upturn in auto sales in the United States in nearly two years. Third-quarter profits as a whole were up 123% for the U.S. auto-and-parts industry• But the headlines from Detroit are contradictory: "Auto sales up, " "Layoffs increase. " Auto sales are increasing but auto production is still below year-ago levels and there continue to be episodic layoffs.
U.S.A. upturn & unemploy/ ment According to the October 28 Wall Street Journal, "Industry sources said that next month auto makers are planning to build about 594, 500 cars in their U.S. assembly plants, down from 614, 671 a year earlier, That appears to be generally in line with long-range schedules set before the current fourth quarter began. If anything, recent adjustments of these earlier rough schedules have led to a small net reduction, rather than an increase, in the number of cars Detroit will assemble this quarter. " The October 31 issue of the same newspaper reported that "Ford Motor Co., still struggling to control inventories of unsold cars, announced it will close assembly plants next week, temporarily idling 7, 150 workers. Despite some upturn in U.S. auto sales, Ford and other automakers have been making a number of such production cuts.
The auto trusts are responding cautiously to the uptick in sales. Retail car deliveries in mid-October were above a year earlier - but the autumn and winter of 1974-5 saw auto sales at their lowest point since the end of the second world war. The auto trusts are still saddled with a huge inventory of "overproduced" cars - estimates of the unsold cars on the lots run to 1.5 million, the equivalent of 55 days' production at current rates. So automobile production is being kept at a lower level than last year, and this partially accounts for the continued layoffs. The profit leap undoubtedly stems from the fact that the assembly lines are still operating with the reduced labor force resulting from two years of layoffs. In fact the evidence points to significant "rationalization" in the auto industry. Fewer workers are turning out more cars and profits ore surgingAlthough precise data is impossible to obtain, (2) government figures are indicative. For June, the most recent month for which all data is given, Commerce Department figures show 571,800 production workers in motor vehicles and equipment and a total output of 841,400 motor vehicles, including trucks and busses. The ratio is 1.47 vehicles per production worker. Here are comparative figures: Year Vehicles Workers Ratio His. per wk June 1973 1,219,800 746,600 1.63 39.8 June 1974 909,500 676,000 1.34 39.6 June 1975 841,400 571,800 1.47 39.2 These figures show three stages of the auto production cycle. June 1973 was the second highest auto production month in U.S. history (May was the highest). Produetivity and profits stood at record highs. This is because the whole productive apparatus of monopoly industry is geared to make profits at a fraction of full capacity. When output exceeds this fraction, and this can happen with minimal additional hiring, productivity and profits soar. By June 1974 production had fallen 25% and employment was down 9%. Profits approached a low point. The bottom was reached in February 1975. By June of this year production was on an increase but it was still 7% lower than a year earlier and employment was 15% lower. The way was being paved for the profit surge in the third quarter. New York Times figures in September 1975 further confirm this trend. The Times reported from Detroit September 1 that unemployment had risen from the February low point. There were "274, 380 idle in the week of Feb. 3, when the industry jobless rate reached 38.5 percent. " The latest information places "employment at the Big Three (i.e., General Motors, Ford, and Chrysler) ... down 178, 600 from the peak reached in their record year of 1973. " These figures are close to those shown in the table above. They underscore the essential point: Auto production today is taking place
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NEDOLLA with a considerably reduced work force, on the order of 175,000 fewer workers, almost 25% below the 1973 peak. It is well known that the U,S, auto industry is under tremendous pressure to build smaller cars that use less gas. With considerable fanfare, General Motors placed a new "subcompact, " the "Chevette, "on the market in September. It gets 30-40 miles per gallon and it is supposed to cost less than $3,000. GM president Elliott Estes told Forbes magazine that GM had a $3, 000 million investment plan to invade the small-car market. To raise capital GM floated a $600-million loan earlier this year, the largest single bond offering ever made by a corporation. "We don't compete against 60
FORD around 56% of the foreign cars sold domestically today, " said Estes. "This car is aimed right at that 56%, which isa 600, 000-vehicle market, and we are going after 200,000 to 300, 000 of them." But the Chevette is the only new subcompact this year. Business Week reported in July that the auto trusts would only have "face-lifted versions" of last year's models on the market in 1976 "with little improvement in fuel economy. " Production figures for the third week of October do show a rise in production of the subcompacts: 19,439 compared to 16,44l in the same week of October last year. Considering the smaller total production for this week in October, the proportional rise is even greater; 12% of the week's total are subcompacts this year compared to 8% in the same week last year.
