Chrysler Bailout a Stimulus for Mexico

Auto maker moves family-supporting jobs from Wisconsin to Mexico, where workers typically earn $1 or $2 an hour; GM may be next to save money by exporting jobs.

By Roger Bybee

The Chrysler Corporation’s survival has been assisted by federal efforts to provide it with billions in bridge loans and help it conclude a merger with Fiat.

But Chrysler’s expression of gratitude to its workers and the taxpayers of America: moving 850 jobs from its engine plant in Kenosha, Wis. to Mexico, where Chrysler has long had a major presence.

Apparently the survival of the corporation does not mean the survival of its workers in Kenosha.

[Chrysler said in a bankruptcy court filing that the Kenosha plant is among eight factories that are “currently scheduled to close by December 2010” and would not be transferred to the “new Chrysler” that will be co-owned by Italian carmaker Fiat Group SpA, the Milwaukee Journal Sentinel reported May 1. Chrysler spokesman Max Gates said the eight plants could be sold to another company or a new business or shut down entirely. The company plans to sell or shut the Kenosha plant by Oct. 2010, Gates said.]

In Mexico, Chrysler will have the opportunity to exploit a workforce denied the right to organize independent unions. Thus, family-supporting jobs from Kenosha will be transformed into jobs that typically pay $1 or $2 an hour.

Meanwhile, southeastern Wisconsin will be dealt another devastating blow in its efforts to recover. More workers will lose buying power, and Obama’s efforts to stimulate the economy will be, in effect, sabotaged.

Corporate America is moving in a very different direction, undermining Obama’s stimulus efforts with their own strategy of using this crisis to out-source as many jobs as possible and make massive cuts in their workforces. These cuts come in a time of national economic emergency where we need to create and preserve every family-supporting job possible.

President Obama has been unceasingly working to breathe life back into a US economy that was flat-lining after the meltdown brought on by deregulation of Wall Street and the ensuing orgy of greed, with $18 billion in bonuses shelled out last year.

In this time of national economic crisis, we need to preserve our productive base, or we will be forced to increasingly rely on the financial sector, which provides astronomical wealth for a fortunate few but has little room for the rest of us.

The loss of hundreds of more Chrysler jobs will deepen the recession at a time when Kenosha and the region need more buying power, not less.

Unemployment is particularly dire in southeastern Wisconsin, where it is approaching Great Depression levels: in Racine, 16.3%; Kenosha, 11.2%; Janesville, 15.3%, and Beloit, 17.7%. The Delphi plant closing in nearby Oak Creek and the GM shutdown alone account for some 7,600 destroyed jobs.

But these official unemployment figures understate the true level of joblessness, not taking into account all those who have lost hope and given up looking for work and all those working-class young men of all races abandoned by society and sitting in prison.

The current crisis is severe enough without Chrysler adding to it. Unemployment literally causes casualties. Every 1% increase in the national unemployment rate is associated with 47,000 deaths, half of them heart-related, and 831 additional murders, according to Prof. Peter Dreier of Occidental College.

The human toll of unemployment in southeastern Wisconsin is visible in many forms: the over-filled homeless shelters, the tripling of foreclosures in Rock County since 2000, the vast waiting lists for health care (while Congressman Paul Ryan [R] opposes every version of healthcare reform that would actually assist anyone), and family violence increases from the stress of unpaid bills and no future. Janesville has seen a near-tripling of its need for shelter for battered women and children over last year. Even before the current downturn, child poverty in Kenosha doubled 2000 to 2005.

This latest step by Chrysler to Mexico, if they are permitted to pull it off, will immensely deepen the human suffering. (We should remember that the loss of 5,500 assembly jobs in 1988 at Chrysler was due to a three-cornered move by Chrysler, where it shifted jobs from Detroit to Mexico, and then moved Kenosha jobs to Detroit.

As we consider the situation, we should keep four elements in mind:

1) WE HAVE A MORAL CLAIM ON CHRYSLER: The use of taxpayer dollars to accomplish a shift of jobs to Mexico is an improper use of the billions in loans our government has extended to them in good faith. Chrysler should be using all of its resources to retain and generate family-supporting jobs in the US, thereby aiding the nation’s economic recover.

2) CONTACT THE WHITE HOUSE AS WELL AS CHRYSLER: When you send messages to Chrysler CEO Robert Nardelli, you also should send one to the White House.

The direction that the Obama-appointed Automotive Task Force has taken departs sharply from Obama’s stated goals of keeping jobs in America and building up consumer demand. The Task Force rejected GM’s Feb. 17 plan because it did not go far enough. The Task Force wants GM to slash thousands more jobs, close more plants, place retiree benefits in a riskier position, and rely more heavily on cars produced in Mexico, Japan and South Korea for the US market.

Given that the Task Force seems to have anything but a pro-worker orientation, President Obama needs to hear about the outrageous relocation of Kenosha jobs to Mexico.

3) FIGHTING BACK PAYS OFF: In 1988, when many people thought the forces of corporate globalization were all-powerful and that us puny mortals must bow down before the likes of Chrysler CEO Lee Iacocca, UAW Local 72 waged a 10-month battle to stop the loss of 5,500 jobs. The union didn’t ultimately prevail, thanks in good measure to back-room deals cut by Gov. Tommy Thompson, Congressman Les Aspin, and Kenosha’s local elected officials. But Local 72 did succeed in winning the best plant-closing agreement attained up to that point, and helped to secure the remaining engine jobs.

Another problem the union faced at that time was the lack of support from college-educated employees across the area. They simply didn’t understand the stake that they had in preserving all those family-supporting jobs which paid the taxes supporting teachers and other public employees and bought the goods and services that kept Kenosha a middle class community.

This time around, white-collar workers know that they can be replaced just as easily as UAW members, as corporations increasingly rely on “off-shoring,” getting cheap professional labor in India, China, and elsewhere. In 2009, the entire community can see that a corporation that owes its continued existence to taxpayers here and across the country is arrogantly forgetting that it owes any obligation to workers and communities.

The workers at Republic Doors and Windows in Chicago were confronted with an employer scheming to close the plant and secretly relocate to a non-union plant in Iowa. They also faced the refusal of the bailout-rich Bank of America to release the vacation and severance pay owed the workers.

So the members of United Electrical Workers Local 1110 occupied the plant for six days, showing that a determined union with broad community support can win out against the odds.

We have the power to turn Chrysler around on jobs going to Mexico, if we realize that our actions truly make a difference.

Roger Bybee edited The Racine Labor from 1979 to 1993, and testified before Congress about the impact of the Chrysler closing. Articles on the closing and other issues are available at ( Email

From The Progressive Populist, June 1, 2009

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