Thursday, February 7, 2013

How long?

How long? one wonders, will the Producing Classes of the developed world stand for the pirates stealing their livelihoods.  These situations do not go on forever.  Yes, of course, conditions are markedly different from the 1930s when there was only a minimal safety net for the unemployed, sick, and elderly.  So this time around, the deliberate destruction of jobs has gone on now for 35 years since at least the "glory" days of Margaret Thatcher and because there has been a safety net, there has been only tiny amounts of social disorder.  But now the greedheads are trying to steal the safety net—dumb, VERY dumb—so soon we will see similar conditions as in the 1930s.  Folks should be reminded of how well that turned out.

When factory workers threaten to blow up their factory, you can actually feel the extremes of desperation.  The factory is their creation, after all.  Blowing it up would be similar to killing their own children.

French Workers Threaten To Blow Up Their Factory

Wolf Richter, Testosterone Pit | Feb. 7, 2013

Tuesday morning, the 168 remaining employees of DMI in Vaux, a small town near Montluçon in the Department of Allier, smack-dab in the middle of France, rigged about ten gas cylinders throughout the factory they’d been occupying and threatened to blow it up—unless their demands were met.

Another day in the decline of the private sector à la Française.

Formerly named Brealu, the foundry manufactured cast-aluminum intake manifolds, suspension arms, steering pump housings, and other automotive components.

Among its customers: Renault, German heavy-truck maker MAN, US automotive component supplier BorgWarner, and French conglomerate Alstom.

Hobbling along on its last leg, the foundry was acquired by Diversified Machine Inc. (DMI), a worldwide automotive component supplier, which itself was acquired by US private equity firm Platinum Equity. Along the way, 40% of the employees at DMI in Vaux were axed.

“We specialize in acquiring operationally complex businesses, finding undiscovered opportunity, and creating value,” Platinum Equity says on its website. But it doesn’t always work out.

The DMI operations in Vaux ran aground in France’s private-sector crisis. French automakers, already mired in a morose industry, were unable to compete with foreign brands. While Hyundai, Kia, and some German brands experienced major sales gains in France last year, Renault’s sales collapsed by 20%.

So Renault, which had been buying about half of DMI’s production, slashed its orders. And on June 25, 2012, Platinum Equity had had enough. It sent DMI to the Tribunal of Commerce in Montluçon to seek bankruptcy protection.

The Tribunal granted protection for six month, in the hope that an acquirer could be found in the interim. If not, the Tribunal would seal DMI’s fate on February 21. Liquidation!

“We are once again facing an unbearable human and economic tragedy over the loss of manufacturing jobs in our region,” wrote National Assembly member Bernard Lesterlin at the time, a Socialist in whose district DMI was. He talked with members of the board, questioned Productive Recovery Minister Arnaud Montebourg “on this painful issue,” and promised a meeting with “all local stakeholders” in order to save the remaining 171 jobs.

Then a potential buyer emerged: Gianpiero Colla. He’d been acquiring tottering automotive component makers. Hope! He’d make an offer, he’d save the jobs.

But on January 18, he announced that he would not be able to put together an offer unless the customers of DMI, particularly Renault, guaranteed that they would purchase sufficient quantities. Enraged, the remaining 170 employees clamored to get the government involved. To induce Renault to commit to more purchases, they decided, ironically, to stop all shipments to all customers.

Then on Monday, February 4, Colla announced that he wouldn’t make an offer; he hadn’t been able to get Renault to guarantee sufficient purchases. The deal was off. The company would be liquidated on February 21.

Tuesday morning, the employees, now down to 168, placed about ten gas cylinders inside the plant and rigged them in a way as to turn them into bombs. The entrance to the factory was blocked by barricades of old tires and a burning pile of pallets. Angry men milled around. Photos of the gas-cylinder contraptions circulated. Some officers of the Gendarmerie, discretely deployed at a distance, did nothing.

