Auto barons slash more jobs

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Auto barons slash more jobs
By Martha Grevatt
Published May 20, 2009 3:05 PM

The crisis in the auto industry is spreading like wildfire.

Beside the 25,000 workers laid off because of the latest wave of plant closings at General Motors and Chrysler, many others are impacted. Notices have gone out to 800 Chrysler and 1,100 GM dealers that their franchise agreements will not be renewed.

A total of 103,000 mechanics, salespeople and other workers could lose their jobs.

Beyond that, GM will close 470 Saab, Hummer, Saturn and Pontiac shops when it sells or discontinues those divisions. Another 800 GM dealerships are expected to fail as a result of the sluggish economy.

These cuts are taking place all over the country. No community will be untouched. The picture of the economic crisis—boarded-up houses, stores and restaurants—will now include the striking image of boarded-up dealerships.

These cuts affect a huge number of union workers. The United Auto Workers and the International Association of Machinists represent tens of thousands of mechanics and other dealer employees. Some salespeople are also unionized.

The GM dealers will not be forced to close until the fall of 2010, but Chrysler’s franchise agreements are set to expire June 9. In other words, 40,000 workers and 800 family businesses were given less than a month’s notice that their lives were being shattered.

Chrysler has informed the affected dealers that they cannot sell any Chrysler vehicle or part under warranty after June 6. This short notice would normally be illegal. “Under the laws of most states,” explains the May 18 Detroit Free Press, “if Chrysler wanted to end a dealer contract it would have to give the dealer several months to wind down its business, offer to buy back vehicle and parts inventory and, in some cases, offer reimbursement for a number of costs, such as remodeling.”

Thus Chrysler is asking U.S. Bankruptcy Judge Arthur Gonzalez to rule that federal bankruptcy law supersedes these state laws.

Furthermore, stated the Free Press, “Any payments or damages from ending the contract would be left with the ‘old’ Chrysler whose liquidation won’t cover the liabilities it assumes.”

This is the same process by which Chrysler is selling eight plants and cutting over 5,000 jobs. Why is Chrysler taking a total of 45,000 jobs out of the economy? To emerge from bankruptcy, the “New Chrysler” must raise $2.3 billion to erase its debt with secured creditors. The four largest of these—JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs—have so far collected over $95 billion in government bailout money.

Many of these dealerships have been in the family for three and four generations, and their customers have been with them almost as long. In many showrooms the tears began to flow as UPS delivered the bad news.

Now Chrysler dealers are scrambling to find customers for their inventory and to get other franchises to buy up what they don’t sell. Because they purchase products in advance with borrowed funds, they must sell all their stock and sell it above cost to make up for the interest paid. Come June 10, many will be without a source of income and mired in debts. Where will they find work? What will the salespeople do for work?

Mechanics are highly skilled. Many began their careers as adolescents; fixing cars is all they know. Like the glass cutters at Waterford Crystal in Ireland, they have only one trade to sell. Where will all of them find work?

People will still need to get their cars repaired. Mechanics at the remaining shops will have to pick up the slack by working longer and harder. How many will be injured, even fatally, as a result?

In Ohio and Michigan, where Chrysler is closing some 80 shops, auto companies have driven unemployment rates to well above average. Auto parts supplier firms are going under. Arcelor-Mittal, the world’s largest steel company, has idled its Cleveland works along with mills all over the world. All over the Midwest cities and states are imposing massive budget cuts.

The unions should be screaming bloody murder!

All the workers are feeling tremendous pain and anger, casualties of a capitalist crisis of overproduction they did not create. They need to find one another. They need a movement around the slogan “A job is a right.”
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Martha Grevatt ([e-mail]) has worked at a Chrysler plant in Twinsburg, Ohio, for 22 years and is currently laid off.


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SOURCE SITE
http://www.workers.org/2009/us/auto_barons_0528/