Which Will It Be in America's Auto Crisis: Conversion or Wipeout?
by Richard Freeman
Nov. 25 (EIRNS)Speaking at the National Press Club in Washington, D.C. Nov. 22, Ford Motor Co. chairman and CEO Bill Ford urged the U.S. Congress to provide tax credits for the conversion of auto factories, and the retraining of the auto workforce. He urged "a collaboration between government and business."
Ford's proposal would head the auto sector in a different direction than that offered by General Motors CEO Rick Wagoner, who announced Nov. 21 that he would close all or part of 12 GM production facilities in the U.S. and Canada, and fire 30,000 production workersslashing GM's production workforce by 30%. A week earlier, the CEO of GM spinoff Delphi (the nation's largest auto-parts maker), Wall Street thug Steve Miller, had declared that he would lay off 24,000 of Delphi's 34,750 production workers in the U.S. and Canada71% of the workforce.
There could not be a starker contrast in approaches to the crisis in American auto.
On Nov. 23, economist and statesman Lyndon LaRouche wrote a letter on the matter of reorganizing the U.S. auto industry to Bill Ford (see letter, p. 1), in which LaRouche expressed agreement with Ford's statement, and indicated emergency measures for the auto sector.
He emphasized the need to develop the scientifically advanced machine-tool-design capability embedded in the auto industry, which is capable of producing almost anything needed to reconstruct the U.S. economy. LaRouche proposed an Act of Congress to create the authority for such a reorganization of the auto industry.
On Nov. 24, LaRouche issued a policy memorandum that focussed the reorganization of the auto sector from the advanced standpoint of launching a world economic revival and an emergency reform of the international monetary system (see p. 1). The Nov. 17 rally and day of lobbying carried out Capitol Hill by the LaRouche Youth Movement and United Auto Workers leaders, many of them from Delphi plants, represents the political force coalescing around LaRouche's approach.
- Manufacturing Innovation -
In his Nov. 22 speech, Ford remarked that "Innovation is always what's made American manufacturing the envy of the world.... Innovation is what made Ford a leaderfrom the Model T, to the assembly line, the $5-a-day wage, flathead V8, ... and passenger-side airbags." And he underscored the World War II auto-industry conversion process: "[Innovation] is also what helped us play a role in Detroit's Arsenal of Democracy. As you may know, Ford applied its manufacturing prowess to the construction of the B-24 Liberator Bomber at our Willow Run facility."
Ford stressed a "new dynamic to American innovation: the collaboration between government and industry," as opposed to industry going it alone, and favorably cited Japan's "subsidies to their domestic auto suppliers."
He pointed out the fallacy of the so-called post-industrial society: "There are some who shrug their shoulders at all this. They say American manufacturing is yesterday's news and that we should rely squarely on the service sector. They say it's okay to be a consumer society and to leave the production to other parts of the world[,]... that the only thing that matters is that we get our goods as cheaply as possible that we shouldn't worry about the collateral damage.
"Well, I'm not convinced.
"I believe that with the right investments, America and the American manufacturing sector can win. It can maintain its leadership stature in the world. "
Ford also outlined "six cooperative measures between industry and government" the U.S. should take, including two measures which propose a framework for retooling the auto industry:
* "Challenging Congress to consider tax incentives to help American manufacturers convert existingbut outmodedplants into high-tech facilities.
* "Calling for investment in the American workers who build the advanced technology products with training programs and incentives to upgrade workers' skills, helping us move into the future while preserving American jobs."
- GM's Takedown -
Meanwhile, driven by the rapacity of the City of London-Wall Street financiers (Goldman Sachs analyst Robert Barry has called for further GM "restructuring" and for the UAW to agree to "more aggressive" concessions), GM's Rick Wagoner took the course of killing off his company. Of his program of shutdown and layoff, he claimed, "These actions are necessary for GM to get its costs in line with our major global competitors." He also claimed this will "save" GM $7 billion per year in costs.
The shutdown will hammer production centers upon which cities and communities across the nation depend:
* Oklahoma City, Okla. assembly plant; 2,534 production workers.
* Spring Hill, Tenn. plant/line #1 assembly plant; 5,067 production workers.
* Doraville, Ga. assembly plant; 2,856 production workers.
* Lansing, Mich. Craft Center; 350 production workers.
* Lansing, Mich. Metal Center; 1,514 production workers.
* Moraine, Ohio assembly plant; third shift; 1,274 production workers.
* Pittsburgh, Pa. Metal Center; 541 production workers.
* Oshawa, Ontario, Canada assembly plant #2; 2,300 production workers.
* Oshawa, Ontario, Canada assembly plant #1; the third shift will be eliminated; 1,000 production workers.
Parts distribution centers will be closed in Portland, Ore.; St. Louis, Mo., and Ypsilanti, Mich.
As the crisis intensifies, Wagoner will likely move up the closing date of these plants, and shut down more plants.
Once the shutdowns are final, GM will produce 4.2 million vehicles in North America; in 2000, it produced 6.2 million vehicles, so one-third of this invaluable production capacity will have been closed in five years.
At the start of 2005, GM employed 114,000 production workers in the United States. GM shut five production facilities earlier this year; with that, and with attrition, the number of production workers was reduced to 106,000. Of the 30,000 production workers Wagoner announced he will fire, 26,400 are in the U.S., the rest in Canada. When this phase of shutdown is completed, GM will employ just 79,600 U.S. production workers, a drop of 30% from the start of 2005. (In 1978, GM employed 520,000 production workers in the United States.)
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