Bankrupt GM Begins Slashing Jobs

By American News Project | Related entries in Cars, Economy, Jobs, Video

Hello this is Mike Fritz from the American News Project. We have a new story out that focuses on those most affected by the bailout of General Motors: laid off autoworkers.

It examines one of the central tensions in the public takeover of the company: Should federal dollars be spent building a lean, mean business model that will please Wall Street and increase value for shareholders (i.e. American taxpayers)? Or, should there be some built-in conditions designed to set aside as many manufacturing jobs as possible for certain people (i.e. American taxpayers)?

Now that we all own 60% of the company, it may be a story you find worth the watch:



This entry was posted on Saturday, June 20th, 2009 and is filed under Cars, Economy, Jobs, Video. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

30 Responses to “Bankrupt GM Begins Slashing Jobs”

  1. gerryf Says:

    That is the essential problem with the GM and Chrysler “fixes”–they are designed to quickly turn these companies profitable, not sustain an industry that provides jobs for American workers.

    When people call Obama socialist or left wing, they don’t know what they are talking about–Obama is just a tad left of Clinton…

    I could never figure out why the right was so outraged with Clinton–he was just barely a Democrat

  2. Mike A. Says:

    Unfortunately the Wallstreet vs. Taxpayer question is hiding the real issue. How can America begin to restructure it’s manufacturing capabilities to be competitive in the world market and benefit BOTH the Taxpayer and Wallstreet (remember these two are not mutually exclusive). The answer is complex and includes many ancillary issues such as US tax laws, government’s role, union’s role, etc.

    Because of it’s complexity, it’s easier to present the issue in the context of Us vs Them and create an atmosphere of distrust than to think along a long-term strategy.

    Our nation is young…and our attention span is short.

  3. wj Says:

    You do realize that the “we” that owns much of GM is very, very different that the “we” who are autoworkers at GM. Don’t you? Because what you are asking is this: “Should we tax the many to save jobs for the few? Jobs which they are, apparently, not willing/able to do for a price which would make the company viable.”

    At some point, people have to produce (things, or services, or something) at a price that others are willing to freely pay for them. Otherwise we could all just take permanent vacations at simply print money to buy all the stuff which was magically provided for us. I’m all too well aware, from personal experience, how wrenching it is when what you have done for a career is no longer in demand, and you have to start doing something else. Maybe even something which pays substantially less than before. Such is life in the real world. Adults get to cope with it.

  4. Jason Arvak Says:

    It examines one of the central tensions in the public takeover of the company: Should federal dollars be spent building a lean, mean business model that will please Wall Street and increase value for shareholders (i.e. American taxpayers)? Or, should there be some built-in conditions designed to set aside as many manufacturing jobs as possible for certain people (i.e. American taxpayers)?

    The idea that profitability would ONLY benefit Wall Street and that there is some kind of government obligation to subsidize unprofitable enterprises to artificially inflate employment of manufacturing workers is an economic sinkhole in practice. When the goal of public policy becomes ensuring employment regardless of whether the products created can compete in the marketplace, the result is economic and technological stagnation (there is no longer an incentive to compete) and political dysfunction (there is no longer any way to fix the system because all potential opposition has been bought off). The eventual outcome is systemic collapse once steadily shrinking government revenues (decreased economic competitiveness –> decreased revenues even as tax rates increase) can no longer keep up with accelerating demands for subsidized employment.

    The Soviet Union and other Communist economies amply demonstrated that your proposal is economic suicide.

    Of course, I predict that there will be no response to this criticism. Self-righteousness rarely feels compelled to actually debate. :)

  5. Jason Arvak Says:

    Note to all: Here is the “about us” page for the American News Project:
    http://americannewsproject.com/about

    Note the vulgar Marxist rhetoric about “privileged classes”. Let’s not pretend that this source is “independent”. It is a far-left propaganda machine to its core. It is very disappointing to see it featured on a site that while distinctly liberal has a tradition of moderation and pragmatism.

