Bankruptcy means: richer bosses, poorer workers
By
Martha Grevatt
Published Jan 28, 2006 8:47 AM
Bankruptcy is good business. No, that’s
not some Orwellian doublespeak along the lines of “War is Peace.”
It’s the conclusion being drawn by more and more top executives.
This corporate consensus is the topic of a recent New York Times article
entitled, “Gee, Bankruptcy Never Looked So Good.” (Jan.
15)
United Air Lines (UAL) has just emerged from bankruptcy, proclaimed
solvent after looting workers’ pensions and extracting huge concessions
from airline workers’ unions. For so skillfully pulling off this
embezzlement through the grand theft of workers’labor, the corporate
thieves are being handsomely rewarded.
As the Times article points out,
on Jan. 12 “unsecured creditors and executives at the UAL
Corporation...agreed to a deal in which 400 executives stand to share an
astonishing 10 million shares...worth an estimated $115
million.”
How are the workers being rewarded for their sacrifices?
They aren’t. But the bosses, who gave up nothing, justify their
priorities. In the words of UAL spokeswoman Jean Medina, “It’s in
everyone’s interests for management to have this component of management
compensation tied to the future performance of United’s stock
price.”
UAL is not the exception but the rule. Bankruptcy courts
approved hefty bonuses for US Airways executives after pensions were dumped and
workers took three successive pay cuts. These concessions are locked in until
2009.
On Jan. 16 Northwest Airlines asked a bankruptcy court to void its
contracts with flight attendants, pilots, customer service agents, and ramp
workers, even after those workers had agreed to concessions. The pattern was
repeated throughout the steel industry and has hit the auto and auto parts
industry with Delphi’s filing for bankruptcy last Oct.
Sometimes
bankrupt companies are then bought out by people like Wilbur Ross, CEO of
International Coal Group, blamed for the tragic deaths of the miners in Sago,
West Virginia.
According to the ICG web site, “Inter national Coal
Group was organized by WL Ross & Co. LLC to acquire the principal operations
of then-bankrupt Horizon Natural Resources on October 1, 2004.” Ross also
has strong connections with Steve Miller, hired to put Delphi into bankruptcy
and destroy the workers’ livelihood.
When Miller put Bethlehem
Steel into bankruptcy, Ross purchased the company cheap and then sold it out
fairly quickly for a profit of $500 million. On Jan. 11 it was reported that
Ross was reviewing assets of distressed auto suppliers for possible takeover and
stated that consolidation was “even more imperative” in
2006.
In nearly every case, a company leaves bankruptcy “leaner and
meaner.” After slashing wages and cannibalizing pensions, it is better
poised than before to exploit a smaller, lower-paid workforce. It’s all a
big scam perpetrated by corporate con artists.
Pensions, jobs under
attack
Bankrupt or not, major firms are going after pensions and
retiree health benefits. Earlier this month IBM suspended its pension program.
Alcoa, the world’s largest aluminum company, announced that new salaried
employees would not receive traditional pensions. Are union pensions next on the
chopping block?
GM and Ford asked for and received from the United Auto
Workers an increase in retiree health care costs.
Equality of sacrifice?
Forget it. GM’s CEO Rich Wagoner states, “Here’s where people
get this wrong: They say, ‘Why are executives paid so much? You have to
ask: Why are professional athletes paid so much?’ The capability of
successfully trying to turn around an unsuccessful automobile company is a very
rare and highly sought after skill set.”
In 2004 Wagoner’s
“skill set” got him a $2.2 million salary, a $2.5 million bonus, and
400,000 stock options worth $5.1 million.
Meanwhile, workers at GM, Ford
and DaimlerChrysler are left wondering if they will have a job long enough to
even have a pension. Last month GM announced plans to cut 30,000 jobs. GM
recently revealed plans to go after the “jobs bank,” a program that
allows laid-off workers to receive 40 hours’ pay. Ford has just announced
massive layoffs. The Jan. 22 Detroit News describes how Daimler Chrysler is
scheming to eliminate skilled trades jobs by combining
classifications.
The auto bosses cite loss of market share to foreign
competitors to justify these drastic cuts. This is a bogus argument because they
are selling as many cars as ever. In 2005 GM sold nine million vehicles
worldwide, the most it has sold since 1978. DaimlerChrysler sold a record four
million vehicles, led by its Chrysler Group.
Delphi workers point
the way forward
These attacks are widespread, and the
situation could seem depressing and hopeless, but the inevitable resistance to
capitalist restructuring is emerging.
A tremendous fightback is spreading
throughout the Delphi corporation, started by rank-and-file UAW members who call
themselves “Soldiers Of Soli darity.” As reported in an earlier WW
article, SOS has been able to slow production by way of “work to
rule.”
SOS has supplemented its in-plant strategy with public
demonstrations, including a Jan. 8 picket of the North American International
Auto Show and a Jan. 23 picket of Delphi world headquarters. After the auto show
picket, the Detroit capitalist media could not hide its nervousness about SOS.
The Flint [Michigan] Journal bemoaned that SOS was creating a militant
climate and that Toyota might decide not to build a plant there after all.
“You can bet Toyota officials read the local newspapers carefully and are
aware of the SOS activities,” wrote Tom Walsh in the Detroit Free Press.
The whole situation is making the ruling class jumpy, further evidenced by the
FBI visiting two progressive Michigan lawyers involved with SOS.
Delphi is
showing signs of conciliation. CEO Miller on Jan. 16 told the World Automo tive
Congress that his “committed ob jec tive is to arrive at a consensual
resolution.” UAW President Gettelfinger said that was “certainly a
step in the right direction.”
Stronger language came from SOS spear
header Gregg Shotwell, who hails from Flint, Mich., the site of the original
1937 sit-down strike. “A reporter asked me, ‘If you strike and shut
down GM, won’t you be biting the hand that feeds you?’ We
aren’t biting the hand that feeds us. We are biting the hand that slapped
us, cheated us, and robbed us. First, we’ll bite the hand. Then,
we’ll go for the throat. What have we got to lose?”
The
bankruptcy courts conspire with corporate America and Wall Street financial and
banking institutions to profit at the expense of the unions and its members.
Also sitting on the UAL board that approved the benefits for the UAL executives
is Miller, who was the architect of the Bethlehem bankruptcy, and is now doing
the same thing to the UAW and it’s members at Delphi.
If the
workers are able to stay Miller’s hand and save their contract, it will
lift the hopes of the whole working class and inspire a broader
fightback.
The writer is on the executive board of UAW Local 122 at
DaimlerChrysler’s Ohio Stamping Plant.
Articles copyright 1995-2012 Workers World.
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