Friday, October 2, 2015

VW Nightmare Continues

By Richard Mellor
Afscme Local 444, retired

It’s hard to tell exactly where the crisis with Germany’s largest auto manufacturer will end up but one thing is certain, it is an immense problem.

I commented on this earlier
and what we do know is that the affects are rippling through the global marketplace and we are less than one week away form the October 7th deadline that Germany’s motor authority has given VW to come up with a technological solution to the problem.

Adding fuel to the fire, the German newspaper Bild am Sonntag reported earlier this week that the German auto parts supplier Robert Bosch that apparently delivered the infamous software to the company-----for test purposes-----warned that its use would be illegal. According to the media, it did this in writing. If this is the case, it deepens the hole VW has to climb out of.

The bad news keeps coming. It also turns out that the European emissions testing procedures are a little suspect to say the least; “…car makers pay the very firms that test and certify their vehicles” the Wall Street Journal reported yesterday. (10-13-15). The vehicles the automakers send for testing are “stripped down prototypes”.  Car companies “never submitted random vehicles drawn from the assembly lines for testing,” the Journal adds.
The whole testing procedure is corrupt of course. “A car maker is free to choose who does the test, and the testing houses are commercial companies who rely on the car makers.” says Jos Dings, the head of a Brussels based environmental group. “There is no incentive to be tough on car makers.”

The fallout goes beyond the assembly line. Most of these auto companies have what they call finance arms, by that they mean moneylending outfits. These are used to boost their sales by providing loans to buyers. VW’s financing outfit (VW Financial Services) generated 14% of the company’s first half net profit in 2015 holding 12.6 million contracts, 15% of them in North America and 70% in Europe. The Finance arm has already announced a hiring freeze for the rest of the year and VW has also cut one shift per week at its Salzgitter factory, ironically added to meet high demand.

As I pointed out last week, the company lost about a third of its value and

credit ratings companies are not touting good news which means VW’s borrowing costs could increase as well.  What’s more, the clean efficient German diesel, an engine primarily used in bigger vehicles like trucks but made popular for autos by German engineering, accounts for more than 50% of passenger autos in Europe so far this year but has now become suspect and it is quite possible there will be a shift from diesel in the future.

That a global giant like VW, despite the reputation, would cheat on emission tests should come as no surprise to anyone.  Nor should it that the relationship between the manufacturers and the testers is as cozy as it is without resulting in such criminal activity. We are used to it here in the US where politicians who receive hundreds of millions from corporate lobbyists tell us that there’s no conflict of interest, that it “doesn’t  affect my decisions”. Or the doctors that receive money form big Pharma and spin the same tale. No one believes them. People cynically accept it, for now.

I pointed out with regard to the BP spill in the Gulf of Mexico
, a catastrophe indeed, that the US government regulators allowed the energy industry to write their own rules for deep water drilling. Apart form the environmental catastrophe this episode brought us, it led to the deaths of 11 workers.  The West Texas disaster, the numerous chemical disasters and chemical spill disasters like the one in West Virginia were all market driven.

It is important to note in this instance that the European Union has rules for emission tests but does not have the means or an authority like the US EPA to, as the WSJ puts it, “…perform spot checks that can catch abuse.”   VW, has put some $7 billion aside in the immediate aftermath of the scandal but monetary amounts as high as $18 billion have been tossed around when EPA fines and class actions suits against VW by buyers are included.

The EPA is the arch-enemy of the champions of the free market. Some backward right wing workers, fooled by the media spin-doctors even consider it a communistic parasite in the belly of the beast.  Despite the EPA’s weakness and its inevitable failure to protect our environment from the ravages of capitalism, we’d be worse off without it.

The VW crisis stresses the fact that we live in a world economy and a world market. Even though the majority of the autos concerned here are in Europe the crisis in a major global corporation extends far beyond steel and rubber in to the stock exchanges of the world, the financial activity of nations and the pockets and homes of working people.

The fact that the origins of this investigation arose in the US has not been ignored by some Germans and German politicians who are hinting that it is no accident that one of the US auto manufacturing’s greatest global rivals is taking such a huge hit.

I cannot see the German or global bourgeois not ensuring that VW recovers from this crisis. There is too much at stake, money and in particular jobs. Social unrest must be averted, jobs must be preserved, especially German jobs. The cozy relationship German capitalism has with the trade union leadership at IG Metal must remain.

This is yet another turn in the crisis ridden global capitalist system. We are witnessing the slow decline of the Chinese economy. The never ending brutal regional wars and complete savagery of the life in the Middle East brought about by US foreign policy. The ongoing environmental degradation, the shutting down of the US stock exchange in the recent past due, according to reports some technical malfunction. It’s non -stop.

And we witness daily the mass slaughter here in the US. Alienated youth consumed with despair, devoid of identity and purpose and bombarded with propaganda that encourages never ending consumption turning everything including our bodies and the air we breathe in to a commodity for sale, finding purpose in destroying the lives of others along with   their own, all for some notoriety, some recognition even in death.

All these crises are connected. As for something as mundane as auto production, or what is actually, the production of mass transit, a poor and inefficient form of mass transit, the only way what we are witnessing at VW can be prevented is though public ownership of these important aspects of social production.

In the UK the recently elected leader of the Labor Party has called for the re-nationalization of the railways, a major aspect of public transportation.  This is a positive step, but it is only a half step. It is public ownership within the framework of a capitalist economy and political structure. Capital and the levers of power is still in private hands.

The workers at VW or any other corporation, as aspects of production or as consumers, do not own, mange or control the workplace, what we produce, when and how we produce it.

Through workplace committees, community committees organized structures in different regions and areas, linked nation to nation workers can run society, can govern and produce the necessities of life based on social need as opposed to profits for the minority of faceless individuals that presently own and control the forces of production.

This is not utopia, it’s the only way to a humane future, or more accurately, any future at all----a world federation of democratic socialist states.

Note: VW has set up a website for owners of affected vehicles, people like this writer.

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