  6. the Word Says:

    Jason thanks for letting me see you for the far-right —”my side is the only one to be heard” viewpoint. I listened to the report. I heard a view that rarely gets heard. I went to the site and here was the first paragraph from their “about us” page.

    We’re inspired by what Joseph Pulitzer wrote more than 130 years ago: “Always fight for progress and reform, never tolerate injustice or corruption, always fight demagogues of all parties, never belong to any party, always oppose privileged classes and public plunderers, never lack sympathy with the poor, always remain devoted to the public welfare… always be drastically independent, never be afraid to attack wrong, whether by predatory plutocracy or predatory poverty.”

    I see nothing there to disagree with. Do you really believe we don’t have privileged classes? Do you really believe that there are some who are out for themselves and no one else?

    Without privilege, George Bush would have gone to Vietnam, had a drunk driving (and likely cocaine arrest) on his record and would have been asking other family members if he could sleep on their couch. As it was, some thought he’d make a good President. Open your eyes. I can’t imagine anyone can’t see that there are two Americas.

  7. the Word Says:

    Jason-
    One other thing. The correct answer likely lies somewhere in middle

    You wrote
    The Soviet Union and other Communist economies amply demonstrated that your proposal is economic suicide.

    I’d respond that trusting those at the top to regulate themselves or to watch out for anyone but themselves doesn’t have such a great track record either. I do notice that any effort to be concerned with ordinary Americans is met with contempt, while the outrageous salaries and perks of those who were driving the ship aground get barely a whimper from your side. Why does the GOP have such disdain for average Americans?

    You then said
    Of course, I predict that there will be no response to this criticism. Self-righteousness rarely feels compelled to actually debate. :)

    Grab the mirror because you are a parody of Glen Beck on this one. And he is a really out there.

  8. Tully Says:

    What Jason and wj said. Dead on target.

    Now that we all own 60% of the company

    BS. *I* do not OWN a single sliver of GM, nor will I in the future. If the bankruptcy plan goes through as planned the US gov’t will own 60%, the Canadian and Ontario gov’ts will own 12.5%, and the unions will own 17% through their pension and health plans. The rest will be owned by senior debtholders in the form of equity and warrants that may or may not be worth anything a few months later.

    Saying that owning a piece of the gov’t is the same as owning a piece of GM is socialistic sophistry. I have no right of title, property, or possession in either and cannot sell my hypothetical “share” in either, nor borrow against them. I do however get to pick up part of the tab for their failures, as do my children and their children. Lucky us. For GM that’s at $50B and counting.

    RE: ANP — Any quick check of their staff and affiliations and output leaves zero doubt that they are decidedly left-liberal “progressive” with socialist leanings. Quoting Pulitzer (one of the two founding fathers of yellow journalism, and a dedicated “social progressive activist” himself) does not change that but rather reinforces it. They are by their own admission dedicated to promoting stories that fall outside “mainstream” coverage, and they don’t mean stories that fall to the right of the already left-leaning MSM.

    Doesn’t mean they can’t produce some good stuff, but one should always be aware of the dedicated biases of fringe media. In this case, they’re decidedly left-wing alt-media, springing directly from other left-wing alt-media.

  9. gerryf Says:

    WJ,

    I love the whole “not willing/able to do (a job) for a price which would make the company viable” arguement, especially when it comes from a corporatist (or a coporatist supporter) who thinks CEOs do anything but make bad decisions.

    In 1965, CEO pay was 26 times that of their average worker. In 1980, it was 40 times. In 1989, it was 72 times. In 1999 it had risen to 310 times, and today it has reached 500 times.

    In that time, corporation after corporation has lost market share in almost every industry. Do they make money, yes, boatloads of it, but to the detriment of everything else.

    Why? Because these corporate executives are putting short term profit above long term viability–and then rewarding themselves handsomely for wringing out a few extra dollars–never once attempting to GROW the company in any real substantial way.

    But, le’ts try to save a few $25 an hour jobs and suddenly it is the worker who is being unreasonable.