A82MUNICIPAL ASSISTANCE CORPORATION FOR THE CITY OF NEW YORK CUSIP 626190 AF 9 8¼% 1975 SERIES A BOND DATED JULY 1, 1975. But this is still far from corresponding to the demand For small cars. In the same week this October, foreign cars represented 20% of the total sold by retailers. Sales of domestic smaller cars were also considerably higher than production, consequently reducing inventories. Apparently the conversion of the U.S. auto industry to smaller cars is finally under way — a tribute to the "speed" at which monopoly adapts to technological progress! - but it is only the beginning. Large cars still overwhelmingly dominate this year's U.S. aufo output. Nevertheless it is certain that when General Motors does produce subcompacts in massive numbers, it will control half the market, as its president, Estes, boasted. The gigantic multinational manufacturing monopoly dwarfs every other competitor inside and outside the United States. Up to now, GM has refrained from massive production of subcompacts only because of the higher profits on the bigger cars. But the tremendous profit losses in 1974, as the world market for big cars virtually collapsed, could not be neglected by GM's board of directors. What is most important is that the production of smaller cars in the United States will clearly be accompanied by a profit-gouging rationalization of the industry. The notorious GM Vegas, which come off the Lordstown assembly lines at more than 100 per hour, show what is in store. In this light, the huge reduction of the auto labor force is not accidental. It paves the way for intensified U.S. competition in the world small-cor markets. The ultimate consequences of this can undermine the European and Japanese economies. Business Week already notes that the present recovery in auto production outside the United States is "due largely to the resurgence of the U.S. economy, the key import market." Ar this stage of the international crisis of capitalism any "solution" for one sector of national monopoly can only exacerbate the problems elsewhere. GM's Estes's dreams of capturing an American market could end up only closing off a vitally needed recovery valve for Japan and West Germany. The figures in this article should also be closely studied by those trade unionists who believe that furthering the position of U.S. monopoly in international competition is a way of saving jobs. In reality, a crucial part of gearing up U.S. industry for world competition is slashing jobs and speeding up production. This was no less true in the shoe and textile industries, which closed up their northern plants and moved to the union-free south. In the steel industry, where protectionist cries are the loudest, steel-union chief I.W. Abel has entered into productivity pacts with the bosses that pave the way for drastic job losses. International monopoly competition can never protect the interests of the workers. Its central aim is always to increase profit margins in order to slash prices on world markets. This is always done at the expense of workers, both outright in the form of job losses, and in the plants in the form of speed-up and other jobthreatening procedures. On the job "accident" score, the U.S. auto industry is close to first place. Detroit's Black workers Detroit is the fifth largest U.S. industrial city. ha 43.7% Black - and on the way to becoming majority Black as whites move to the suburbs. It is the the American automobile industry, although the plants have moved from downtown to neighborhoods. Including metropolitan Deir
USA constellation of other "motor cities" in central Michigan and neighboring Ohio, as many as half the cars produced in the United States come from this area, Detroit was dragged into the depression of the 1970s earlier, and in many ways to an even graver extent than New York. In 1973, General Motors said it employed a total of 639,091 workers, of whom 95, 685(14.9%) were Black. The Black jobs were concentrated almost entirely in production. "Semi-skilled operatives" included 72.9% of the Blacks working for GM; Blacks held 19.9% of these jobs. In addition, the GM Black labor force held 23,5% of the jobs classified as "service workers" and 29.6% of the jobs classified as "unskilled laborer. "(3) We have already seen the tremendous volatility and immense loss of production worker jobs in the auto industry. By February of 1975 a Detroit Free Press correspondent was writing this about the Michigan representatives in the U.S. Congress: "Each day, in the letters and postcards they get from home, members of the Michigan congressional delegation feel the pain of the unemployed. "And they shake their heads with frustration and even a bit of fear when they hear reports of new plant closings, new layoffs coming, new unemployment figures: 14 percent in the state, 22 percent in Detroit, 50 percent in the inner city, 15 percent in Port Huron, 20 percent in Flint and no letup in sight. " There were sections of the overwhelmingly Black east side of Detroit that reported unemployment above 60%. The waiting time in the unemployment lines was at least two hours. The long lines of unemployed Black workers were not created only by the 1974 depression. Many Blacks did not find adequate employment - if any jobs at all -in the brief 1972-73 upturn of the economy, so that Black unemployment in the recession of the 1970s must at least be traced back to the previous 1969-71 downturn. The National Urban League emphasizes that "Poverty patterns among black families consistently underscore the impact of the 1969-71 recession, Between 1969-71, the number of black families below the official poverty level rose by 155, 000, to 1,480,000. But they continued to rise to 1, 525, 000 by 1973 (a "boom" year, especially for auto - D.R.). Thus, by 1973, there were 200,000 more officially poor black families than there were in 1969... . And the proportion of the official poor among all black families remained unchanged (at 28 percent) over that four year period." (*Black Families in the 1974-75 Depression, " National Urban League Research Department, July 1975.) B.J. Widick described Detroit after the 1969-71 recession: "Detroit in the 1970's is a startlingly different city from the factory complex associated in modern times with the auto industry. ... It no longer has the appearance of a swarming beehive of auto workers rushing to and from the huge industrial plants on the east 62 and west sides. Now the major traffic consists of white middle-class suburbanites driving early in the morning into the city's downtown commercial center and inching their way out of the city before darkness sets in. ... "All of the auto companies have decentralized their production, partly by expanding into the undeveloped sections of the vast metropolitan areas surrounding the city.... *Where giant auto plants once stood on the east side, there is nothing. The deterioration of the city is visible everywhere, not just on Twelfth Street, where the physical scars of the 1967 riot remain untouched by any reconstruction. "For every new business moving into the city, two more move out. There are over 7, 000 vacant store fronts.... "The city becomes more and more of a ghetto." (De: troit, 1972) Figures have not yet been reported for the standard of living of Black families in 1974-75, but the present situation is obviously much worse. The Urban League said, "Since industries such as construction and manufacturing (especially automobiles) with a concentration of men were hit harder by the economic decline than were the service industries with a concentration of women, men tended to be affected disproportionately. " In the second quarter of 1974 official figures listed 319,000 adult Black men out of work. This figure had risen to 621,000 by the second quarter of 1975. The 1974-75 downturn consequently caught much of the Black population before they had recovered from the previous downturn - and the 1974-75 slump was worse. Moreover, if the auto industry is indicative, the production drive on which the present "recovery" is based will hold even less promise of jobs for unskilled workers than did the previous uptum. For Detroit it undoubtedly means that the process described by Widick will deepen. Already in February 1975 the Chrysler Corporation made it clear that its well-known Jefferson Avenue plant in the Black east side of Detroit would not be operating during the next cyclical upturn. This downtown multioried assembly plant had been rendered obsolete by se single-story confinuous assembly-line plants in the suburbs, according to Chrysler executives. As the world crisis of capitalism deepens and U.S. imperialism places more and more emphasis on international competition, economic "recovery" will increasingly be at the expense of the more oppressed layers of American society. Cities in crisis This prospect is deeply intertwined with the fate of the big industrial cities whose populations are heavily composed of oppressed nationalities.
