Posts Tagged ‘cars’


This past Tuesday, officials of AM General celebrated the production of a Mercedes-Benz sport utility vehicle for export to China in a factory in Mishawaka, Indiana that once built Hummer S.U.V.s for General Motors.

While a number of American auto plants export their products around the world, the factory is believed to be the only plant in the United States that ships its entire volume for sale in the Chinese market. . .

“We are making German luxury vehicles in Indiana for export to China, and doing it with workers at the oldest U.A.W. local in the nation,” said Howard B. Glaser, head of AM General’s commercial division. “You basically have the entire global economy under one roof.”


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That’s right: even as the United States is producing more cars than ever, U.S. (and Canadian) workers have never made so few of the parts that go into making those cars.

As the Wall Street Journal explains, this trend casts a long shadow over the much-vaunted comeback of U.S. car manufacturing.

As the inflow of low-cost foreign parts accelerates, wages at the entry level are drifting away from the generous compensation packages that made car-factory jobs the prize of American manufacturing.

At an American Axle & Manufacturing Holdings Inc. car-parts factory in Three Rivers, some new hires are paid as little as about $10 an hour, roughly equivalent to what the local Wal-Mart will pay. John Childers, a 38-year-old assembly-line stocker, said he is grateful for the job but finds it tough to get by on the money he and his fiancée make at the plant.

“Lower class is what we are,” he says. “Let’s be honest.”


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Workers at a Ford assembly plant gather during an emergency meeting with the plant management in Genk

It just so happens I’m showing Michael Moore’s Roger & Me in class this week.*

Now we have the decision by Stephen Odell, chief executive of Ford of Europe, to close a plant in Genk, Belgium. The New York Times [ht: sm] decides to tell a story of courageous Ford against entrenched politicians and unions.

Ford is one of the few companies to brave the fierce resistance of politicians and Europe’s powerful unions as it tries to emulate the brutal downsizing that carmakers in the United States have done — and that subsequently helped make possible the rebound now under way in the American car market.

And the quote from Odell come have come straight from the mouth of GM’s Roger Smith:

“Ford did not take this decision lightly,” Stephen Odell, chief executive of Ford of Europe, said in a telephone interview Monday. “We understand that it affects people and their families.” But, he said, “we had to do it to positively influence the company going forward.”

But the rest of the story does, in fact, leak through at the end:

Yet for every factory that the industry might consider an albatross, there is a community that faces economic devastation if production shuts down. Nowhere is that more true than in Genk, at the eastern end of Belgium in the province of Limburg, the least prosperous region of the country’s Dutch-speaking north.

In Genk, a city of 65,000 people, many of them descendants of Italians, Turks or Moroccans who came decades ago to dig coal, an estimated 10,000 jobs will be lost at the end of next year when Ford closes the factory. That number includes not only Ford workers but also the businesses that depend on the plant, from big parts suppliers to the mom-and-pop shops.

Marianna Musolino, co-owner of a French fry restaurant in a neighborhood where many Ford workers live, said customers had begun scrimping on orders. “They didn’t take mayonnaise, which is rare, but it saved them 50 cents,” Ms. Musolino said. “Weird things like that.”

Another business already feeling the pain is Bewel, a nonprofit organization in the neighboring town of Diepenbeek that provides paid employment to mentally handicapped people. Until recently, Bewel operated a laundry that cleaned truckloads of protective clothing used by Ford.

But, realizing the work would soon dry up, Patrick Nelissen, managing director of Bewel, gave the Ford concession to a commercial laundry less dependent on Ford. That firm agreed to hire some of the handicapped workers.

Last week, Mr. Nelissen showed a visitor around a deserted building containing rows of idle commercial washers and driers. Stepping around a puddle, he wondered aloud how he was going to recover the 1 million euros, or $1.35 million, he had invested in machines shortly before Ford announced the shutdown. “Nobody needs this kind of machinery,” he said.

Mr. Nelissen said he understood Ford’s predicament. But the prevailing view in Genk is that Ford reneged on promises to build the next generation of Mondeos in the city. Residents knew there would be job cuts, but not a closing of the plant.

“A year ago they gave their word” that Genk would build the next Mondeo, said Wim Dries, the mayor. “Then they said, ‘The economy has changed. We have to close it.’ It was like a bomb going off.”

I wonder if a Belgian Michael Moore will be there to try to chase down Stephen and film the final car going off the line.


*If you haven’t seen it (and you should), it’s a documentary (his first and, in my view, still best) of Moore’s pursuit of General Motors CEO Roger Smith, to confront him about the devastating effects on Flint, Michigan caused by the series of decisions by GM to downsize production and close plants in that city. After the credits, the film displays the message, “This film cannot be shown within the city of Flint. All the movie theatres have closed.”

Is Mexico “going up in the world”?