    Oh, it’s not completely the fault of the idiots in management — all of us with our mutual funds and stocks demand that this quarter beat the last quarter and so on and so forth.

    IF we weren’t shipping jobs overseas, IF we did not demand double digit return on our investment and IF we were not shrinking the middle class at an alarming rate, there would be plenty of money for these evil workers who are just trying to enjoy a quality of life that is 1/500th of that of the corporatist.

    Damn the workers! Damn them all!

  10. Mike A. Says:

    gerryf,
    When corporations were considered more valuable broken into pieces and sold off for short term profits….that was when the game changed for the worse.

  11. gerryf Says:

    It’s all part of the same game, Mike. Profits are more important than people–and short-term profits are always chosen over the actual hardwork of building a company.

  12. kranky kritter Says:

    I agree with Tully, WJ, and Jason. Getting therefore classed as a “corporatist” rolls right off my back like water off of a duck. When folks spewing cant come round to seeing the whole picture of the huge fix our country is in, instead of part of the story, then maybe I’ll worry about their opinion of me.

    SoGerry, if you want to generally throw management and top execs under the bus, go right ahead. You get no quarrel from me. They deserve much of the blame. You constantly seem to think that citing executive excess makes your prescriptions.correct. I just don’t get that. While assigning blame is satisfying, it is not ultimately useful. Its not about blame, but rather responsibility. Collectively, America as a nation has no choice but to take responsibility for the spot we are in and take actions to fix it.

    WJ:

    I’m all too well aware, from personal experience, how wrenching it is when what you have done for a career is no longer in demand, and you have to start doing something else. Maybe even something which pays substantially less than before. Such is life in the real world. Adults get to cope with it.

    Bull’s eye. I find myself in a similar boat, and I have a Master’s degree. Not asking for any sympathy there, but also not giving mcuh to auto workers as a result. Remaining auto workers still have better bennies and still make higher wages than I or most in my industry do. Can GM make cars of competitive quality at a competitive price while payer workers more and shouldwering high legacy costs? IF they can, I don’t know how.

    If we care about American jobs and manufacturing capacity at all, then we have to do whatever it takes to make such enterprises sustainable domestically. If that means that GM workers have to make cars for $18 per hour, pay for more of their healthcare, and accept reduced pensions, I won’t cry that much for them.

    We’re gushing red ink right now, and the notion that the service economy we built represents real wealth (as opposed to trading inflated devalued dollars) is being exposed.

    The only way out of this is to go straight up the hill with a simple recipe that no one wants to employ: produce more, consume less.

  13. Mike A. Says:

    Kranky,

    “Produce more, consume less” is a good tag line…on the line with “drill baby, drill”, but it ignores the complexity of this issue and the poor state of affairs this country has found it’s onshore manufacturing base in.

    I’ve been in electronics manufacturing for 25 years and watched it’s transition to offshore manufacturing. In my career I have been involved in over 25 rounds of layoffs and two company closures. I have watched entire facilities scrapped for tenths of pennies per unit. In order to survive in this industry I have been willing to pick up my family and move repeatedly to various areas of the US. I have been very lucky and I am grateful that I am gainfully employed. BUT this game is stacked:

    - Tax policies that favor breaking apart corporations rather than investing in growth for the long term.
    - Tax policies that encourage moving manufacturing offshore rather than investing onshore
    - Wall street (and the average citizen) demanding unsustainable growth across all markets and watching each quarter’s results as the only indicator of a company’s value.
    - BOD’s whose primary goal is to keep their BOD position.
    - Executives who view their positions as temporary entitlements to more lucrative contracts.
    - Unions demanding too much compensation and wielding too much power in the organization.

    In short – the game is setup for short-term (tactical) actions, not for long-term (strategic) decisions. Everyone’s in it for the short term and they’re all gonna “get mine” regardless of the impact on the company.

    Producing more on a poor foundation will not yield a strong manufacturing base. The rules of this game need to be changed.

