GM’s Layoffs Made Possible by Weak Unions, Automatization, and Bad Priorities
Prof. Leo Panitch and former auto worker Frank Hammer discuss how the GM’s 14,000 layoffs in Canada and the US are made possible by the weakening of unions, outsourcing, and misdirected production priorities
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore.
General Motors announced on Monday that it will close five of its plants in Canada and the U.S. and lay off about 14,000 workers. Some of these plants, such as the one in Oshawa, Canada and the one in Baltimore, have been in operation since the 1950s.
GM says that the decision is necessary because of the declining consumer demand for sedans such as the Chevrolet Impala, the Chevrolet Cruze, and the Buick Lacrosse. Also, it will halt production of the hybrid Chevy Volt. Now, GM did not connect the closing of these plants to Trump’s trade policies, but Ford Motor Company has said that its bottom line is suffering at least $1 billion in losses because of the tariffs on imported aluminum and steel that Trump imposed earlier this year. Let us remind you that back in 2009, the U.S. and the Canadian governments bailed out GM, which entered bankruptcy in the wake of the global financial crisis. The U.S. bailout cost the taxpayers about $12 billion. More recently, the Chevy Volt have benefited from over $100 million in subsidies from the U.S. government.
Joining me now to discuss the GM plant closings are Leo Panitch and Frank Hammer. Leo is a senior scholar and professor emeritus for political science at York University. His most recent book is The Socialist Challenge Today, co-authored with Sam Guindon. They also, of course, authored a piece in the Socialist Register 2019, titled Trumping the Empire. This Socialist Register is titled A World Turned Upside Down. Thanks for joining us, Leo.
LEO PANITCH: Glad to be here, Sharmini.
SHARMINI PERIES: And Frank Hammer is a retired auto worker from Detroit, a longtime UAW union member, and a member of the Real News Board of Directors. Frank, good to have you here.
FRANK HAMMER: Thank you for having me.
SHARMINI PERIES: All right. Frank, let me start with you. Your reaction to the GM announcement? You’ve been an auto worker for so many decades, and they are closing two plants in the Detroit area. So let me get your reaction to this, and how some of your former plant workers, and maybe retired workers, and the current workers that you’re working with, are reacting to this decision.
FRANK HAMMER: Well, first of all, it was a shock to GM workers–not because they didn’t know that we’re having some issues in General Motors. There are several plants that are down to one shift. There are plants that don’t have future product in their mix. There are issues that are going on, but it was a shock. That GM made the announcement the way it did–Mary Barra hastily called this meeting, the shareholders meeting, on Monday morning, and thanks everybody for showing up on short notice. And I just recently got the notice that UAW Local 22, which represents the workers of Detroit and Jandek assembly plants, he announced–the shop chairman of that Local–announced that he was informed Monday morning that he had to attend the emergency meeting with, you know, a GM executive that was scheduled for the same morning.
So the UAW, the leadership, didn’t indicate when they learned about this, the status of these decisions Mary Barra announced. But it certainly had a lot of shock value. And the UAW apparently gave no indication that it was pre-warned. So it doesn’t speak very well to the relationship that, you know, there’s supposed to be all this partnership between General Motors and the UAW.
So I think the first reaction is this is a state of shock. And I know that one of the plants, the one in Canada, Nashua, that the workers actually walked out of the plant in protest of the announcement. My plant is one of the ones that was announced to be closed. It’s the Warren transmission plant. And there I once represented 3500-4000 workers. We’re down to less than 300 workers. And we have a million square feet of production space. So workers are, you know, rightfully concerned.
SHARMINI PERIES: And Frank, what are the reasons being provided to the workers in terms of the closings?
FRANK HAMMER: Well, the reasons that are being put out in public has to do with, you know, GM cars, certain cars are not selling, and so on. Namely the big sedans, is what they’re saying. But GM is also putting out that this has something to do with producing electric cars. I don’t quite understand the connection. And also saying that they’re going to produce driverless cars. I don’t know what that’s got to do, what the connection between that is and closing plants.
