GM to cut 25,000 jobs, shut more plants

[Moooooo]

From the Baltimore Sun:

WILMINGTON, Del. -- General Motors Corp. plans to eliminate 25,000 manufacturing jobs in the United States by 2008 and close plants as part of a strategy to revive North American business at the world's largest automaker, its chairman said today.

Speaking to shareholders at GM's 97th annual shareholder meeting in Delaware, Chairman and Chief Executive Rick Wagoner said the capacity and job cuts should generate annual savings of roughly $2.5 billion. GM now employs 111,000 hourly workers in the United States

[WalterMitty]

unions are good for the economy?  right?

[A18]

unions are good for the economy?  right?

[TheresNoMoney]

unions are good for the economy?  right?

Unions are good for working people, yes. But Republicans hate working people, so they're anti-union.

The biggest factor in GM's decreasing profitability is health insurance costs, you dimwit, not unions.

[WalterMitty]

unions are good for the economy?  right?

Unions are good for working people, yes. But Republicans hate working people, so they're anti-union.

The biggest factor in GM's decreasing profitability is health insurance costs, you dimwit, not unions.

oh yeah.  that's it/

it couldnt be that union labor is horribly inefficient and uncompetitive.  the unions over-inflating wages and pensions probably had nothing to do with these closings either.

keep your head buried in the sand.

[A18]

Lol. That can of argument would lead us to nationalize everything, and by providing lower quality, provide goods and services for cheaper.

[TeePee4Prez]

unions are good for the economy?  right?

Unions are good for working people, yes. But Republicans hate working people, so they're anti-union.

The biggest factor in GM's decreasing profitability is health insurance costs, you dimwit, not unions.

oh yeah.  that's it/

it couldnt be that union labor is horribly inefficient and uncompetitive.  the unions over-inflating wages and pensions probably had nothing to do with these closings either.

keep your head buried in the sand.

I know we agree on social issues but I dislike Henry Cabot Lodge and I am strongly pro-union.  Scoonie is right, this is due to health insurance costs plus Japanese auto makers competing right here in the US.  Mind you I don't mind Toyota and whatnot having plants here because of the good jobs it creates.  I agree unions have gone too far in some cases, but over the past 100 years the prosperity they create far outweighs any downfalls they may have.

[TheresNoMoney]

keep your head buried in the sand.

Go back over the past few months and read the many articles about health insurance costs killing GM's profitability, you blind partisan hack.

I don't know why Republicans are so scared to accept the fact that health insurance costs are the #1 factor killing American corporations and small businesses. Health insurance reform should be our #1 domestic priority (it will be when/if the Democrats regain control of the Congress again).

[A18]

So we're supposed to lower the cost of health care... you know, by making it suck? We can do this with anything, you know. You're essentially saying the employees expect too much. This is for the market to determine.

[TheresNoMoney]

So we're supposed to lower the cost of health care... you know, by making it suck?

Hey jackass, who said anything about making it suck?

[TeePee4Prez]

So we're supposed to lower the cost of health care... you know, by making it suck?

Hey jackass, who said anything about making it suck?

He is a spolied rich kid that knows nothing.. Ignore him!

[A18]

So we're supposed to lower the cost of health care... you know, by making it suck?

Hey jackass, who said anything about making it suck?

Hey five year old, that's exactly what happens everywhere socialized health care is tried.

Gee, the cost of paper is up... let's nationalize it.

[Filuwaúrdjan]

GM always were a bunch of bastards

[TheresNoMoney]

that's exactly what happens everywhere socialized health care is tried.

Who said anything about socialized health care?

No go run along and suck on your mommy's tits like a good little home-schooled boy.

[David S]

unions are good for the economy?  right?

Unions are good for working people, yes. But Republicans hate working people, so they're anti-union.

The biggest factor in GM's decreasing profitability is health insurance costs, you dimwit, not unions.

oh yeah.  that's it/

it couldnt be that union labor is horribly inefficient and uncompetitive.  the unions over-inflating wages and pensions probably had nothing to do with these closings either.

keep your head buried in the sand.

I know we agree on social issues but I dislike Henry Cabot Lodge and I am strongly pro-union.  Scoonie is right, this is due to health insurance costs plus Japanese auto makers competing right here in the US.  Mind you I don't mind Toyota and whatnot having plants here because of the good jobs it creates.  I agree unions have gone too far in some cases, but over the past 100 years the prosperity they create far outweighs any downfalls they may have.

I'm not anti-union and I would agree that overall unions have improved life for the average person. However the unions have to realize that the fate of the employees is absolutely tied to GMs fate. If GM is unable to operate profitably it will go belly-up and all those jobs will go with it. All the pensions and healthcare benefits will go too. The unions must be willing to compromise on wages, pensions, and healthcare if they want to survive. Half of something is better than all of nothing.