  14. kranky kritter Says:

    Mike, I don’t see anything to disagree with there. When I said “produce more and consume less, ” I did not do so in an attempt to be blithe or dismissive or to distract folks from the fact of executive complicity, or to insult average folks.

    All those things you mention need to be looked at quite seriously. I especially agree with your points about unsustainable growth, the obsession with quarterly results, and the conflicts of interest that upper management take advantage of.

    These dynamics you speak of are all manifestations of too much (inflated) capital chasing too little real value (production). Much of the real inflation in our system is just now becoming too obvious to ignore. As foreign investors slowly (we can only hope) but surely pull back on their willingness to invest here and finance our overspending, the effects of the grossly inflated supply of dollars will be very very painful. This will lead to real declines in the American standard of living. But that’s a big part of what it will take for us to rebuild a productive base. And it’s a big part of what it will take for us to consume less.

    Opinions of the naive and the hopeful notwithstanding, America will not voluntarily reduce consumption. They will reduce consumption because their purchasing power diminishes.

  15. gerryf Says:

    You’re right Kranky, I have no problem throwing the corporate ceos under the bus, driving over them, and then throwing the bus in reverse.

    They helped create this mess we are in, along with, as Mike so aptly points out, years of ridiculous government and corporate policies encouraging it all in the name of short term profits. I’ll even grant you that unions have helped to make the situation worse, but your assessment of a factory job is off.

    First, if you ever worked on a manufacturing line, you wouldn’t think it was such a great job, even at whatever made up hourly wage Fox News is currently spewing. It’s a miserable job; the wages were bargained for in a fair process, and in a normal economy, you would end up paying about the same wage anyway even without the unions. The problem is this is not a normal economy, it is not a free market, and everything is geared to the wrong priorities.

    Second, the auto companies and unions already agreed to a contract that creates a two-tiered wage structure for new and old workers with new workers making LESS than $18. Furthermore, the estimates of workers wages are way off base.

    I know autoworkers with 20+ years in and they don’t make the numbers the media spews on standard hours and pay. They DO make a decent living when you factor in overtime–overtime that results from too many jobs to do and companies failing to hire new workers.

    Hey, I get the

  16. kranky kritter Says:

    So then we agree on self-serving exec practices. Cool.

    Never said a factory job was great or even good, Gerry. It aint, so we agree there, too. Why I went to college, even though that plan didn’t deliver as much as I’d hoped. My point in speaking of autoworkers is that for a time auto workers enjoyed a way better deal than the majority of other factory workers.

    Like it or not, for better or for worse, that time is over. Like it or not, car assembly is, at least comparatively speaking, unskilled labor. That puts all the folks seeking such jobs in the same overcrowded and sinking boat. Supply and demand isn’t good or evil. It just is. Ruthless and inescapable.

    Second, the auto companies and unions already agreed to a contract that creates a two-tiered wage structure for new and old workers with new workers making LESS than $18. Furthermore, the estimates of workers wages are way off base.

    The UFCW routinely did that when I was in it. Cut a deal to screw the workers that haven’t been hired yet. Real f%^&kin fair. So for GM and Chrysler, the question is what the labor cost is right now as they try to make cars. Sounds to me like what they bargained for was a plan to eventually get labor costs down near market rate. How long is that supposed to take, and how do they compete in the meantime?

    Any discussion of “decent living” deserves real numbers. What wage rate and hours worked do we want to use? I’ll toss out a few examples. If you make $25 an hour and work 40 hrs week, you earn 52k a year. Around median. If you work 10 hours overtime weekly and get time and a half for that, you get about 72k. If you earn $28 an hour, you get 58k. If you get 10 hrs OT at time and a half, now you are up at 80k and well above the median.

    I won’t disagree that this hardly qualifies as rich, it’s just decent to pretty good money if you live in Michigan. And it’s quite a bit more than most other domestic factory workers dare to hope to earn anywhere else.

    I am happy to take you at your word for now that the wage numbers for UAW workers as reported in the media are off.By all means give me some better data to work with. Just go ahead and give us some real verifiable numbers for let’s say current wage rates.