“We all have worked for the company on average for 30 years, we saw it evolve, it’s our baby,” said Gabriel Gavin of DMI’s union, the CFTC. “If our jobs disappear, the plant will disappear with us.”

A large handwritten sign explained the deal: “DMI Platinum killed us. Renault, MAN, BorgWarner finished us off. They must pay 50,000 €/P.” In other words, the desperate workers threatened to blow up the factory unless they were paid €50,000 per person.

“We want the American fund Platinum, which put us into this situation, to come back to the negotiating table,” demanded Didier Verrier, secretary of the company’s union committee. “But not for nothing. We won’t discuss anything less than €50,000 per person.”

Extortion. Not exactly a helpful message for the private sector just when investments in factories and jobs were needed more than anything else. That the Gendarmerie refused to intervene sent another message: this type of extortion is tolerated. And investors were once again scratching their heads.

(Don't you just LOVE this paragraph!  "Scratching their heads?"  They are damn lucky to still have heads.)

OK, the workers were just trying to get everyone to focus on the issue—namely their jobs or €50,000 per person. It worked. Wednesday morning, National Assembly member Lesterlin showed up at the factory. Instead of telling the Gendarmerie to arrest the workers and remove the bombs, he told the workers that the negotiations between Renault and Colla had not been broken off, after all. And a meeting was scheduled for next week at the Ministry of Productive Recovery with Colla and representatives of DMI’s customers.

Whatever success or payout this might lead to, it won’t heal the French automakers so that they can build cars that the French want to buy in larger numbers. It is a discouragement for investors, another nail in the coffin of the private sector. And Renault, well, it now has another reason to shop for its components in China where much of the world’s component industry has landed.

It put the Socialist government in a quandary. While it promised to side with workers, it is also worried about their “radicalization” and has instructed police intelligence services to spy on them. Not exactly a campaign promise. Read.... French Government Fears ‘Social Implosions Or Explosions’  more
Those who live comfortable lives are always the last to understand why anyone would ever contemplate a revolution.  The best example of this sort of relentless cluelessness can probably be found in Checkov's The Cherry Orchard but there are many others.  Here Hallinan tries to outline the economic catastrophe that is sweeping Europe and wonders if Obama understands that his policies are leading to the same outcomes here in USA.
From Bad to Catastrophic...

Obama and Europe’s Meltdown


Back in the 1960s, the U.S. peace movement came up with a catchy phrase: “What if the schools got all the money they needed and the Navy had to hold a bake sale to buy an aircraft carrier?” Well, the Italian Navy has a line of clothing, and is taking a cut from a soft drink called “Forza Blu” in order to make up for budget cuts. It plans to market energy snacks and mineral water.

Things are a little rocky in Europe these days.

Unemployment is over 25 percent in Greece, Spain and Portugal—and far higher among young people in those countries—and most economies are dead in the water, if not shrinking. Relentless austerity policies have shredded Europe’s traditional social compact with its citizens, fueled a wave of debt-related suicides in the continent’s hard-hit south—Greek suicide rates jumped 37 percent from 2009 to 2011—and locked much of the continent into a seemingly endless spiral: austerity means layoffs, fewer jobs equal less revenue, lower revenues leads to more austerity=the classic debt trap.

“The economic situation in Europe is moving from bad to catastrophic,” says Douglas McWilliams, chief executive for the Centre for Economic and Business Research. “There is a danger that economic problems will spill over into social breakdown.”

So why hasn’t the U.S. Treasury pressured lending agencies, like the International Monetary Fund (IMF) and the World Bank to shift from austerity formulas to stimulation policies? Why is the Obama administration pressing Europeans to increase military spending? And what should it matter to Washington if Britain remains in the European Union (EU)?

It is not just that Europe is in crisis, it is that, as one Portuguese pensioner told Reuters, “We see no light at the end of the tunnel, just more pain and difficulties.” In November the European Commission reported that unemployment on the continent—now in excess of 25 million people—would continue to rise. “The economic outlook is bleak and has worsened in recent months and is not expected to improve in 2013,” the Commission found. “The EU is currently the only major region in the world where unemployment is still rising.”

