Government Motors Increases Profits, Freezes Salaries

Remember when Michael Moore staked out Roger Moore of General Motors in Roger and Me, claiming that GM’s brutal capitalism earned the company profits while it mistreated workers?  Well, where’s Moore when you need him?

Yesterday, the largely Treasury Department-owned GM (32%) announced that it would freeze the pay of all 26,000 of its US employees, and would dump its pension contributions, as well as slashing bonuses. This even as it announced that it had posted an $8 billion profit in 2011.

So what’s happening with GM? It seems that the government has recognized that companies cannot run indefinitely while granting enormous pension benefits. GM still suffers from massive pension underfunding – they’re short some $8.7 billion – and so they need to cut costs. They’re doing that by tamping down their employees and by – yes, you read this right – outsourcing.


So where’s the left in all of this? They’re silent, because they want the government takeover to be seen as a success, even if it hurts the workers they supposedly prize. Thus, back in September 2011, when the United Auto Workers and GM went into negotiations over salary and bonuses, UAW treated management with kid gloves.  “A failure to reach a settlement would be looked at as almost a repudiation of the government funding,” said labor relations Professor Gary N. Chaison of Clark University. UAW, in short, wants to help the Obama Administration, and they’re willing to sell out their workers in order to do it. And why not? Thanks to the Obama Administration, the UAW ended up with a huge ownership stake in GM (they still own 10% of the GM trust, putting them on both sides of the negotiating table).

Apparently when private industry operates according to capitalistic principles in order to save itself, that’s immoral. But when government does it, not only is it moral, it receives the active support of labor unions.

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