Nearly a thousand workers at the Chicago-based apparel firm Hart Schaffner & Marx, or Hartmarx, recently voted to “sit in” to save their jobs in an effort to prevent Wells Fargo from liquidating the factories.
In December, at the Republic Windows and Doors factory in Chicago, workers occupied the factory floor after the plant’s owners gave employees just three days’ notice of the plant’s closure. The workers ended their six-day occupation after winning a settlement securing the reopening of the plant under new management.
The crisis in the financial sector is not being solved, it’s being moved. A private-sector crisis is being transformed into a public-sector crisis, in the sense of the huge deficit that’s being left behind because of this bailout, which isn’t even doing what it’s supposed to be doing in terms of restoring credit and fixing the real economy.
So the price of this is—if it isn’t fixed, is going to be paid in cutbacks to healthcare, to Social Security. we haven’t felt the full shock yet. how this transfer of wealth is going to be paid for down the road in terms of the meager social services that Americans get in exchange for their tax dollars.
what Obama articulated so well is the fact that people realize that what’s good for Wall Street isn’t necessarily good for Main Street. And he said, we’ve had this top-down approach, giving more and more to people at the top, waiting for it to trickle down, and he promised that that would change.
Quite the contrary. What’s actually happened is that homes, jobs have been sacrificed in order to stabilize the financial sector.
If this, “works”—and, of course, that’s up for debate, and we have some very respected economists, like Joseph Stiglitz and Paul Krugman, who have said very clearly that they don’t even think this is going to save the financial sector, that we don’t—we haven’t even addressed the depth of that crisis, because we don’t even know the extent of the toxic debts. But even if it does work, even if we suspend disbelief and believe that it does work, this is the new normal is that the banks are being saved on the backs of union workers, on the backs of what’s left of the manufacturing sector, on the backs of homeowners. And so, what becomes the new normal after the crisis is an even more deeply divided country, an even more de-industrialized country.
The Service Employees International Union, SEIU, launch this huge corporate campaign against Bank of America to get the union and citizen groups to get involved and trying a shareholder revolt to remove Ken Lewis.
It is really important for the labor movement to talk about the injustice of the bailout, to do a huge amount of popular education. But it’s less about changing the CEO at the top and more about highlighting the incredible double standards. And that was why the Republic Windows and Doors occupation became such a—not just a national symbol, but an international symbol, because the workers in that factory, with their union leadership at UE, which is a smaller, very democratic union, decided that they were not just going to highlight the actions of their bosses, the owners of their factory, but the actions of Bank of America, in the fact that they had gotten bailout money and that they had refused a line of credit.
The country in an—outraged over the fact that so much taxpayer money had gone to these banks, in the name of increasing credit, and then they’re finding out that the banks aren’t actually lending. But here you have this very concrete case where the banks didn’t lend to a workplace that needed it, the workers were paying the price, and so here you had the sort of injustice, the double standards of the bailout, and their slogan, “You got bailed out; we got sold out,” in microcosm.
We have this illusion that when you change the CEO, then something deep is happening. And that becomes almost synonymous with re-regulation, which is what we really need in the financial sector. And if we think back to the ’30s, in FDR’s first hundred days, he got Glass-Steagall passed. We’ve seen no serious re-regulation of the financial sector. And so, when we just focus on changing the leadership and that kind of shareholder activism, so we have the illusion that there is a sort of real re-regulation going on in the financial sector, and it’s just not happening. And that’s what we need the labor movement to be saying.
One of the biggest insolvencies that was revealed was the financing arm of GM, GMAC, which has an $11 billion hole in its balance sheet, which the public is going to backstop, and this is what’s not being told—GM, the credit arm, and the Ford credit arm, in different degrees, and Chrysler’s, too, were gambling in derivatives, because there were super profits to be made when the bubble was being inflated. We have a lack of productive investment in the auto sector, which has been going on for three decades, while they’ve been financializing.
Immediately the Treasury Department is prepared to bail out the financial arm of GM, while GM and Chrysler are both being forced into bankruptcy. So, not only do you have the financialization of the sector and the bailouts for the financial arms, which dwarf the others, you also have the logic of the vulture capitalist at work in the auto sector.
Why are they being driven into bankruptcy? Why is there such a rush to go into the bankruptcy process? Ralph Nader, who’s been following the auto industry for a little while now, and he said that basically it’s about driving—it’s speculative capitalist logic to drive the companies down to get—to squeeze what can be squeezed—unemployment and layoffs always rise a stock price—to cash out on the bounce back.
If you look at the Auto Industry Task Force that President Obama has appointed, there’s no one from the auto sector there. Most of them are investment bankers, and they’re looking at this as a classic corporate restructuring, where you’re focused on the share price, where you’re focused on the bounce back, where you’re getting billions of dollars of public money. Jobs are just simply not the focus there. So the auto industry is subject to some of the same special treatment when it comes to the financing arms, but to a very different standard when you’re talking about the actual workers.
That’s why we’ve seen worker occupations in the auto sector, too. In Canada, there have been four plant occupations in the last four months, all of them plants that were closed suddenly and abruptly without the proper notification; severance packages, which are up in the air, maybe drifting away; and workers leaping to their feet in this moment and saying, “Wait a second. There’s trillions of dollars of public money, which are being—which is being funneled to certain kinds of businesses. Where’s our bailout?” That’s a powerful call.
Now we’re talking about single-payer healthcare, and why. It costs the Big Three $1,500 more per car in healthcare costs alone than their rivals, who are either working in countries like Canada that have universal healthcare or who aren’t subject to those costs, like the Japanese automakers. So they pay more for healthcare than they pay for steel. They can’t compete with the foreign companies. Because they’re from countries that have single payer.