[Richard]

While I feel sorry for those that lost their jobs, this is good news.  I really do hope GM goes belly up.

[TheresNoMoney]

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=8722312

"This may not be the last major job cut announcement we see this year as other companies, including other American automakers, struggle to make a profit amid escalating health-care costs, not to mention the cost of providing ongoing health benefits to growing ranks of retirees," Challenger said in a statement.

GM expects to spend $5.6 billion on employee and retiree health care this year, and cited that burden when it recently withdrew its earnings guidance for 2005..........

Wagoner said, "Our $1,500 per (vehicle) health-care expense represents a significant disadvantage versus our foreign-based competitors. Left unaddressed, this will make a big difference in our ability to compete in investment, technology, and other key contributors to our future success."

[Bono]

that's exactly what happens everywhere socialized health care is tried.

Who said anything about socialized health care?

No go run along and suck on your mommy's tits like a good little home-schooled boy.

What a troll.

[A18]

that's exactly what happens everywhere socialized health care is tried.

Who said anything about socialized health care?

Single payer, Canadian health care is socialized.

You must be logged in to read this quote.

Not all of us want extended waiting periods and rationing.

[TheresNoMoney]

http://money.cnn.com/2005/06/07/news/fortune500/gm_closings/index.htm?cnn=yes

Much of this is also due to bad strategic planning by GM itself on the SUV craze:

"GM's sales have tumbled 7 percent for the first five months of the year, and the company has also been hurt by what Wagoner has called "fewer high profit SUVs, more lower profit cars."

Its share of the U.S. market has fallen to 25.7 percent from 27.2 for the same period a year ago."

[TheresNoMoney]

Single payer, Canadian health care is socialized.

Where in this thread did I mention single-payer health care?

I DIDN'T, YOU DUMBASS!

[Beet]

The union structure works in some cases and not in others. The fact that unionization pinches a corporation's profits makes no difference if all corporations are unionized.

Today, unions face two main problems

1. Labor market flexibility and heterogeneity has made it less practical to unionize.

This is just something I've been told. I can see some superficial practical difficulties here, but nothing that systemically prevents white collar unionization from labor market flexibility and heterogeneity in and of itself.

2. The poor lack political power.

Before being able to unionize, the poor have had to gain political power. At least this was the case in the U.S.-- union membership did not take off until the NLRA. Ultimately, what unionization is, is a form of redistribution from the owners to the lower class workers. It is one of many forms.

SUPPLY AND DEMAND OF LABOR

The supply of labor, unfortunately for the poor, has always been greater than the size of consumer markets. We still live in a world of expansionist capitalism. Trying not to sound like a Marxist, at some point capitalism will no longer be able to find new "markets" and be forced to end that aspect of its expansion. But we are not there yet.

The labor market is always that which is opened first, because one must work before one can buy. The labor market was opened in England first and foremost through foreclosure which led to urbanization. The early opening of the labor market to capitalists means that there is an abundant supply of labor, and labor's bargaining position and political power is very weak. Even if it wanted to redistribute wealth towards itself, there would not be that much to redistribute; not enough has been made.

As time progresses, more and more capital is accumulated, and the rewards of redistribution to the poor become greater and greater while the rewards of further accumulation to the wealthy become less. This is true from the law of diminishing returns and also from the fact that the wealthy need larger and larger consumer markets for their goods. Naturally, the wealthy truly does "trickle down" to some extent, although not in the way Reagan imagined it; it often takes a political transformation for this to fully materialize; if "trickle down" means that the poor naturally get richer after the wealthy do, then political progressivism is a form of "trickle down".

The one caveat is technological. Technology's initial impact on the labor market more than counteracts capital accumulation by setting off a Malthusian process among the population. The middle of the industrial revolution coincides with a skyrocketing life expectancy and plummetting infant and child mortality rates. This means that the population explodes even as fertility rates begin to decline. Once fertility rates have fallen to replacement level, population growth necessarily moderates; but before this a population explosion has already occured.

This population explosion serves to more than counteract the accumulation of capital, and thus labor markets return to their original stage of industrial equilibirum: a large supply and comparatively small consumer markets. The final stage is the most devastating for the capitalist: the fertility rate has fallen to or below the replacement level, and capital accumulation continues apace steadily. This ultimately leads once again to the labor market tightening up, and it is at this stage that the working poor gain their greatest bargaining leverage, both from a political and practical standpoint.

The key here though is that, for sociological reasons, this process is obviously not uniform. It began in England, then spread outward from there from one place to another, like a shock wave. Furthermore, technological spread and capital accumulation have not spread geographically at the same rate.