It is according to the Economist, which gives scant attention to electoral fraud and to the student movement #YoSoy132 but showers praise on the improving environment for foreign investment.

As Adam David Morton explains,

reading like some sort of advertisement, Mexico is regarded by the Economist to be on “the rise”, especially as it’s labour costs have shifted closer to China. In 2000 it cost just $0.32 an hour to employ a Chinese manufacturing worker, compared to $1.51 in Mexico. By 2011, the cost of Chinese labour had quintupled to $1.63, compared to $2.10 in Mexico. This means that the minimum wage in Shanghai and Qingdao is now higher than in Mexico City and Monterrey with cheaper transportation costs, favourable tariffs, opening financial credit, and a looming oil boom adding to Mexico’s attraction for foreign capital. With plants in Cuernavaca and Aguascalientes, the Japanese car giant Nissan will soon be producing a car nearly every 30 seconds in Mexico. Meanwhile, in nearby Guanajuato, Mazda and Honda are building factories and in Puebla Audi is constructing a $1.3 billion plant. Mexico is the world’s fourth-biggest auto exporter soon to be producing some 4 million vehicles.

Lurking behind this glitzy façade, though, is the approval of radical labour law reforms that enables firms to hire and fire workers more easily, that aims to shorten labour disputes, and converts the minimum wage from an hourly to a daily rate. Productivity and competitiveness might increase but even though a full attack on unions was offset, labour will be exploited to the full in order to fulfil such “modernisation”. As detailed in The New York Times, there is ‘a strong push to “modernise” trade deals, speed up or add new crossings at the border for commerce, court foreign investment to take advantage of vast, newly discovered shale gas fields near the United States border and generate more quality jobs’.

Yet the bigger picture here is linked to the earlier moves by Calderón to privatise the electrical system and energy sectors in Mexico as an extension of neoliberalisation, which gained increased opposition from the Mexican Electricians’ Union (SME) and factions within the General Union of Mexican Electrical Workers (SUTERM). Such labour activism was at the centre of forming the Front Against Privatisation of the petroleum and electric power industries in order to articulate a more significant demonstration of wider democratic struggle in Mexico. This focus became highly significant following Calderón’s decree to coercively liquidate the state-owned Compañía Luz y Fuerza del Centro (LyFC), in October 2009, seize its facilities with federal police, and sacking 44,000 workers of the militant SME in an attempt to weaken the power of organised labour and establish a new round of investor growth in the energy sector, while leading to general strike mobilisations by the SME facing a struggle for its survival. Further energy reform is now on the agenda in Mexico with Pemex, the state-run oil and gas company, targeted for privatisation in order to unleash exploration of the 30 billion barrels of oil under the Gulf of Mexico and compete with Brazil’s Petrobras.

The sanguine view of the Economist – once dismissed quite nicely by Nikolai Bukharin as ‘the organ of the English financiers’ – is that Mexico is “going up” as its economy grows faster than Brazil’s in both 2011 and 2012.

Meanwhile, the price will be paid by ever more super-exploited Mexican labour backed up by the armour of coercion in terms of vote rigging, authoritarianism, and corruption. Whether the #YoSoy132 democratising movement and wider labour struggles can challenge this and reclaim spaces for anti-capitalist struggle and “unite the contingent” remains to be seen.

And one last note: while Bukharin was certainly correct in his time, the Economist (as Martha Starr has shown) has today become the organ of the U.S. global business elite.

Suicides and luxury cars

Posted: 29 December 2010 in Uncategorized
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Only under capitalism are suicides closely related to the purchase of luxury cars.

You have to look to India to see the relationship. There, according to P. Sainath, 17,368 farmers killed themselves over the course of 2009—while, in October, businessmen from Aurangabad in the Marathwada region of the state of Maharashtra bought 150 Mercedes Benz luxury cars. The connection?

The value of the Mercedes deal equals the annual income of tens of thousands of rural Marathwada households. And countless farmers in Maharashtra struggle to get any loans from formal sources of credit. It took roughly a decade and tens of thousands of suicides before Indian farmers got loans at 7 per cent interest — many, in theory only. Prior to 2005, those who got any bank loans at all shelled out between 9 and 12 per cent. Several were forced to take non-agricultural loans at even higher rates of interest. Buy a Mercedes, pay 7 per cent interest. Buy a tractor, pay 12 per cent. The hallowed micro-finance institutions (MFIs) do worse. There, it’s smaller sums at interest rates of between 24 and 36 per cent or higher.

Farming households, starved of credit to purchase agricultural inputs, have had to turn to moneylenders, loan sharks, and other “non-official” sources of credit. And, with crashing commodity prices, and increasing levels of debt they have no hope of repaying, farmers have been committing suicide in record numbers. The total farm suicides since 1997 have now reached over 2 million.

Meanwhile, in November, a new group of 101 businessmen from Aurangabad made the decision to buy BMW cars.