A UN report predicts that Europe will not recover the jobs lost in the 2008 financial crisis until at least 2017. One EU study found that the crisis threatens to turn the 94 million Europeans between ages 15 and 29 into a “lost generation.”

All this translates into a level of economic misery that Europeans have not seen in more than 80 years. Indeed, Standard & Poor says Greece’s meltdown is worse in “duration and scale” than Germany’s was during the 1930s. The aid agency Oxfam reports that if the Madrid government’s current austerity policies continue, the percentage of people below the poverty line in Spain could rise from 27 percent to 40 percent. United Kingdom Chancellor George Osborne says he expects his country’s austerity program to continue until 2018.

The pain is so intense that it has helped fuel credible regional succession movements in Spain, Belgium, and Scotland.

But the push for yet greater austerity has less to do with a deep concern by Europe’s elites over debt—it is high but manageable—than as part of a stealth campaign aimed at dismantling rules and regulations that protect worker rights, unions, and the environment.

“We are seeing some worrying signs of anti-business rhetoric among some of Europe’s leaders and believe that this is not a productive and collaborate approach to take,” DuPont’s head man for Europe, the Middle East and Africa told the Financial Times. “Business and government need to collaborate to face the challenges of the future.”

The “anti-business rhetoric” comes mainly from workers—and increasingly members of the middle class—desperate to hold on to jobs and a living wage. Ford, General Motors, Hewlett Packard, Citibank and Japan’s Nomura Bank have cut jobs, increasingly moving their operations to “developing countries,” that is, those with weak unions and/or authoritarian governments. While U.S. executives increased their investments in Europe by only 3 percent, they have amped up those in the “developing world” by 25 percent.

In short, corporations are saying to Europeans, give up your working conditions, wages, and benefits, or we export your jobs.

Workers have not taken this employer offensive lying down. There have been strikes and walkouts from Spain to the Czech Republic, and austerity adherents have suffered ballot box reversals. Chancellor Angela Merkel—the queen of harsh economic policies—took a beating in the last round of German state elections.

The Obama administration could help halt Europe’s plunge from first world to second world status, but is has been largely silent on the austerity/debt formula. For instance, last summer an IMF study indicated that endless austerity would not only tank economies across the continent, but also increase the debt problem. However, that study has yet to be translated into policy, even though the fund’s current managing director, Christine Legarde, was the White House’s candidate for the post.

Much the same could be said for the World Bank. The U.S. nominated its current American president, Jim Yong Kim of Dartmouth College. Rather than stepping back from austerity programs, however, he recently warned developing nations not to use economic stimulus to improve their economies, because it would raise “indebtedness and inflation.”

So, while the U.S. Treasury Department has issued a few mild dissents about the efficacy of austerity programs, the two major economic organizations that the U.S. dominates have held the course—straight for the iceberg.

One thing the White House could do is endorse the call by Alexis Tsipras, leader of the Greek Syriza Party, for a European summit on the debt. Tsipras proposes that such a gathering could do what the 1953 London Debt Agreement did to help post –war Germany recover: cut the debt by 50 percent and spread payments over 30 years.  more
Jesse Jackson still thinks Obama may still have some empathy for Chicago.  Jackson has a big problem—his hometown Chicago is a murderous mess these days.  But my guess is that Obama doesn't give a rat's ass—he has moved on to bigger things and flashier friends.  The fate of Chicago schoolchildren is probably not so important to him as which neoliberal stooge he is going to appoint to operate the important levers of the economy.  We need a new Commerce Secretary, you know.
The Crisis in Chicago

Come Home, Mr. President


Chicago is in a state of emergency. Lives are being lost. Fear is growing. Local officials, ministers and community activists are working diligently but cannot break the cycle. We’re seeing more than one funeral a day. Our children are traumatized. Many are afraid to go to school.