It is easy to frace for New York a decline of jobs parallel to Detroit, going back to the 1969-71 recession, and rooted, as well, in international competition. Michael Sterne gave this account in the October 15, 1975, New York Times: "The fiscal crisis that has agonized New York for the last year, bringing it repeatedly to the brink of bankruptcy, really began in 1969 when the city's economy, which up to then had been growing rapidly, began to shrink. "In the six years since then, 501, 800 jobs have disappeared from the city, and with them have gone an estimated total of $1.5-billion in tax revenues that, had they been available to Mayor Beame, could have eased the fiscal crisis significantly and might even have averted it. "The economic decline that began in 1969 was touched off by national recession. But the job losses continued even after the national economy recovered; they accelerated before the current national recession began, and they have been proportionately more severe here than in the nation as a whole.... "The causes of the decline are many and complex. Among them are wage rates higher than those that prevail elsewhere in the country, high energy, rent and land costs, traffic congestion that forces up transportation costs, a lack of modern factory space, high taxes, technological change, the competition of newer centers of economic concentration in the Southwest and West, the refocusing of American economic and social life in the suburbs.. -"Some of the causes are international in scope, such as the transfer of apparel and other soft-goods manufacturing to areas of cheap labor in the Caribbean and the Orient, which has taken jobs from New York and other, older American cities.
"The loss of the factory jobs has been especially harmful to New York because it came at a time when the part of its population needing such work - the traditional, foothold occupations of new New Yorkers - was growing. Since 1950, the number of poor blacks and Hispanics living here has increased by two million while an equal number of middle-class whites has moved out."
All of these factors combine to leave a heavy residue of unemployment in the major cities even after employment begins to rise elsewhere in the country. New
York's unemployment rate stood at 11.9% in September and October compared with the national averate of
8.2%.
Unemployment in Boston stood at 12.9% in August, compared with 6.9% a year before, while Detroit's rate of joblessness stood at 13.6%, compared with 8.6% a year before (before the really sharp drop-off in auto already discussed).
The concentrated attack of the rulers of the United State on New York workers - which it is crystal clear they mean to keep in national prominence - points to the imperialists" strategy for cities across the land. They hope to teach workers that the sacrifice of jobs and services is the only "solution" they should expect as the cities decay. That workers themselves are keenly aware of this meaning of the New York crisis was revealed in an unexpected response to a national poll following President Ford's scathing attack on New York City delivered at the Washington, D.C., National Press Club October 29. The poll showed that 69% of those queried believed that a New York default would have an important effect on the national economy. Sixty-eight percent believed that other cities are facing similar financial problems to New York. And 55% believed that the federal government should provide funds to help New York out of its financial crisis. The irony was that not one single bill before the U.S. Congress at the time actually considered direct federal aid to New York. They were all merely different forms of federal guarantees to the New York banks no different from the plan that the Ford administration ended up initiating. The demise of the "Jefferson Avenue" plant on the east side of Detroit symbolizes the countervailing trends in the American economy discussed in this article. Under conditions of global economic crisis the U.S. imperialist drive to maintain first place in international competition will increasingly clash with the struggle of Blacks and other oppressed minorities for equal rights and job opportunities. A parallel process is the sharp deterioration of living standards for all workers in the industrial cities, supported by an offensive of the ruling class to take back concessions to workers that had been extracted previously. These deep-seated tendencies are increasingly constant features of American society, regardless of fluctuations in the "business cycle." FOOTNOTES: 1. For details, see "Auto Industry: A Worldwide Crisis, "by Ernest Mandel, INPRECOR, No.4, July 18, 1974. 2. General Motors was formed into its present monopoly structure in 1917. In its entire history — it has been repeatedly "investigated" by high-level Congressional committees and it has been the target of numerous suits - GM has not revealed the cost-of-production figures for a single car manufactured in its plants. Such is the privilege of private ownership! 3. Of its total employment General Motors also listed 15, 129 (2.3%) "Spanish surnamed Americans"; 1, 185 (0.2%6) "American Indian"; and 1, 122 (0.2%) "Oriental. " These jobs were heavily concentrated in the same categories as Black workers.
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