NetNews Usenet Archive 1992 #26/NN_1992_26.iso/spool/misc/activism/progress/8256

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Via The NY Transfer News Service * All the News that Doesn't Fit

BEHIND THE CRISIS AT GENERAL MOTORS

By David Sole

Detroit

On Nov. 2, General Motors officially announced John G. Smale as
its new chairperson, replacing Robert C. Stempel. The expected
announcement reflects the tremendous financial crisis afflicting
one of the largest corporations in the world.

GM's share of the market has fallen from 45 percent in 1980 to a
current low of 35 percent. GM responded at first with demands for
contract concessions. Then in 1986 the corporation announced 21
plant closings and the layoff of 80,000 workers.

But the continuing world capitalist recession has contributed to
two straight years of multi-billion dollar losses for the world's
largest auto producer; last year's losses totaled $4.5 billion,
the most ever by a U.S. company. In December 1991 Stempel
announced plans for a further 21 plant closings with 74,000 more
workers to be laid off over the next several years.

Pages of newsprint have been devoted to GM's record losses,
erosion of market share and "slowness to respond to competitive
pressures." But what has been hidden and only hinted at is what
this will mean for GM's workers and their union, the United Auto
Workers.

When Stempel resigned his million dollar a year job as chairman
of GM on Oct. 26, the papers made no secret that he quit to avoid
being fired by his own board of directors. It should be noted
that the directors who organized this "palace coup" were the
outside directors from other companies who sit on the board.
Traditionally these executives play no part in running the
company, but merely rubber stamp decisions of the inside
directors.

Not anymore. While media reports focused on former Proctor &
Gamble chairman Smale and new CEO Jack Smith as the leaders of
the group that drove Stempel out, important roles were also
played by two other directors--Charles T. Fisher 3rd, chairman of
NBD Bancorp, and Dennis Weatherstone, chairman of the powerful
J.P. Morgan & Co. banking institution.

These bankers and their corporate allies dumped Stempel because
he was "ill suited to break the culture that had for years worked
against the company." (New York Times, Oct. 27)

GOING AFTER THE UAW

This "culture" was that of collective bargaining with the Auto
Workers union. The Washington Post was more blunt earlier when it
predicted Stempel might be dismissed if he did not toughen his
stand against the UAW.

Stempel, of course, was no friend of labor during his 27 months
as chairman or prior to that as GM president under Roger Smith.
But he was part of the GM team that agreed to pay $3.35 billion
in special benefits to guarantee wages to all workers with more
than one year seniority in the face of layoffs and plant closings
under the 1990 UAW-GM contract.

Stempel also retreated from eliminating 240 jobs at a Lordstown,
Ohio, plant after the UAW responded with a local strike that shut
down 14 plants this past summer. A Lansing, Mich., local GM
strike also ended after GM backed down from its arbitrary
demands. This was not to the liking of those who are looking to
break the unions around the country.

Another open secret is that GM has looted the workers' pension
fund to the tune of $12 billion since 1989 to pay for operating
expenses. By the end of this year the GM pension fund "will be
about 25 percent underfunded." (New York Times, Oct. 26)

With negotiations for the national GM-UAW contract coming up next
summer the ruling class appears to be preparing for a direct
confrontation with the powerful union. The New York Times on Oct.
27 even proposes that GM may want to "renegotiate" the current
contract.

Using the threat of bankruptcy GM could try to force UAW members
to swallow large scale wage and benefit cuts as well as pension
reductions. It was Chrysler Corp. in 1979 that introduced the
term "concessions" into the UAW language during its bankruptcy
and subsequent government bail out.

Until now the auto companies and their banking investors have
been willing to chip away at traditional wage rates and benefits.
Now it seems a decision has been made to take on the UAW,
weakened by the loss of hundreds of thousands of members in the
past 10 years.

The UAW may be next in line for the treatment meted out to the
Continental and Eastern Airline workers, the Greyhound workers
and the Detroit city workers who are facing a 10 percent pay cut
demand from these same banks. The recent collapse of the UAW
strike against Caterpillar also emboldened the bosses to take on
the UAW.

It will be up to the autoworkers and the entire labor
movement--in alliance with the community--to stand up to and
defeat these outrageous anti-worker attacks.

                          -30-

(Copyright Workers World Service: Permission to reprint granted
if source is cited. For more info contact Workers World, 46 W. 21
St., New York, NY 10010; "workers" on PeaceNet; on Internet:
"[e-mail]".)


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