(1) The "developed" regions of the world have gone through the full population cycle as well as a great deal of capital accumulation.

(2) The "developing" regions of the world are going through the population cycle and the capital accumulation process, but are at a much lower point in the latter process than the developed regions.

(3) The "underdeveloped" regions of the world are going through the population process but have not yet begun capital accumulation.

Let us now consider only the closed system of the developed and underdeveloped worlds, (1) and (3). Considering India for now as "underdeveloped" which is not an unfair classification I think, the underdeveloped world has a somewhat --not spectacularly-- but substantially larger population than the developed region. It is difficult to gauge the total capital-labor balance in this countries, but generally speaking, suppose that there is a relative balance between the supply and demand of labor within this closed system.

Now factor in the developing countries (China, Latin America, Southeast Asia, Russia), which are at an immature stage of capital accumulation but a mature stage of the population cycle. This means they have large populations compared to pre-industrial ones, but comparatively low levels of capital accumulation. If the closed system comparing (1) and (3) was balanced, considering the entire world almost certainly places labor at a disadvantage.

In other words, the current large ratio of poor to the availability of capital means that (a) insufficiently sized markets exist to accomodate the labor supply, and (b) insufficient capital exists to encompass the labor supply's needs or demands for redistribution.

These factors are working against the laboring poor. An equally significant factor, however, is the inability of the poor to organize.

THE INABILITY OF THE POOR TO ORGANIZE

Notice that I have been for the most part considering the entire world in my system. This is certainly the most rational consideration since the concepts unionization, labor, and capital, apply to the entire world, and no more, in the physical sense-- but contrary to what might seem common sensical, it is not intuitive to us. We are used to thinking in terms of national markets.

Thinking in terms of national, regional, "civilizational" or other localized units is a sociological phenomenon, but it tells us a great deal about the geographical spread of the population and capital accumulation cycles. It also tells us why labor movements in the 19th and early 20th century were successful despite the fact that the world has always had a surplus of labor compared to capital since the beginning of industrialization: both capitalists and laborers thought in terms of localized closed units, imposing an artificial barrier on the market.

These barriers were primarily not legal but sociological. Capital, for example, could have fled the United States in reaction to the New Deal and the NLRA, but did not, because most capitalists' paradigms involved localized, closed systems. They did not think in the 1930s to open up a plant in Mexico for sociological reasons (not economic or population ones, as we have been discussing now). Hence, human psychology imposed some "bumps" on the operation of the system.

Today, psychology, in addition to the supply and demand for labor, again helps explain the extreme weakness of the working poor in the face of the capitalists-- the capitalists have adjusted their psychology to eliminate localized effects. Capital has become more mobile, revealing once again the real labor/capital demand/supply balance, worldwide. From this perspective, labor's advantage in the early 20th century was totally dependent on a closed, localized system.

Labor supply in the developed countries has good reason to resist this because the localization psychology benefitted them by "speeding up" the natural development of economic history. But economic isolationism is their only hope for entirely maintaining that system, and such isolationism has other detriments which over the long term may just as well harm labor as much as it would help it.

As a consequence, and even more so primarily as a consequence of continued localized psychologies within the developing and underdeveloped regions, the working poor face much greater barriers towards organization than their predecessors did within localized contexts, when and if they should choose to make the attempt.

BRIGHT SPOT FOR LABOR?

If this story presents a bleak picture for labor in the short and medium term, it is only because it considers economic history at still a early-to-middle stage of advancement, at best. The end of the story tells a happy ending, for the simple reason of continued capital accumulation. What happened on a localized scale in the mid-20th century in developed economies provides a glimpse of what will eventually happen in a worldwide scale in the face of such continued accumulation. Such a process is welcomed by both capitalists and laborers, but in the long run it will increase the supply of capital compared to labor, especially through consumer markets, and thus increase the bargaining power of labor, and restoring the potency of unions. Once the laborers' "restoration" in economic leverage has occured, it can never again be reversed, because all parts of the world will have already long passed their population cycles, and the structure of middle class living will naturally cause capital to increase at a more rapid rate than labor.

[A18]

Single payer, Canadian health care is socialized.

Where in this thread did I mention single-payer health care?

I AM A DUMBASS!

You've called for it, like, 90 times

[TheresNoMoney]

You've called for it, like, 90 times

I didn't mention it once in this thread so don't look for something that isn't there. Yes, I have mentioned it in the past as an option (along with other options).

You don't have to have single-payer health insurance to lower health insurance costs. 

[David S]

The union structure works in some cases and not in others. The fact that unionization pinches a corporation's profits makes no difference if all corporations are unionized.

Are you planning to unionize China, Mexico, Vietnam and every other third world country on the planet?