GM: From Bail-Out To Bankruptcy In 2009

(In December 2008, a short time before the "U.S. Corporate Welfare State" used billions of dollars in public funds to help bail-out the General Motors [GM] corporate executives and their insitutional stockholders by investing in GM's worthless stock under the pretext of "preventing GM from going bankrupt and laying off UAW workers", I posted the following reference to GM's previous corporate welfare grants):

If GM, Ford and Chrysler end up getting a big corporate welfare grant from the “U.S. Corporate Welfare State” before they begin their new wave of 2009 layoffs of UAW members, it won’t be the first corporate welfare grant that the Big Three ever received. As Mark Zepezauer and Arthur Naiman noted in the 1996 edition of their book Take The Rich Off Welfare, in the 1990s the U.S. government gave “GM, Ford and Chrysler—whose combined 1994 profits were almost $14 billion--$333 million a year to develop more fuel-efficient cars;” yet “at the same time, the Big Three” propagandized “in favor of watered-down fuel-efficiency standards.” During the 1990s, Ford, GM and Chrysler also “each used accelerated depreciation to defer a billion dollars in tax payments,” according to the Take The Rich Off Welfare book.

The same book also recalled:

“The extent to which automobiles dominate our lives didn’t just happen by accident—at least part of it was the result of a criminal conspiracy. Back in the early 1930s, most people living in cities got around on electric streetcars. Concerned that this wasn’t the kind of environment in which they could sell a lot of buses, General Motors, using a series of front companies, began buying up streetcar systems, tearing out the tracks, buying buses from itself and then selling the new, polluting bus systems back to the cities—usually with contracts that prohibited purchases of `any new equipment using fuel or means of propulsion other than gas.’ Sometimes the contracts required that the new owners buy all their replacement buses from GM.

“…In 1949—after these companies had destroyed more than 100 streetcar systems in more than 45 cities, including New York, Los Angeles, Philadelphia, San Francisco, Oakland, Baltimore, St. Louis and Salt Lake City—GM, Chevron and Firestone were convicted of a criminal conspiracy to restrain trade…”

With regard to the most recent corporate welfare grant to the Big Three proposal, UAW Local 2334 President David Sole in Detroit recently wrote the following:

“Handing more money to the same auto bosses who got us into this mess won’t solve the problems the auto industry faces.

“…They will continue to try to eliminate jobs and cut wages and benefits. Their only concern is maximizing profits, which is what led them to concentrate on making SUVs and trucks domestically, while shipping production of fuel-efficient cars overseas…

“Since the auto bosses have brought the companies to the brink of ruin, the workers, their unions and the communities in which these factories are situated must assert their right to run the plants and replace the bloated, short-sighted executives and the big shareholders who kept them at the helm.

“Worker-community control of the Big Three is the only solution. Under worker-community control the demand for government funds to rebuild and retool the plants to make energy-efficient cars and mass transit equipment could rally wide support.”

(I also indicated in a December 2008 post why the Big Media Monopoly may have been pushing for having the "U.S. Corporate Welfare State" invest so much public tax money in an automobile corporation whose executives were driving the firm into bankruptcy, despite these GM executives' past record of business mismanagement and wasteful expenditures on executive salaries and advertising).

One reason the Big Media conglomerates in the United States might have wanted to see the Big Three transnational automobile companies get a big corporate welfare grant from the U.S. government is that GM, Daimler-Chrysler and Ford have, historically, been among the top buyers of advertising in the U.S. corporate media world. In 1999, for example, GM spent over $2.9 billion on advertising and was the Number 1 advertiser in the United States. That same year, the Number 3 advertiser in the U.S. was Daimler-Chrysler, which spent over $1.5 billion on advertising. And in 1999, Ford spent over $1.1 billion on advertising and was the Number 5 advertiser in the United States.

In 2007, GM spent over $3 billion on advertising and was the Number 4 advertiser in the U.S., while Ford spent over $2.5 billion on advertising and was the Number 6 advertiser in the United States. In addition, over $1.7 billion was spent on advertising by Chrysler, which was the Number 14 advertiser in the United States, according to Advertising Age magazine’s chart for 2007.

Do 700 UAW Staff Members Earn Over $100,000 Per Year?