One of the reasons that the auto industry has been so strong in Canada all these years is that, it’s so much cheaper for the Big Three to do production just over the river, in Windsor, from Detroit, because those healthcare costs are covered by society rather than by the companies.
So when we talk about the UAW owning half of the new Chrysler or half of the new GM, we’re not actually talking about worker ownership or, let alone, worker management. They’ll only get one seat on the board. What we’re talking about is the $20 billion, for instance, that GM owes to workers in healthcare obligations. They’re getting half of that in cash, and they’re getting half of that in stock of the next company.
So the union is gambling that the new company will do well enough that it will be able to honor the healthcare obligations to its own workers, which GM always had contractually, which the union exchanged and agreed to manage as part of decades of concessions. And now, it’s the United Auto Workers health fund which will own half of the new company. That’s a gamble, that the new company will be strong enough to pay for healthcare obligations, which should have been universalized a long time ago.
When you look at the way all of these various crises are interrelated, the healthcare crisis with the financial sector crisis with the manufacturing sector crisis, you could not imagine a moment which was more ripe for possibility of actually stepping back and going, “This whole thing is broken; how do we rebuild this in a way that makes sense?” There’s not going to be another moment like this.
That’s interesting that they’re not questioning nationalizing the debt of—and bailing out these banks and these other companies, like AIG, but they question nationalizing the cost of healthcare, which involves everyone.
as much as financial bailouts and financial crisis gets covered, we get unemployment numbers, we get fewer faces, but the crisis is people are losing their jobs in staggering numbers around the planet. And we’re starting to see the kind of pushback and the kind of worker fight back that we saw in Argentina after the economic crash there and that led to a whole new movement of worker-run businesses.
But in Argentina just in the last four months, they’ve had more worker takeovers of businesses in the last four months than they had in the previous four years. And this is the country which is the leader in worker takeover of the means of production.
In the UK, you have the Visteon auto plant, which was—there were three plants spun off from Ford in 2001. The workers there got six minutes’ notice that their workplaces were closing. The Republic Windows and Doors in Chicago, they got a few days. They got six minutes in Visteon. So, hundreds of workers did a sit-in on the roof of their plant. They were hard bargaining for about ten weeks. They ended up with a severance offer that was ten times what they were initially offered. So that’s a huge victory, although there’s still a lot of mistrust between the workers and the equity fund, which they’re negotiating with, so they’re not over there.
The famous Waterford Crystal plant in Ireland, by Wedgwood China, owned by Wedgwood China, was occupied by seven weeks earlier this year. It had been taken over by a US private equity firm. So there’s a lot going on in Europe around the foreign takeover of their production capacity.
In France, there’s been this wave of bossnappings, where workers have been holding their bosses hostage in the workplace after seven takeovers. When they held the chief executive of the plant in—the 3M plant in France, they brought him moules et frites, they brought him mussels and French fries for dinner. So there’s, there’s a level of civilization in the bossnappings there. But Caterpillar and Sony and Hewlett-Packard and other multinational corporations have faced this bossnapping technique.
And then we have in Poland, just this week, the largest coal coking producer in all of Europe. Thousands of workers bricked up the entrance to the company headquarters, because their wages had been cut.
And then we’ve seen Republic here in the United States and the Hartmarx story, this famous legendary suit maker that’s been in business more than 120 years. They made Obama’s suit that he wore on election night in Chicago. They made his tuxedo that he wore for some of the inauguration balls. And they are now facing bankruptcy at the hands of Wells Fargo, which has received $25 billion of public money.
So we see this dynamic playing out in different ways in different countries, but there’s no question that there’s an international wave of pushback. And the question is, where is it going? What forms will it take? And how do we talk about it in a way that formulates it as constructive alternatives to this economic crisis that are coming from below, because the bailouts have all been top-down?
Here we’re once again seeing just the lack of logic in the way the so-called bailout is being run, because there’s been—even though, the right is constantly calling the Obama administration socialist, what we’ve actually seen is an absolute unwillingness to use the power that they should be getting by bailing out the banks to restructure the sector. And, when you see these banks getting bailout money and not supporting factories that—at least in theory, this administration wants to protect manufacturing jobs. They ran a campaign saying we’re going to do this. Now, if you accepted your responsibility—the responsibility that comes from bailing out these banks, then you could actually have the power to direct those banks to lend money, to issue credit, in the interests of your other priorities, right? And so, that would be true for homeowners, and it would also be true for these factories that are being closed.
Obama administration is still, you know, in the grips of this laissez-faire ideology, even as they break the core rules by intervening in the economy in such dramatic fashion. They’re intervening, but at the same time they’re saying, “Well, we don’t want to run the banks,” So you have a situation like Citibank, which is worth, the last I checked, $21 billion on the books, but yet $45 billion of taxpayer money has gone in. So, by all rights, American taxpayers should own Citibank more than twice over, which would mean they could direct Citibank to issue credit in the interests of taxpayers, in the interests of the public. But clearly, that’s not happening, or these factories wouldn’t be closing.
Maybe the missing ingredient here is the media to be asking these critical questions. One of the incredible things about the Republic Windows and Doors story, didn’t happen in Argentina in the wave of takeovers there; it happened subsequently, as films like The Take and others made the rounds, and people learned about what was happening there. You get worker-led constructive alternatives, which are so dramatic and so different that then they get coverage. And then you have media being forced to take notice.
Discussion: Avi Lewis, Naomi Klein.
Avi Lewis, host of the new show Fault Lines on Al Jazeera English. He is the director of the documentary The Take about workers in Argentina taking over factories abandoned by their owners.
Naomi Klein, journalist and author of the books The Shock Doctrine: The Rise of Disaster Capitalism and No Logo. With her husband Avi Lewis, she made the documentary The Take about workers in Argentina taking over the factories abandoned by their owners.
– from democracynow.org