GM & Ford earn billions, resist even crumbs for workers

General Motors announced its second quarter results on Aug. 4. For just the months of April, May and June the company’s profits were a whopping $2.5 billion.

GM made even more in the first quarter — $3.2 billion after taxes and interest. Not far behind, Ford raked in $2.4 billion in profits in the second quarter, for a total of $5 billion in the first half of 2011. Together GM and Ford could net $20 billion this year.

“We are partners joined at the hip,” stated GM CEO Dan Akerson, referring to the company and the hourly workers. “One can’t prosper without the other doing well, too.”

Akerson’s comments came as negotiations between GM and the United Auto Workers formally began. “It is workers whose long-term success depends on the success of the company,” echoed UAW President Bob King.

Karl Marx would disagree. “Growth of productive capital and rise of wages, are they really so indissolubly united as the bourgeois economists maintain?” a young Marx asked in 1847. “We must not believe their mere words. We dare not believe them even when they claim that the fatter capital is, the more will its slave be pampered.” (Marx, “Wage Labor and Capital”)

On the contrary. “If capital grows rapidly, wages may rise, but the profit of capital rises disproportionately faster. The material position of the worker has improved, but at the cost of his social position. The social chasm that separates him from the capitalist has widened.”

For example, Marx showed that for a standard 12-hour day back then, a weaver might be paid three English shillings. The factory owner might turn around and sell the worker’s product for six shillings, pocketing three shillings as profit. The worker put in six hours for wages and another six producing what Marx called “surplus value,” which is what the boss pockets as profit. With a more modern machine the same weaver might make twice as much cloth, which at the same unit price would yield 12 shillings. Even with a raise to four shillings a day, the worker would then be working only four hours for wages and eight hours making the boss’s profits.

If the weavers were to organize a union and go on strike for another shilling a day, that would boost their income while simultaneously eating into the profits of the capitalist. What if the boss hired scabs and mustered all the forces of the capitalist state — the police, courts, armed forces, etc. — to break the union and cut the workers’ pay as retribution? That pay cut would translate into increased profits.

It seems simple. The more one class makes, the less the other one makes. The interests are inherently contradictory.

This is the 21st century, not the 19th. But despite what Akerson and King suggest, the relationship has not altered that much.

If it had, Akerson and King would have as their first priority restoring everything the UAW membership gave up during the 2009 bankruptcy.

What UAW workers are owed

First, all workers would be paid the same. The two-tier pay scale that has some workers making $14 an hour for the same very hard work others do for $28 would be abolished.

Then the company would raise the pay of workers who have not had a raise since 2005. It would again pay time-and-a-half after eight hours. It would give back breaktime (amounting to 40 hours a year) and paid holidays the workers sacrificed.

After that, all the workers who took buyouts after their plants closed would be offered their jobs back.

Is any of this being talked about? No way. The top brass at the three companies have made it clear: no pay raises.

GM even wants more health care cost-cutting. Nothing that could be defined as a “fixed cost” is even being discussed. Instead workers are being sold “profit sharing” — the more the bosses squeeze the workers, the bigger the small portion that’s kicked back to them — and bonuses tied to productivity and attendance.

Profits exceed total wages

On each vehicle GM has been making about $2,800 in profit. The company claims total labor costs, including benefits, come to $60 an hour and that an average of 30 hours’ labor is needed to produce a car or truck. Labor costs are therefore only $1,800.

So in an eight-hour day, the workers on the line spend about three hours and eight minutes earning wages and four hours and 52 minutes producing profit for the company. Shilling for shilling, dollar for dollar, workers are still being exploited.

The rate of exploitation is much higher in Mexico, Korea and other low-wage countries. A globalized system of multiple wage tiers pays workers in Asia and Latin America a fraction of what their counterparts in the UAW make. To again quote Marx, “Profit and wages remain as before, in inverse proportion.”

Autoworkers and their leaders need to recognize that the relation between labor and capital is still fundamentally antagonistic. “Success” for one comes at the expense of the other. Workers and oppressed people of the world need to stop competing with each other and build a global resistance to capitalist exploitation.