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at least 21,000 job cuts...closure of 14 plants and warehouses in eight states....the company has announced its intention to dump franchise agreements with 2,300 dealerships by the end of next year. Many of these will be forced to close, eliminating as many as 100,000 jobs in all 50 states...
The gutting of GM...will send shock waves through the economy, cascading into more layoffs at parts suppliers and financial ruin for thousands of small businesses.
The bankruptcy will immediately result in state and local cuts in social services, health care and education, with city and state workers targeted for layoffs, wages cuts and other concessions. It will accelerate the foreclosure crisis and further drive down home prices, as tens of thousands of workers are no longer able to meet their mortgage payments.
... Corporations will take the concessions imposed on auto workers as a signal for similar measures against their own workers.
Michigan, which already has the highest unemployment rate in the nation at 12.9 percent, will bear the brunt of the closures, with 42 percent of all national GM layoffs taking place there. Nearly 9,000 jobs will be lost in Michigan from Monday’s announced plant closures.
It is estimated that since 2000, Michigan has lost 17 percent of its jobs—about three quarters of a million in all—as a direct result of the crisis in the auto industry. Now the state anticipates 520,000 job losses this year and next.
The consequences for the state’s limited social welfare system will be disastrous. According to one estimate, Michigan could lose an additional $18.3 billion in income. It already faces a $3 billion two-year budget shortfall, and officials recently revised downward their revenue estimate for the 2010 fiscal year by $1.7 billion, calling for an across-the-board spending cut of 8 percent.
Michigan has already carried out $300 million in budget cuts for the current fiscal year.
The loss of GM-related tax revenue will result in layoffs for county workers and sharp cuts in social programs, said Bob Daddow, Oakland County’s deputy executive. “I will be going to war,” Daddow told the Detroit News. “We will need to make cuts in all departments. We have been doing these cuts all along...but the worst is yet to come on governmental revenues.”
The closure of the GM Truck and Bus plant will deepen the social crisis in impoverished Pontiac, Michigan. About 1,100 workers will lose their jobs, and the city will lose 20 percent of its current tax base, or $10 million, said Fred Leeb, the city’s emergency financial manager. Leeb made clear that Pontiac’s working class would pay the price for the shutdown. “We fear that we are going to have to cut even more deeply,” he told the Detroit News. “And there will be concessions to ask from the (city) unions.”
The collapse of the Big Three has brought with it a sharp decline in funding for the arts and culture. The General Motors Foundation, which contributed $31.4 million to the arts in 2007, has told many art and cultural organizations, “mostly in Detroit,” not to count on any contributions this year, the Financial Times reported last week. Toledo, Ohio, recently announced that its three-day jazz festival, the Art Tatum Jazz Heritage Festival, would be cancelled this year after Chrysler said it would no longer provide $100,000 in annual funding.
In the face of this mounting social crisis, President Barack Obama has offered little more than rhetorical palliatives, telling workers that their “sacrifices” will ensure the future for coming generations. But for the auto workers’ children, the future foretells poverty amidst a crumbling social safety net...
GM worker in Ypsilanti, MichiganThe World Socialist Web Site spoke with a small number of workers, most of whom were recently retired, who came to the meeting to demonstrate against the closure of the Willow Run plant. Corky, a GM worker with 12 years, said, “We thought we were going to stay open until 2010. On Friday when we walked out of work we thought we would be coming back in mid-July. I got a call from a fellow worker that night saying we were no longer going to work there.
“It’s unfair. We’ve made enough sacrifices. I’m tired of it. This was my seventh GM plant. For two-and-a-half years I was driving down to Toledo, Ohio to work, even when gas was $4 a gallon. I’ve made sacrifices. My dad is a retired GM worker and his benefits are being cut. I put my blood and sweat into every transmission that comes off the line.
“Yesterday when they announced the bankruptcy and plant closing I was all tears and emotions. Now I’m angry.”
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