  17. the Word Says:

    Tully wrote–
    on ANP some things that I agree with and some I don’t.

    I didn’t see for instance the bogeyman when I read their first paragraph on the ANP page. I would think every journalist should take that approach. If you have a problem with the name Pullitzer just read the words and tell me what you have an issue with? As to name it and ignore it logic. I think it’s dangerous. How can the MSM be both leftist and leave room for these groups to cover (on the fringe) that information or perspective that you so easily dismiss? You can’t have it both ways. I acknowledge that both sides need to find a middle but I get a real F-them vibe towards people at the other end of the spectrum. For instance I have broker friends who tell me how tough it is when the market is down 5% and their clients go from being in the top 1% of the world to stay in the top 1% with no effect whatsoever in their daily living while the next guy can’t feed his family and is losing his house and he can’t be bothered to care. We need some balance and perspective.

    I was responding to the interviews which frankly tell a side of things that rarely is told. I would think we would be flooded with it if you were correct that only the liberal side gets out. Unions have been making concessions for decades, Often only to find that what they bargained down to isn’t delivered on either. Many union employees took less money to get benefits or pensions that were then later reneged on by the employer.

    Branding is just an easy way to ignore an argument. I think there seems to be a consensus that things need to adjust to see both sides. What did you feel was rant worthy or unduly biased in the report? I just saw them presenting that side which is their role. I would hope people on the other side would say, “That is a point, I should take that into account also” Otherwise everyone miraculously agrees that people in their sphere and the reality they live are exactly like themselves. What is hard to take is that the deck is stacked. People can run the company into the ground and be left with everything and the people at the bottom are Always the least protected. Some of us would just like to see some fairness.

    If CEO jobs were being replaced offshore, it would be illegal by midnight. We can’t fix everything and life will never be perfect but it would be nice if all of our problems were addressed as if we are all in this together.

    I am also curious as to who you think are credible sources of information? Dismissing everyone with a different point of view isn’t really productive. So where do you go for network or newspapers or magazines for news? Who do you think is biased or unbiased? Where do you think you get information you can trust? We’ll probably not see eye to eye but I genuinely am curious.

  18. Tully Says:

    You’re being somewhat incoherent, tWord.

    ANP is what it is. I have no objection to that. What I object to is attempts to paint them as what they are assuredly not — an even remotely impartial source. They are not. Not even remotely.

    I don’t “trust” any information source. But I can get decent information and viewpoints from almost ALL sources if I know just where their innate bias or behavior trends lie. I then know how to assess what they say, and what is likely missing, and what is likely presented out of context. Etc.

    And the one tool everyone should use, and almost no one does, is to know how to read or watch or hear a “news” story so as to separate statements of verifiable (or at least falsifiable) fact from the oozing editorialism and pseudo-analysis that pervades almost ALL media today. To spot the info that should be there, and isn’t. To spot the info that is there, but shaded to slant. To spot the info that is there, but might not be factual. To spot the evidentiary weak points in claims made. To know what is missing, and how what is presented may be intended to influence your opinion rather than to actually inform you.

    We have been raised over the last several decades on the myth of an impartial and accurate media. As the last decade-plus has shown, it does not exist, and possibly never has — the myth itself is an artifact of the monolithic broadcast and communications monopolies of the 20th century. Just as the current fragmentation and niche-marketing of “news” is a predictable (and predicted!) artifact of current information technology.

    Some outlets are much better than others in aiming for factual imaprtiality. Some just plain suck at it. But all of them have their own trends and biases, and if you don’t know those trends and biases and don’t use the tools available to you to vet the results, you are doomed to simply picking sides and believing whatever your favorites tell you.

  19. ExiledIndependent Says:

    Bring corporations back to America by eliminating corporate taxes. Discuss.

  20. the Word Says:

    Tully-
    I was rushing. I didn’t like it when I read it back either.