SHARMINI PERIES: All right. Leo, let me go to you. You are in Toronto, not too far from the Oshawa plant that is closing. How is all these decisions to close the plant in Oshawa and General Motors laying off 14,000 workers, how is that being received there?
LEO PANITCH: Well, it’s the main item on the Canadian news. It’s all over the front pages of the newspapers, as you can imagine. And the responses to it have been, on the one hand, the Trump-like premier of Ontario Doug Ford saying the ship has sailed, there’s nothing we can do about it, our hearts go out to the workers, and our federal Prime Minister Trudeau meeting with Jerry Dias, who’s head of Unifor, the former United Auto Workers in Canada, and listening to him and his anger, but not doing anything more than saying we’d like to help the workers.
On the other hand, you’ve had one response echoed in letters to the editor coming from a business journalist in the Toronto Star calling for the nationalization of the whole of General Motors in Canada. Not just this plant that has been so productive, and has the best paint shop in the world, being closed, but the whole of General Motors should be nationalized, and we should use those facilities to produce the most advanced technology, either automobiles or public transit vehicles, that we could on that basis. Now, that’s thinking outside of the box, but it’s the kind of thinking that’s needed in the face of this type of corporate hubris, which obviously has been announced now, only now–it’s been planned for a very long time–in the wake of the American midterm election. The reason this was not announced before was because of the wrath it would have incurred from Donald Trump had it been announced before the midterm election.
SHARMINI PERIES: Leo, you have written the book In and Out of Crisis. In the introduction to this piece I alluded to the fact that after the financial crisis, GM was bailed out with taxpayer dollars both here in the United States and in Canada. And of course, there’s been a deterioration of wages and workers’ benefits and so forth since that crisis, and perhaps even before that. Tell us the climate in which these workers’ conditions have deteriorated over this time.
LEO PANITCH: Well, those who’ve held onto jobs, they are in much better position than their former workmates who lost their jobs in previous years, as Frank said. As the union let, you know, GM lay off people while giving them promises that they would keep plants open, those who’ve been hired in have been hired in on a two-tier basis, whereby younger people are hired at half the wages that workers who have been there for some period have had. And that, of course, breaks the basic principle of union solidarity. There’s been a significant weakening of the unions as a result. And you know, as Jerry Dias said, GM has shown the middle finger to the Canadian government, both Ontario and federal government, in making this decision after taking all that money from them. But they’re also showing the finger to the union in question, which has done everything possible through concession bargaining to keep these plants open. And in the long run, it’s a reflection of the weakness of the union.
SHARMINI PERIES: All right. Frank, let me go to you. You were saying when you worked at that plant there was some 4000-plus workers, and now it’s down to 250 or so. How did this decline happen? And also, if you could address the ways in which a just transition could take place for some of these workers and save the jobs, instead of laying them off.
FRANK HAMMER: So, the process that’s been underway for decades has been a combination of outsourcing, whether it be non-union locations in the U.S. or to locations outside the U.S. The best example is, of course, Mexico, where GM just months ago announced that they were going to produce the new Chevy Blazer, a crossover, or an SUV, in Mexico. Or producing the work, the cars, in China. Buick is produced in China for U.S. import. I recall as far back as 2005 General Motors telling all the suppliers, if you want to continue to do business with us, you have to go to China.
So it’s been that, partially. And the other part, of course, is automation and robotization, so that if you walk into my plant today, you know, you hardly see a human soul. You hardly see a worker, because it’s all machines. So it just seems to me that General Motors is going more and more to a workerless factory, which is their ultimate aspiration, as well as going to driverless cars. That’s what’s gone down, and that’s–we’ve lost product at my plant. We only make transmissions now. And there’s no future work in sight.
