GM, Jobs, and Corporate America’s Incentive to Exploit

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

On Monday morning, November 26, the auto giant General Motors announcedplans to shut down production at five plants in the United States and Canada and shear off 15 percent of the company’s salaried jobs. The moves will cost 14,700 GM workers their livelihood.

The communities where those workers live will lose out, too. In Lordstown, the Ohio locale that hosts one of the plants set to be shuttered, officials estimate that every GM job cut will cost seven other workers outside GM their employment.

Did the GM executives who made the shut-down decision take that spin-off devastation into account? Did they soberly conclude that they had no choice, that only massive job cuts could ensure their enterprise a stable and sustainable future? Or do the GM job cuts reflect, in the end, nothing more than naked self-interest on the part of those executives, an attempt to enrich their own future — at worker expense?

The simple answer: We can’t get into the minds of the GM execs who’ve ordered the job cuts. We can’t divine how much greed determined their decision. But we can, rather easily, see who stands to gain from GM’s massive job cutting. Certainly not GM workers. In the wake of the GM layoffs, thousands of workers and their families will be poorer. GM execs, on the other hand, will be richer.

Substantially richer. At GM, as at all major U.S. corporations, the ultimate compensation top executives take home rests either directly or indirectly on their enterprise’s share price. The more that price rises, the more they pocket. In the afternoon after the GM job-cut announcement morning, Wall Streeters bid up the company’s shares a whopping 7.9 percent. Shares ended the week almost as high.

Corporate execs at GM and elsewhere tend to fixate on their share prices. They’ll do most anything to jack them up, even have the corporations they run expend big bucks — an estimated $1 trillion this year — to buy back their own corporate shares on the open market. This maneuver has just one purpose: to heighten demand for a company’s shares and raise the price they sell for. GM execs last year spent $100 million on “buybacks.”

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work