President Obama announced this week that the U.S. taxpayers, now own 60% of General Motors. Just who will benefit from this investement? As GM’s bankruptcy was filed this week, President Obama tells us that GM will be "revamped", made leaner and meaner to make it profitable once more. Blogger "Emptywheel" reports from the White House press conference that Obama announced that the principles behind "fixing GM" would bascically be to :
* Install the right kind of management
* End the need for government support as quickly as possible
* Protect taxpayer investment
* Do not interfere with day-to-day operations
* No government employees will serve on the board
* Only participate on core board issues, such as selection of board members, major events, and transactions
But who will do the installing of the "right kind of management" with no government employees serving on the Board of Directors? Why not allow those with the highest stake in the company's future make those decisions?
Will Obama's "right kind of management" include those the workers, small businesses and communities who have an basic survival interest in keeping GM alive and well? Or will they represent only those who worry only about profit statements – those who own stock or bonds in the company, i.e., many of the some people who drove the company into insolvency. How will the administration "protect taxpayer investment" if it will only participate in "core board issues" and how will those be defined?
Who will really benefit from our national stake in GM.?
GM used to be the biggest company in the world. It was said that "What is good for GM is good for the nation." Now, some GM plants will be closed altogether, others may be sold. How will the workers in these plants benefit? How will the communities whose economic life revolves around these plants benefit when these plants cease to generate jobs and tax income?
Contrast Obama's Nationalization with Chavez's Plan.
In Venezuela, the Chavez government has nationalized some companies, some basic industries such as oil serving companies and steel and, especially, those who were refusing to comply with collective bargaining agreements or those who were illegally avoiding compliance with the rules governing production of social necessities.
Rather than "re-vamping" these companies for sale to other private owners, as will happen with GM, these companies are being turned over to the control of their work force, to be managed by workers’ committees with input from the local community councils.
These nationalized companies are considered "social property", titled in the name of the state, but controlled by those who work there with input from the communities in which they are located. These companies will utilize the intimate experience of the workers with the process of production to improve and innovate. Managers will be elected and subject to recall by referendum.
Because the objective is to serve the needs, not only of the individual company's workers, but the needs of the community and the larger society, planning about what will be produced will reflect the local community and the nation as a whole.
"On Thursday, May 21, at a workshop with the workers of the basic industries in the state of Guayana, President Chavez announced the nationalization of the following iron briquette and steel companies: Orinoco Iron, Venezolana de Prerreducidos of Caroní (VENPRECAR), Materiales Siderúrgicos (MATESI), and the Complejo Siderúrgico de Guayana (COMSIGUA), as well as Tubos de Acero de Venezuela (TAVSA) and Cerámicas Carabobo.
He also confirmed the collective bargaining agreement of CVG Ferrominera and spoke of the creation of an industrial steelworks complex, indicating that, "These companies must be placed under workers' control; that's how it has to be." He continued, "let's start the process of nationalisation in order to create this industrial complex."
President Chavez is not only nationalizing large companies in the basic industries, but also encouraging small entrepreneurship and the creation of worker-owned cooperatives. It is thought that this "mixed" economy will better serve the needs of the majority of the citizens.
Why Economic Democracy is Needed in the U.S.: The Reason GM Failed.
GM become insolvent, threatening millions of jobs and hundreds of communities, because its managers and directors were focused on making short term profits rather than improving the long term health of the company. The managers and directors, many of whose compensation was tendered in stock options, saw immediate personal profit by making the company’s stock price rise as high and as fast as possible. Thus, their business decisions were focused on quick profits rather than protecting the future strength of the company.
We can see the motive for quick profits at work in their production planning decisions: they chose to produce gas guzzling SUVs rather than follow the Asian model of smaller, fuel efficient cars. They chose not to invest in developing economical cars which would run farther on alternative fuels. They chose to pay higher dividends to stockholders rather than use profits to re-invest in innovative designs. Their greed ran GM into the ground, ultimately endangering not only stockholders but the millions its workers and those of feeder businesses.
Why not turn GM over to Worker-Community Management?
The workers and the GM based communities have a long-term interest in building a sustainable business, one that will provide stable jobs for its workers, a stable tax base for its community, and better meet the challenges of global warming and scarcity of fossil fuel?.
Why Should Tax-payers Re-Build GM For the Benefit of The Few?
Will the U.S. government use taxpayers’ dollars to re-build the company only to turn it over into the hands of those will only repeat the same "quick profits" mantra? It is highly likely.
With the election of Barack Obama, the majority of American voters voted for change, especially change in the way our economy is run. Given the economic crisis, we have an opportunity to make significant changes in the way our economy is run.
Rather than putting taxpayers’ dollars into revamping a failed company so it may be sold to the same private interests who have destroyed our economy, we need to demand that our economy meet the needs of the majority of our citizens, not merely supply huge profits to the wealthy.
Turn GM Over To Worker-Community Control.
Since we now own a controlling interest in GM, let’s try a new model of economic ownership and control. Let’s turn it over to the control of the workers who know its problems and processes most intimately; let’s give the communities and greater society a say in what is produced and how it is produced. Let’s make "What is good for GM" truly good for the nation.