But I think this announcement is also very clearly being used to exercise leverage on the negotiations that are scheduled for next fall. And Mary Barra and her conference made it very clear that that’s one of their aspirations. And UAW, the GM department director put out a letter two weeks ago in advance of Monday’s announcement saying that we’ll all be lucky if we have a job, and that job and product security will be the number one demand in the next round of negotiations. So this is already setting up the framework for what to expect in 2019.
So to your second questio, the UAW at its convention in June acknowledged, I think maybe for the first time, that we are in the throes of climate change, and that this is a serious problem. It’s, you know, we should really use the terminology climate catastrophe. And if it takes its words seriously, it should be responding by saying if there are any facility that are to be closed, we should reopen the dialogue and talk about how can the plant not be closed, but reconverted, repurposed, to produce, whether it be transit components, whether it be renewable energy components. But these facilities can be put to use. And our workforce, which is highly trained, can be put to making products that we need so that we can reduce carbon emissions and, you know, try to secure. A safe planet for ourselves and our future generations.
SHARMINI PERIES: Leo, in terms of GM’s own policies, it is, of course, in the business of making a profit here, nothing else. But would a different strategy have been possible for the company which would allow these plants to remain open, for the jobs to remain in place? And referencing some of what Frank just said about a, you know, environmentally conscious policy that would also save jobs?
LEO PANITCH: Well, look, the great irony of this is that the biggest sellers for GM at the moment are these giant pickup trucks. You know, in today’s Toronto Star, just plastered with articles and devastating photographs of the workers who are going to be laid off, there is a full-page section, an ad that obviously was placed a long, long time ago before it was run, called Best New Vehicles 2019. And second at the very top are the Silverado and Sierra, the large pickups that GM produces, which the Oshawa plant is assembling.
So you know, GM is in the situation of talking about something that’s not going to happen for two decades at best in terms of driverless cars, or completely electric cars, while it’s making its profits on these gas-guzzling pickups. That’s what it’s making its profits on. That’s what it’s primarily going to continue producing. And the, I think Frank’s absolutely right, that this particular announcement has everything to do with the forthcoming negotiations and putting the scare into those workers who are there.
At the same time, there is tremendous research and development capacity, with brilliant engineers, brilliant skilled workers, brilliant technicians who even are here in Canada. There are two R&D centers in Canada. And just last year the City of Toronto approved GM opening a site right on Lakeshore Boulevard where they were going to showcase their technological expertise. You know, it is about time that the union itself started calling for democracy in the automobile sector. And we desperately need it, because so many parts companies–there are three Canadian international very competitive parts companies–one of them already announced the closure of two plants by virtue of this announcement in Oshawa.
It’s about time that it was said loud and clear that we are going to democratize this crucial sector of the economy. We’re no longer to be handing over billions of dollars with absolutely no guarantee with regard to economic planning of both technology and late [inaudible] in our society. That’s the conclusion that the left needs to draw from this, and indeed, get some ambition as a result of this kind of devastating [inaudible].
SHARMINI PERIES: All right. Either one if you can respond to this, but it seems that part of the motivation for closing these plants is based on the declining gas prices. Leo, I mean, those big trucks are gas guzzlers, which is leading consumers away from, apparently, more fue-efficient cars. This is what they’re saying, because the gas prices are lower. Now, if you factor that in, and we are facing an environmental crisis, why do people want to move towards SUVs and those large trucks you saw in the Toronto Star, Leo?
LEO PANITCH: Well, Frank may be able to answer this better than I. I mean, I don’t quite understand why this is so popular. I imagine you’re right that it partly has to do with somewhat lower prices at the pump. But I think people are simply not conscious enough of the effects of this in a larger sense.
And you know, it must be said that there is a contradiction here. Were you to make a case for bringing the auto sector into the public sector, what would environmentalists be saying about this? And part of the problem that I think exists, certainly in terms of our governments but even more broadly on the left, is we need to be strategically planning ahead of time. If there were plans on the shelf for how plants like these could be converted into socially useful production with the capital that’s there, this technology that’s there, the tremendous skills that are there–if there were plans on the shelf, we’d be readier to move. And we could be ready to move in a way that was ecologically sustainable. The fact that we aren’t planning at that level–and indeed, I think that great unions in the past like the UAW. Aren’t putting the resources into doing that is an indication of the problem.