Ironically, UAW officers and UAW staff in Michigan apparently earn a lot more per year than the average U.S. factory worker, the average U.S. office worker or the average U.S. grassroots anti-war/anti-corporate activist. According to an article by Ron French and Mike Wilkinson that appeared in the August 15, 2007 issue of the Detroit News:

“Nearly 700 UAW officers and staff in Michigan alone have a total compensation from the union that exceeds $100,000 according to U.S. Department of Labor data. That data doesn’t include other officials estimated in the hundreds, who are appointed to union jobs paid by the Big Three. They are benefit and safety representatives and low-level union officials who sometimes are paid for 12-hour days, seven days a week. Many make more than $100,000 a year.”

Perhaps that's why UAW President Ron Gettelfinger apparently hasn't been that eager to demand that the morally and economically bankrupt U.S. automobile industry be finally nationalized under democratic, automobile worker and working-class community control--before the Big Three begin another round of mass layoffs of UAW members in 2009 (in exchange for obtaining their recent corporate welfare grant from the Bush Administration's "U.S. Corporate Welfare State")?

Big Three Spent $7.2 Billion On Advertising In 2007

One reason the Big Media conglomerates in the United States might have wanted to see the Big Three transnational automobile companies get a big corporate welfare grant from the U.S. government is that GM, Daimler-Chrysler and Ford have, historically, been among the top buyers of advertising in the U.S. corporate media world. In 1999, for example, GM spent over $2.9 billion on advertising and was the Number 1 advertiser in the United States. That same year, the Number 3 advertiser in the U.S. was Daimler-Chrysler, which spent over $1.5 billion on advertising. And in 1999, Ford spent over $1.1 billion on advertising and was the Number 5 advertiser in the United States.

In 2007, GM spent over $3 billion on advertising and was the Number 4 advertiser in the U.S., while Ford spent over $2.5 billion on advertising and was the Number 6 advertiser in the United States. In addition, over $1.7 billion was spent on advertising by Chrysler, which was the Number 14 advertiser in the United States, according to Advertising Age magazine’s chart for 2007.

Recalling Big Three's 1990s Corporate Welfare Grant

If GM, Ford and Chrysler end up getting a big corporate welfare grant from the “U.S. Corporate Welfare State” before they begin their new wave of 2009 layoffs of UAW members, it won’t be the first corporate welfare grant that the Big Three ever received. As Mark Zepezauer and Arthur Naiman noted in the 1996 edition of their book Take The Rich Off Welfare, in the 1990s the U.S. government gave “GM, Ford and Chrysler—whose combined 1994 profits were almost $14 billion--$333 million a year to develop more fuel-efficient cars;” yet “at the same time, the Big Three” propagandized “in favor of watered-down fuel-efficiency standards.” During the 1990s, Ford, GM and Chrysler also “each used accelerated depreciation to defer a billion dollars in tax payments,” according to the Take The Rich Off Welfare book.

The same book also recalled:

“The extent to which automobiles dominate our lives didn’t just happen by accident—at least part of it was the result of a criminal conspiracy. Back in the early 1930s, most people living in cities got around on electric streetcars. Concerned that this wasn’t the kind of environment in which they could sell a lot of buses, General Motors, using a series of front companies, began buying up streetcar systems, tearing out the tracks, buying buses from itself and then selling the new, polluting bus systems back to the cities—usually with contracts that prohibited purchases of `any new equipment using fuel or means of propulsion other than gas.’ Sometimes the contracts required that the new owners buy all their replacement buses from GM.

“…In 1949—after these companies had destroyed more than 100 streetcar systems in more than 45 cities, including New York, Los Angeles, Philadelphia, San Francisco, Oakland, Baltimore, St. Louis and Salt Lake City—GM, Chevron and Firestone were convicted of a criminal conspiracy to restrain trade…”

With regard to the most recent corporate welfare grant to the Big Three proposal, UAW Local 2334 President David Sole in Detroit recently wrote the following:

“Handing more money to the same auto bosses who got us into this mess won’t solve the problems the auto industry faces.

“…They will continue to try to eliminate jobs and cut wages and benefits. Their only concern is maximizing profits, which is what led them to concentrate on making SUVs and trucks domestically, while shipping production of fuel-efficient cars overseas…

“Since the auto bosses have brought the companies to the brink of ruin, the workers, their unions and the communities in which these factories are situated must assert their right to run the plants and replace the bloated, short-sighted executives and the big shareholders who kept them at the helm.

