Anticipating the General Motors bankruptcy filing and the possibility of thousands losing their jobs to other parts of the country and the world, the Rev. Jesse Jackson led a march to Lansing, the state capitol of Michigan, Monday afternoon. According to a Jackson spokesperson, the march is part of the “Reinvest in America, Keep the Dream Alive” rally. U.S. Sen. Debbie Stabenow was also among those marching to encourage lawmakers to keep jobs and manufacturing in the United States.
Meanwhile, Monday morning, in New York City, GM, an American business giant and one of the largest corporations in the world, filed for Chapter 11 bankruptcy protection, jeopardizing the jobs of thousands of American workers.
“The filing for bankruptcy protection paves the way for transformation from an old GM to the beginning of a new GM,” the president said in a briefing at the White House. “I want to assure those who are planning to buy a GM car that their warranties will be saved and guaranteed by the government. The deal is tough but fair.” And he said the plan would put the auto company on the “path to recovery.”
How long this brief “nationalization”–as some are calling it, along with insinuations that GM means “Government Motors”– will last is anybody’s guess, but for certain, its impact on GM workers will have a devastating effect. More than 2,600 dealerships are slated to be shuttered and at least 14 plants will be closed.
Nevertheless, the UAW and its members have ratified the move, which they deem as “desperate” but the only option. It is reported that the workers, through their retirement fund, will own 17.5 percent of the company, while the government will own 60 percent, with the remainder left for bondholders, many of whom are still holding out on the bankruptcy action.
President Obama is extremely optimistic that the restructured GM will be revived and making cars the American public will buy. To get back on the profit side of the ledger, the company will have to sell more than 10 million cars next year, which many believe is not possible.
Nor do Obama’s critics, including some members of his own party. “It is unacceptable to ask U.S. workers to subsidize the exportation of their own jobs,” Rep. Dennis Kucinich, a Democrat from Ohio, whose district includes Cleveland, told the press. “The taxpayers’ investment should be used to protect American plants so that American workers can build the next generation of automobiles.”
What Kucinich was addressing was the same issue raised by the marchers to Lansing. They are concerned about the outsourcing of jobs–some destined for foreign shores and others to the South–where fewer workers are represented by unions. Meanwhile, Obama was enthusiastic about the developments around Chrysler’s bankruptcy, filed back at the end of April. “Just 31 days later, a court has approved the Chrysler-Fiat alliance, paving the way for a new Chrysler,” he announced, which means the bankruptcy may be over in a few days.
Obama expressed similar hopes for GM, stating that the government had no intention to run General Motors and the company would be run by private board and management teams. “They will call the shots…and not the government,” he said. “Only when a difficult decision needs to be made, the government will make [the decision].” Even so, to expect the larger, more complex GM bankruptcy to proceed at the same speed with the same results as Chrysler’s may be wishful thinking for the century-old icon. Even Obama had to concede these facts. “We are hopeful that this will take care of it,” said Ron Gettelfinger, president of the UAW about the bankruptcy, “but there has been a lot of sacrifice to get to this point.”
And probably much more sacrifice waiting in the wings and in the unemployment lines.