In this crisis, we need the president’s leadership. President Obama can provide the knowledge, vision and inspiration to bring us together to address the crisis. He can speak to the children to calm their fears.

Mr. President, as you know, last week, 15-year-old Hadiya Pendleton, an honor student who performed in your inaugural ceremonies as a majorette, was murdered, slain when a gunman shot randomly into a group of kids gathered in a neighborhood park less than one mile from your home.

Last year in Chicago, more than 500 lives were lost to gun violence, 175 of those lives under the age of 18. As you know, Mr. President, we don’t make the guns here, they are imported — just as the drugs are imported and the jobs are exported. Children are at risk as a result. Eyewitnesses are too frightened to cooperate. Police brutality has eroded trust. Even those with strong families and strong discipline like Hadiya’s are too often the victims of this emergency.

The threat of violence accompanies the blight of misery. Less than 10 percent of low-income, minority teens in Chicago are employed. The wages of those who have jobs are not keeping up. Hadiya was attending the elite Martin Luther King College Prep High School and headed to college. But too many children are devastated by poverty and dropping out of school, headed to the streets.

The recession has destroyed homes as well as jobs. With mass foreclosures, plywood boards replace windowpanes. Abandoned homes shelter not families, but the desperate. Neighborhoods decline with the loss of hospitals, the closing of schools.

Mr. President, you inspired America with your inaugural call to honor the promise of Martin Luther King. In Newtown and in your gun-violence proposals, you have shown the courage it requires to lead.

After Hadiya’s shooting, more police were pledged to patrol the streets. But as you know from your time on these streets, Mr. President, you cannot police poverty. You cannot police broken dreams or shattered aspirations. Chicago has strong gun laws, but it cannot stop the flow of guns and drugs coming in and jobs going out.

You can issue the summons to America to face this challenge. You can reassure these children that America cares for them and values them, knowing, as you said in your inaugural address, that we are “true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else because she is an American, she is free, and she is equal not just in the eyes of God but also in our own.”

We know the fierce resistance you face in Washington, where powerful lobbies already are lining up to block gun-violence reforms. Yet, you have moved forward on gun violence, knowing that the summons to Americans is the first step toward overcoming those standing in the way.

So, too, it is with the crisis of Chicago and our cities. The resistance is clear. But by summoning the country to act, by showing the children that this country cares, you can make the first step toward action. You can ensure that Hadiya’s tragic death contributes not to a continuing spiral of violence, but to the first steps of renewal.

Come home, Mr. President, your city needs you. more
And Jesse? Even when Obama still lived in Chicago, Penny Pritzker was more important to his ambitions than you and your friends.  Try to understand that.

Billionaire Tax Avoider Penny Pritzker For Commerce Slot?

By Susie Madrak   February 07, 2013

Penny Pritzker, union buster.

Penny Pritzker, sub-prime lender who drove Superior Bank into the ground.

Penny Pritzker, Chicago Board of Ed members who thinks your children only deserve enough education to make them a member of the workforce.
Penny Pritzker, billionaire tax dodger.

Penny Pritzker, potential Secretary of Commerce nominee? Is this a joke?

Chicago businesswoman Penny Pritzker has emerged as a leading candidate to serve in the administration of President Obama, for whom she has long been a campaign supporter and top fund raiser.

A senior administration official cautioned that no announcement is imminent and that Obama has made no decision. But Pritzker is under consideration to serve as Commerce secretary or perhaps in another senior position involving relations between Obama and business leaders, according to officials close to the process who spoke anonymously to comment on internal deliberations.

Pritzker is a member of the Chicago family behind the Hyatt Hotels Corp. She has been a prominent Obama friend and supporter since his early days in politics and ran his 2008 campaign fundraising operation.

[...] Forbes’ annual list of the world’s billionaires last March put Pritzker at No. 719 and said her hotels and investments were worth $1.8 billion.

Be sure to watch the video, it's great. more

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