    I do tire of the constant MSM liberal socialist bias parroting. I just didn’t see much to go off on a rant with in the report and thought it showed more bias on the part of the listener than the bias of the report. Hope that is clearer. There certainly wasn’t anything to dismiss in total the situation of people in a bad spot.

  21. Tully Says:

    Gotcha, tWord. Hope what I meant came through as well.

    QUESTION AUTHORITY was one of the catchphrases off my generation. Shame that so few ever really took it to heart, even then, or realized that AUTHORITY is not just the other guy.

  22. kranky kritter Says:

    Very well put, Tully. When I wrote about this subject for my Master’s project, I called this “being an active editor.” If you don’t actively process the constantly growing load of available info, if you are uncritical, you have little chance of figuring out what is really going on to your own satisfaction.

    Great line above about the signal to noise ratio, too.

  23. ExiledIndependent Says:

    I wonder if microblogging is going to be subject to this kind of shenanigans from the FTC: http://tiny.cc/FTCisBogus

    What think you, Donklephants?

  24. the Word Says:

    kranky and tully-

    I agree with the post as well. What rankled me is that there is a bias to just write off info based on non-active editing to use your time kranky. Label it and forget it or don’t address it at all. There is valuable information from most sources. As Peter Gabriel said “all shades of opinion feed an open mind” My concern is that MSM has become the “I can use this and ignore everything” label when no matter where the info is from, if the argument is valid and facts are presented, we’d all be better off putting it into our formula for arriving at a balanced conclusion.

  25. kranky kritter Says:

    True word. But ultimately my sense of human nature is that most folks really don’t want to do it. They prefer a “good enough” sense of rational ignorance, and are also held down by inertia.

    That means that we’re all still stuck with the model where driven practitioners share their work and shop for an audience. The problem there is that you will go broke very quick telling people things if they don’t want to hear them. Most people prefer being told only part of the story, from a perspective that reinforces their existing biases.

    Ask any psychologist, and he or she will tell you that folks will only deviate from their well-worn schemas when circumstances force it upon them. And by circumstances, I mean life circumstances, like say a lay-off or serious illness or hyperinflation. Not a forceful argument. Folks may mull a strong enough argument, but usually they default to existing schemas with little or no adjustment.

  26. Tully Says:

    There is indeed valuable info from most sources, the problem is weeding it out from the non-valuable and actively false info that comes with it. There’s also much to be learned from listening to other perspectives. The trick is remembering that perspective is not the same thing as info. One can sympathize (or not) with a different perspective, even understand it thoroughly, without in the least agreeing with the conclusions the offerer attempts to lead you towards.

    A failure to agree 100% with the obsessed, of course, makes you one of THEM. Whatever THEM is for the person you’re not agreeing with. I always count it as a victory for myself when I get labelled as one of THEM by opposing sides for the exact same statements. :-)

    The trouble with trying to “address” all offered perspectives is that it always requires more work than there is time and energy available. One can drown in the attempt, when one has other and better things to do. At some point one must make a ballpark call using some set of criteria, and satisfice. Most people use their own biases as the criteria for doing that.

  27. kranky kritter Says:

    The trouble with trying to “address” all offered perspectives is that it always requires more work than there is time and energy available. One can drown in the attempt, when one has other and better things to do. At some point one must make a ballpark call using some set of criteria, and satisfice. Most people use their own biases as the criteria for doing that.

    Agreed. The pedagogy of critical thinking (according to Richard Paul if anyone cares) insists that there is always an end-state goal of making a decision. It does not counsel endless debate and consideration. It declares that critical thinking should have point, some sort of decision or action which actively drives the thinking.

    If any of us cares about the actual world as opposed to sound of our voices and optimizing our various armchair philosophies, then we all ought o consider that even the moist high-minded thinking should have a real-world imperative.

    IOW, what Tully said. LOL.

  28. Tully Says:

    Or, as Monty Python said… “Get on with it!”

  29. the Word Says:

    Or as the Church Lady said “Isn’t that convenient?”

  30. the Word Says:

    kranky-
    This is a family friendly site Please keep moist high minded thinking to yourself. :-)

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