“Worker-community control of the Big Three is the only solution. Under worker-community control the demand for government funds to rebuild and retool the plants to make energy-efficient cars and mass transit equipment could rally wide support.”

Who Rules GM?

GM is famous for being one of the world’s largest transnational industrial corporations, for laying off its U.S. factory workers before it lays off its cheaper labor in its factories outside the Untied States, for manufacturing tanks for both the German Army and the U.S. Army during World War II, and for being so mismanaged that it can’t compete successfully with Japanese Establishment-owned automobile manufacturers. So what’s good for General Motors is not necessarily what’s good for most people in the United States.

But as the GM web sitereveals, in recent years GM’s board of directors has included the following U.S. Establishment businesspeople:

1. Morgan Stanley, North Carolina Mutual Life Insurance, Cousins Properties and Erskine Bowles & Co. Director, Carousel Capital Senior Advisor, University of North Carolina President and former Clinton White House Chief of Staff Erskine Bowles.

2. Goldman Sachs Group Director, former Sara Lee Chairman/CEO and University of Chicago and Art Institute of Chicago Trustee John Bryan.

3. Merrill Lynch, Home Depot, AMR Director and Flagler Development CEO Armando Codina.

4.Coca Cola Chairman/CEO, former Sun Trust Banks Director and Center for Strategic International Studies and U.S. Council for International Business Trustee E. Neville Isdell.

5. Deutsche Bank Advisory Board Member and former Compaq Computer CEO Eckhard Pfeiffer.

6. BP and Union Pacific Director, former Alliance Energy Chairman/CEO, University System of Georgia Chancellor and University of Chicago and Carnegie Mellon University Trustee Erroll Davis Jr.

7. Harris Corporation, Home Depot, Catalyst Director, former Pfizer Vice-chairman, Pfizer Foundation Chairman, Essex Woodlands Health Ventures Senior Adviser and University of Chicago Trustee Karen Katen.

8. Former Northrup Grumman Chairman, Fluor, Avery Denison and Mannkind Director, MIT Lincoln Library Advisory Board Member, California Institute of Technology and Haynes Foundation Trustee Kent Kresa.

9. E.I. DuPont de Nemours Executive Vice-President and Tufts University Trustee Ellen Kullman.

10. Former Ernst & Young Chairman/CEO and Loew’s, Discover Financial Services and Henry Schein Director Philip Laskawy.

11. Former GE Fleet Services CEO and Ceridian Chairman/CEO Kathryn Marinello.

12. Kohlberg Kravis Roberts Senior Advisor and former Eastman Kodak Chairman/CEO George Fisher.

13. Former Astra Zeneca PLC-UK Chairman Percy Barnevik.

14. Former GM de Brasil President, Duke University Trustee and Harvard Business School Dean’s Advisory Board Member G. Richard Wagoner, Jr.

Similarly, in the early 1990s, GM’s board of directors included the following U.S. Establishment businesspeople:

1. Citibank/Citicorp, PepsiCo and Johnson & Johnson Director Roger Smith.

2. Chevron/Gulf Oil, Bechtel and Boeing Director George Shultz.

3. J.P. Morgan & Co./Morgan Guaranty Trust Director Dennis Weatherstone.

4. Citibank/Citicorp, AT & T, Metropolitan Life Insurance Director and Rockefeller Brothers Fund Trustee James Evans.

5. National Bank of Detroit/NBD Bancorp and American Airlines Director Charles Fisher III.

6. Merck & Co. and NCR Corp. Director John Horan.

7. Marriott Corp. Director J. Willard Marriott Jr.

8. Chase Manhattan Bank/Chase Manhattan Corp., International Paper Co., and Pfizer Inc. Director Edmund Pratt Jr.

9. J.P. Morgan & Co./Morgan Guaranty Trust and Procter & Gamble Director John Smale.

10. AT&T Director Thomas Wyman.

So don’t be surprised if the corporate folks who still rule the privately-owned, not yet-nationalized, GM eventually get a big corporate welfare grant from the U.S. Establishment’s federal government—before GM’s rulers once again start laying-off more of its U.S. factory workers in 2009 who are members of the UAW.

(Downtown 3/11/92)