US: GM Goes Bankrupt — Defend Jobs!

Retool GM to Produce Mass Transit Vehicles!

After months of dire warnings and threats, it has finally happened: General Motors has filed for bankruptcy. Once the largest corporation in the US, the symbol of the post-World War II boom and the American Dream, GM has been shattered after years of struggling with profitability.

This comes five weeks after Chrysler was also forced into bankruptcy, and just days after GM workers approved new concessions in their contract.

These concessions include: cutting 20,000 production jobs, closing 14 factories, cutting break times, eliminating bonuses, eliminating the cost-of-living adjustment, multi-year pay freezes, and expanding the companies’ ability to hire second-class workers at less than full-wages.

More ominously, Chrysler and GM workers are not able to vote on any contract changes until the government loans are paid back in 2015. And if they go on strike, their company automatically defaults on the loans.

Now that the companies have gone into Chapter 11 bankruptcy, these concessions will be used as a baseline for more attacks on GM and Chrysler workers alike. Rather than putting a floor under declining wages and working conditions, they will become a “new ceiling,” in the words of Jane Slaughter (Labor Notes, June 2009).

Also to blame is the leadership of the United Autoworkers Union (UAW). By failing to stand up and fight the concessions demanded by auto companies over the last 40 years, and failing to actively campaign to spread the gains won by autoworkers to the wider working class, the UAW leadership let the fighting traditions of the union dissipate. The failure of UAW leadership to fight these new drastic concessions means that a new fightback will need to be organized by the UAW members themselves.

Socialist Alternative has argued throughout the current crisis that in order to save their jobs and living standards, autoworkers should be demanding their factories stay open and retooled to produce green technology (see “Auto Bailout Makes Workers Pay: But Will It Save the Industry?” and “Crisis in the Auto Industry: Nationalize and Re-Tool to Save Jobs”). Now, a number of left commentators are also calling for the retooling of GM’s factories to save jobs, including Michael Moore and Ralph Nader.

In a June 1 posting on his website (, Moore even points to the example of the rapid transition of GM factories to produce war goods during World War II, a process that took place in a matter of months. He argues “Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war [against climate change] and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices.”

This is a useful comparison, which shows that such a fundamental transformation of the industry is not only technically feasible, but can happen in a short period of time. We should highlight this fact whenever anyone says it is “impossible” to retool the industry.

But we must keep in mind that Roosevelt’s mobilization for WWII was undertaken in order to further the interests of US big business who felt threatened by Germany and Japan. With the auto industry today, the most profitable way to reorganize the system is to simply downsize productive capacity and cut workers’ living standards. This is what big business is demanding, regardless of the devastating effect it will have on workers and their communities, or how wasteful and unnecessary it is.

Obama is caught in a contradiction between his pro-corporate policies and the need to appear friendly to workers, partly because the United Auto Workers mobilized thousands of volunteers and millions of dollars to get him elected. This helps to explain why President Obama forced GM into bankruptcy, which was unnecessary given the government investment equal to nearly $45 billion.

If the job cuts and factory closures were being pushed directly by Obama’s Auto Task Force, it’s more likely workers would be demanding democratic accountability for what happens to GM and Chrysler. This point was made in a recent interview by Ralph Nader: “The bankruptcy court is a mechanism for the Obama administration to escape responsibility for $70 billion or so of investment in those two companies and say, ’Oh, the court made us do it’ (Democracy Now!, June 2, 2009).

It is outrageous that the government is investing billions into GM, taking a majority share, in order to cut over 20,000 more jobs and close 14 factories. We should be using these workers and factories to produce the things we need, not to put more workers out of a job!

Autoworkers have worked in horrific conditions, often 12-hour shifts doing mind-numbing repetitive work, to help build up the productive strength of this county. They have put their time in and deserve decent living standards now and in their later years. The government has spent trillions of dollars propping up the banks and rich investors who got us into this current mess. It’s a scandal that the Obama administration is now using the bankruptcy process to destroy tens of thousands more jobs and to further devastate communities like Detroit which is already passing through its own depression.

We need to keep these factories open. We need to retool them and use the skills of these workers to rebuild the economy, not to further impoverish the country by adding to the unemployed and creating a new wave of foreclosures. We need to use this opportunity to create the transportation industry of the 21st century. But this can clearly not be done under the short-term logic of capitalism.

President Obama says he does not want the government to get into the business of making cars. Instead, he wants to put GM back into the hands of private investors within 18 months. This makes no sense. Private investors are not interested in the long -term needs of workers, our communities or the environment; instead they are driven by the goal of maximizing their short-term profit.

It’s essential for autoworkers to fight against these attacks and demand complete public ownership of the U.S. auto industry. But this should not be run in the interest of big business, but instead in the interests of the wider working class and the public. It should be run under the democratic control of elected workplace committees, union representatives, and representatives from wider society. It will require a militant struggle from the shop floor up, against the resistance of the auto companies. This is the only way that we can effectively retool the industry and save our jobs.

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June 2009