Economic Mission for Congress: To Save Auto, Build Rail
by Richard Freeman
“Every GM plant in the United States is capable of retooling for whatever is needed to be produced,” said a United Auto Workers (UAW) official at General Motors’ Mansfield, Ohio plant, discussing Lyndon LaRouche’s call for emergency government action to re-tool the American auto sector— which is being dismantled at break-neck speed. Discussion with half a dozen skilled auto workers and engineers during the past month indicates that they understand the necessity of preserving the auto sector’s advanced machine-tool capabili- ty, and provide an unique insight into how the retooling process actually functions. They also reflected the spirit of progress and willingness to fight, essential to save the auto sector.
The Decimation of General Motors’ Hourly Workforce in America
(Number of Workers)
“I would like to work with Mr. LaRouche in figuring how we can re-tool, because this would save jobs, and the plant could produce some good things,” said an official representing workers at several plants of Delphi, the largest auto parts pro- ducer in the world.
The urgency of timely, forceful action is underscored by the fact that GM may not even survive in its current form until the end of the Summer. Possessing $301 billion in debt, its credit rated by Standard and Poors at “BBB-, negative,” inches above junk bond status—GM teeters on the brink of bank- ruptcy. It has already permanently closed two plants this year, and has either classified, or is close to classifying three addi- tional plants as “indefinitely idled”—shut, producing nothing; the workers are paid 95% of their wages; up for permanent shutdown when the GM-UAW contract, which prohibits the permanent closing of these plants, expires in 2007. On April 20, Ford Motor Company Chief Financial Officer Don Leclair announced, “We have more capacity than we need.” He indi- cated that Ford is looking outside for “low-cost manufacturing opportunities,” such as in China. Delphi has indicated that it may close or sell 12 of its 23 U.S. plants, some as early as this Summer.
The City of London and Wall Street banks are demand- ing the break-up of GM. In April, Deutsche Bank analysts Rod Lache and Michael Heifler released a report “predict- ing” that GM will likely be forced to undertake a major restructuring that could mean the closure of four assembly
Sources: General Motors; EIR.
plants and the elimination of 20-30,000 jobs in North America. They also called for sharp cuts in auto workers’ health benefits.
To insure the United States’ physical-economic survival, LaRouche, in his April 13 “Emergency Action by the Senate” proposal (EIR, April 22), called for government action to re- tool the advanced machine-tool design capacity, and to rede- ploy the productive labor force of GM and the auto sector in general. The converted portion of the sector would produce goods to reconstruct America, with capital goods for an inven- tory of urgently needed infrastructure projects, including high- speed rail and magnetically levitated train systems, as we will see below.
May 6, 2005