Friday, February 20, 2009

A global protection racket

Global car maker General Motors is demanding an additional $18 billion in addition to the $13.4 billion in loans already received from the US Treasury to keep it afloat whilst it slashes jobs and production. Its Chief Executive Officer Rick Wagoner says “We have to structure the business so we can be viable at dramatically lower volumes. The industry sales volume is running 40 percent lower than in 2007.”

They plan to shut 14 manufacturing plants around the world and throw 47,000 workers on to the streets, adding to 600,00o workers losing their jobs every month in the US. There, the number drawing unemployment aid has jumped to a record high of nearly 5 million as the slump deepens. Steven Wieting, an economist at Citigroup in New York, said the data was "consistent with a very quick sharp rise in the unemployment rate and that's going to continue for the next few months because production data are correcting very sharply."

GM is also issuing threats to the Swedish government, demanding that unless Sweden pumps money into the loss-making Saab which GM has owned for 20 years, it will abandon the company to its fate. Saab directly employs 4,100 workers in Sweden, with another 10,000 employed through sub-contractors, out of a total population of just 9 million. Unemployment in Sweden is also rising at an alarming pace. It jumped from 6.4pc to 7.3pc in January alone.
This is a new, doubly inverted type of protection racket. In the past the threat would be ‘pay us not to destroy your business ’. Now it is ‘pay us to destroy our business.’

Government advisers like to use phrases like ‘a managed contraction.’

They are trying to avoid the sudden shocks like the one delivered in the UK to BMW’s 850 contractors in Cowley, earlier this week, sacked with one hour’s notice, unleashing fury against the union leaders who’d known it was coming. The best they could offer to the angry workers was to say ‘it’s the times we’re living in’, and ‘the way it has been done is a disgrace after we’d negotiated three weeks notice.’ Thanks very much.

Derek Simpson and Tony Woodley, the joint leaders of Unite, Britain’s biggest union are on the side of the racketeers, warning that without “urgent assistance, UK manufacturing will not recover after the recession”.

They held what they termed “crisis talks” with Alistair Darling on Thursday to lobby the chancellor for a “strategic support package” for the car industry. Unite argued that billions of pounds more were needed, including state subsidies for jobs. The union said it called the meeting because of “fears that a plant closure in the car industry is imminent”, saying this would “have a devastating effect on UK manufacturing”.

As in the US, any state support will be used to finance ‘restructuring’, protecting profitability not saving jobs. Just like the trillions poured into the banks the sole motivation is to try and preserve something for when the mythical recovery starts.

The logic of the capitalist crash demands a destruction of productive capacity on a scale never before seen. No defensive programme or policy for jobs can withstand the devastation that must come before the economic basket-case hits bottom.

The only policy for jobs is for workers to a make a pre-emptive strike – occupying all factories, plant, refineries, offices and land to prevent their closure, before they are sent home, the gates locked and the sites cleared. These valuable resources must be secured against destruction and plans prepared for a new kind of economy – producing the things we need rather than profits for shareholders.

Gerry Gold
Economics Editor

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