relies on those banks.

the big three have been laughing at the government for years and have been nothing but a drain on the economy. there's a slight difference.

labor unions had their purpose in establishing the 40 hour week and many other standards we have today. they've severely outlived their purpose now. they are nothing but corrupt institutions that should be abolished.

I am a member of the working class in a specialized trade. I am not part of any union and have excellent wages and health benefits because I've earned them through study and experience. unions are not required for a worker to receive a good paycheck and benefits.

The autoworkers deserve a fair wage. $27 an hour (starting) to snap panels into place is not fair. a retarded chimp with one arm could do that job. it's no harder than flipping burgers. it should be paid as such... maybe being generous in the $10 an hour range. welders, they deserve more. maybe around most other skilled, non-union, blue collar jobs in the $15-20 range starting with potential to rise into the $25-30 range.

making $55k a year starting (UAW contractual starting wage for an assembler based on 40 hour workweek, no overtime) is not a fair wage when the average household (as in all members, not just the one person) is below $50k. even more fun, UAW assemblers all get paid more for snappng things into place than I do to diagnose and fix the issues with the vehicle. I require a lot more knowledge/training, about $40k that I have invested in tools to perform my job, and I still get paid less even after you take out union dues).

do you really believe that the UAW deserves those kind of retirement benefits? ****ing save and invest like the rest of us have to. if the average UAW worker has their house paid off by the time they retire, they essentially get a payraise because they pay a lot more for that house than they lose in pay after retirement.

The big 3 need to burn. it's the only way the UAW will ever learn.

Not those Unions just the one UAW..foreign car makers building cars in the US seem to be making a profit ..and just why is that .. rice for workers .. i think not .. UAW plane and simple .. i would hang doors for 90k a year too and bennies to boot and great retirement..

you know not of what you speak..i have a good friend that owns a buisness in China. he tells a different story. well who should i believe one who has been there many times or ....unless you happen to travel China on a regular basis.. the progress China has made in rescent years has been great strides but still behind our standards..and they still need to make more. but the US had a learning curve too..

Heck with that.. The UNIONS killed the Auto Industry. Let them take the cuts.

Safe working conditions are one thing. (Like my grandfather fought for in the coal mines.) But look at what my other relations received before the mills went bust. 3 months vacation time, (He was there for a LOOONG time.) Sick time. HUGE benefits. WAY higher pay than what it was worth. Maybe THAT'S why we don't have jobs here anymore. Plus the fact that there is tooo much greed at the top.

So what happens. The millionaire big wigs stay millionaires and the union labourers stand in the cold looking for jobs.

As for working for a small wage and a bowl of rice? Education leads to BIG things. Maybe that's why when the mills close, plants close, mines close, what do a lot of workers do? The go to school and learn a new profession.

And exactly were will they work?

so the Auto Industry is just a life support mechanism for union workers?

Duh, of course not. How many engineers? advertiseing? personal managers etc etc the list is endless of who will be effected. take away two million workers paying taxes and add them to the welfare and food stamp list.

Oh, that's a little simplistic. I don't think there is an American (not an immagrant, just an American) that would work 7 days a week, with no overtime or sick days. Unemployement is government sponsored, so you know that "tax" isn't going away. And we'll whine if we don't get our vacation. Besides, if I really wanted a vacation, I'd quit, I was looking for a job when I got this one.

However, like any good organization, unions have started to hurt those they have started out help. Any organization will shift it's paradym to one that helps maintain the organization itself first, helps those that it is supposed to serve second. It usually only takes about ten years for this to happen, it's basic organizational sociology, look it up.