SHARMINI PERIES: All right. Frank, let me have you respond to this, as well. Given the environmental crisis we are facing, the globe is facing, and declining oil prices, what is this desire to move move towards larger cars, SUVs, and trucks?
FRANK HAMMER: Well, I think Leo said it pretty well. And I just remembered that the heightened contradiction is evident in a plant in Arlington, Texas, where apparently all the power that’s supplied to the assembly facility is all by renewable energy. It’s like solar panels or wind turbines, I’m not sure. And inside they’re producing the trucks.
So General Motors has responded in part to the question of climate change and environmental sustainability, but it still wants to make money off the trucks. And the trucks are very, very popular, as are SUVs. And the fact you can get, you can go and get gas at $2.50 a gallon here in Detroit, you know, makes it a no-brainer. Of course people are going to go out and get trucks.
SHARMINI PERIES: There’s been a huge campaign on the part of the NDP and people like Naomi Klein and others leading a campaign for the auto sector and for labor unions and so on to get a grip on the environmental disaster we are facing. In places where the unions gather, is this, is this having an impact?
FRANK HAMMER: So. I was speaking with a friend of mine who, by the way, works at the Detroit Hamtramck Assembly Plant, and there’s a whole story there. Because when it came into Detroit only 33 years ago it was done by eminent domain, and whole town, which used to be a large community of many, many Polish residents, auto workers, was all cleared out, was wiped out so that they can put this plant in place. And now they’re talking 33 years later, now we’re talking about closing it down, and what impact that’s going to have in Detroit.
So anyway, I was speaking with him. And he said, you know, auto workers don’t talk about climate change. There’s nobody in this plant that’s talking about climate change. And I put that at the, you know, at the feet of the UAW, that I think I saw one article in the last four years in our UAW publication talking about climate changeand environmental sustainability. So it has to address this, and of course the question of the gas prices is a deterrent. It’s something that doesn’t facilitate the conversaton of what it means for–transportation is the leading emitter of carbon emissions today in the United States, over and above power plants. It’s vehicles, it’s transportation. So that dialogue has to happen, and we have to convert the plants to produce mass transit and get people away from their vehicles, and start to realize that we have to change our ways, and that’s going to be very difficult. The UAW has taken a backseat as far as convincing its own membership.
LEO PANITCH: I do have to say, having also pinned this to some extent on the unions, I think we have to be very careful not to blame the victim here. This is a matter of a set of capitalist corporations, of which GM is one, which is itself talking a good line on the environmental crisis, electric vehicles, et cetera, et cetera, but is investing in the destruction of the environment. And the only way to overcome this does not lie primarily with the workers who, in this sense, are passive recipients of capital’s decisions. We need to have a system of democratic economic planning and take these decisions about what is invested, where it’s invested, what is produced, how it’s produced, away from these undemocratic giant corporations. They are at the root of the problem.
SHARMINI PERIES: All right, Leo. Leo is the author of The Socialist Challenge Today, that he co-authored with Sam Guindon. And Frank Hammer–did you want to say something, Frank, before we left? Before we leave here.
FRANK HAMMER: Oh. Certainly the responsibility lies with the capitalist elites. And the question here is what is the road forward for workers? And I think workers are going to have to take the lead and say we want to repurpose our economy and repurpose what we do so that we can have a sustainable future. And the blame is certainly not on the worker.
SHARMINI PERIES: All right. I’ve been speaking with Frank Hammer, a retired autoworker from Detroit, and Leo Panitch, the author of The Socialist Challenge Today. I thank you so much for joining us.
FRANK HAMMER: Thank you.
LEO PANITCH: So long, Frank. So long, Sharmini.
FRANK HAMMER: Thank you.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.