It looks like workers own Chrysler when you read the capitalist press. The WSJ announces that UAW retirees own the majority stake of the new Chrysler, 55%. Fiat will own 35%, the US government 8% and the Canadian government 2%.
The whole mess is hard to figure out as expected as those affected most by the deal are barred from negotiating it. But we can make some headway. I don’t know how many board members the new Chrysler will have in total but the new deal as reported in the Wall Street Journal gives the US government four, Fiat three, the UAW one and the Canadian government one.
So the capitalist class will have eight board members and the leadership of the UAW will have one despite the UAW having majority ownership of the company according to the figures. Rank and file auto workers and the working public are excluded.
In terms of capital injection, the working class wins that race as well. The US taxpayer is contributing $3.3 billion to the new plan. $2 billion of this will be to pay off moneylenders. The big business politicians have promised a further $4.76 billion of our money to keep the company running for several years. This figure is on top of $4 billion we lent Chrysler over the past few months. In their wisdom, the heads of the UAW forgave this debt in their negotiations with the moneylenders. This comes to a total of around $12 billion.
For this contribution a Union, or the retirees in that Union gets one board member to the capitalist class’ eight.
The Wall Street Journal refers to this as “empowering” the Union.
Apart from funding the deal which follows the billions of dollars in taxpayer bailouts for the banks, this “empowering” of the Union includes the elimination of many benefits won over the years. The workers will lose their cost of living allowance, Christmas bonus, performance bonus and two paid holidays. Retirees will also be empowered by losing benefits including vision and dental care. Some readers might find this a bit of a contradiction, but you have to think out of the box, as the employers say. Present auto-workers will be empowered to take second jobs at the AM/PM market and retirees will be forced out of retirement in to competing with them for these jobs. This will develop an entrepreneurial spirit and increase competition, not to mention lowering the cost of Labor power which is a good thing for capitalism------see.
It appears to me that some of the creditors that opposed the deal that led to Chrysler’s bankruptcy is part of an ongoing squabble between sections of the capitalist class. Up until the present crisis that broke ground at the end of 2007, there was an ongoing and open (within the serious journals of capitalism) war between the old established bourgeois and the private equity moneymen. Prior to the collapse the PE guys were referred to as The Masters of the Universe. Their massive profits earned them the envy of the more established old guard as their dealings for the most part took place outside the established exchanges that capitalism sets up to provide some law and order to their plunder. It is not unknown for them to turn on each other---robbing the working class is one thing but some honor among thieves must be imposed.
Consequently, private equity was a much more secretive arena, and used loopholes in the tax code that allowed it to keep more of its loot. Life was good. The top 25 hedge fund managers on Wall Street earned $15 billion in 2006 with two of them taking home more than $1 billion each and one lucky moneylender taking home $1.6 billion
The moneylenders are secured creditors they remind us. They have a contract and that contract is supposed to ensure that they get their pound of flesh first. Banks and hedge funds have been asked by the government to “release their contractual claims”. The hedge funds that refused and forced the company in to bankruptcy have been referred to as “speculators” by Obama and “Rogue hedge funds” and “Vultures” by John Dingell, a Michigan Democrat.
This is a sticky area for moneylenders as they see it as an encroachment on “private property rights” and they will drag it out in court, “In the bankruptcy code’s priority scheme, secured creditors are supposed to get paid before unsecured creditors such as employees.” Writes the WSJ.
“We lent money to Chrysler under a contract that gave us the first lien on its assets. There was no agreement that Union members or other unsecured creditors could jump ahead of us in claims” whines another moneylender, the head of a hedge fund.
But in the last analysis, the state will do what defends the capitalist system and advances the interests of the capitalist class as a whole; it is a capitalist state. Dingell’s attacks on speculators is an attempt to obscure the fact that worker’s living standards are being savaged by this plan as it stands and there is need to temper and contain the anger that exists in his state and US society in general. Michigan has one of the country’s highest unemployment rates.
The idea that workers own Chrysler is ridiculous no matter what their figures imply. We don’t own the banks and the surplus value created through the Labor process. We do not control the Labor process itself. It is important also that although we talk of taxpayer’s money and private money there is no difference. Capital is a collective product, is the product of collective Labor power in use. Would workers have allocated capital in the same way were we in command of it, in possession of it? Absolutely not.
It is painfully obvious that it is not workers that wrote the law that ensured a moneylender received his or her pound of flesh at the expense of worker’s livelihoods. The California constitution has written in to it that debts to money-lenders must be paid. It is not written in to the constitution that health care, education or work is guaranteed to people. We can surely learn much from these developments.
Another clear observation is that the people Obama is sending to fix the mess we’re in are the same people that caused it: Larry Summers, Timothy Geitner, and others. Obama’s two appointees to sort out the auto industry mess are Ron Bloom, who is an investment banker who went to work for the Steel worker’s Union. William Greider of the Nation Magazine is enamored with Mr. Bloom, “Ron Bloom has the sophistication of a Wall Street financier, but the head and heart of a labor guy”, he writes in the February issue. Bloom was an advisor to the USW president which shows how integrated the thinking of the capitalist class and the heads of organized Labor is “The public needs someone like this on the inside, sitting at the table with Treasury and White House officials, armed with a calculator and an independent mind.” adds Greider. This is the mind of the liberal speaking, seeking help from the nicer, kinder capitalists. The working class is this huge dumb mass that needs to be led. Yet Greider has confidence in this banker that no worker would exhibit, even a worker who chooses apathy over action.
The other Czar who Obama sent to sort out the mess “for us” is Steven Rattner He’s another moneylender and founder of a private equity firm. He was a journalist who found Wall Street more lucrative and joined Morgan Stanley. He also worked for Lazard as a General Partner becoming its deputy chairman and Deputy CEO. Rattner manages NYC mayor Michael Bloomberg's fortune estimated at $13 billion. That says it all right there. These are the same people who are responsible for the mess we’re in; deep down, every thinking worker knows this; and the evidence speaks for itself, it is profit that is being safeguarded---it is capital accumulation that is being protected, not worker’s livelihoods.
The auto industry is a transportation industry. Transportation in society should be a public service. The Chrysler plan negotiated by the government and moneylenders with the help of trade Union officials is what they call a “viable” plan. A plan that throws working people on to the welfare rolls is “viable” to the moneylenders.
The only viable plan for the auto industry from our point of view as workers is a plan that includes the public ownership of auto under workers control and management and the conversion of these powerful productive forces in to forces for the production of a mass transportation system that serves our needs rather than lining the pockets of investment bankers.
Only working people can introduce that plan.
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