Socialist ViewPoint and analysis for working people

May/June • Vol 6, No. 3 •

Contradictions, False Analogies and Damn Lies

By Gregg Shotwell

I dressed in corporate drag: a dark gray suit and tie, black wing tips spit shined—and a gold watch I bought on the street on my way to do business in the Temple. The watch didn’t work but it sparkled, and appearance means more than substance when one is trying to pass inspection. I was about to hear Steve Miller give a speech to the Detroit Economic Club and for a soldier of solidarity it felt like an out of body experience. There wasn’t a trace of grease under my fingernails. All the bills in my wallet were laundered.

I was surprised by the light security. I coulda-shoulda stuffed my pockets with paint balls. I walked in unimpeded and took my seat at table number 49. I introduced myself to the assembled guests: management types in “communications” at Metaldyne; a couple thick skulls from GM Powertrain; and an investor whose suit cost more than my car.

I ate lasagna, salad, bread, and tiramisu. I felt warm and sleepy. The voices around me were soft. The ambiance was distinctly devoid of emotion or nuance. This must be what rich people (or Ron Gettelfinger for that matter) feel like all the time—amnesiac. I forgot about my comrades outside with picket signs. The wind hammered their faces with hard rain but I didn’t feel any pain, just a vague misgiving. I could see Miller. I estimated the distance as a peg from third base to first. I could have beaned him with a paint ball. Mentally I approached the dais, leaped over the table, and strangled him with my bare hands. I imagined murdering the remaining corporati with kitchen utensils while women screamed in the background and their men fainted.

Then we pledged allegiance and prayed to Mammon.

Miller began his discourse with a spate of jokes intended to appear off the cuff. His imitation of self-deprecating humor and spontaneity reminded me of diagramming sentences with Sister Mary Gertrude. No one got it. He was playing for the crowd but the hard edge of skepticism in Detroit is serrated like an old bucksaw. His punch lines couldn’t bridge the kerf.

How does the old saw go? Those who can manage a business do. Those who can’t file bankruptcy.

Gauging reactions of the crowd led me to believe the media hasn’t tapped into Miller’s noxious effect on investors, engineers, community leaders, and people who in one capacity or another are experienced in manufacturing. The victim of megalomania doesn’t suffer, everyone around him does. The power of self-delusion is inestimable. When Miller looks in the mirror he sees a full head of hair not a boiled potato.

The media portrays Miller as a straight shooter. Someone who tells it like it is and let’s the proverbial chips fall where they may. I don’t believe I was the only one in the room who heard the contradictions, false analogies, and damn lies. For example, he said the steel industry under his direction “endured a painful restructuring, but has been restored to health.”

95,000 retired steel workers, deprived of pensions and health care, have not been “restored to health.” In regard to the retired steelworkers Miller expressed disappointment. He said, “That dog won’t hunt.” (Making Steel, by Mark Reutter.)

Miller claimed he sleeps well at night because he knows he is doing the right thing. The self-righteous declaration was, I believe, his only sincere comment. He spoke from the heart. He truly believes he is doing the right thing—for himself. Steve’s World is a very small place. He does not see the damage left in his wake: the suicides, the broken families, the foreclosures. If it is good for Steve Miller then, “It is right and should be so.” (From The World According to Steve, by Steve Miller.)

In Steve’s World “all of Bethlehem steel mills are operating profitably with modern productive labor agreements. They are part of the Mittal group.”

In Making Steel: Updates [] author Mark Reutter cites an Associated Press report from August 2005. “Steelmakers are warning their shareholders and the investment community that results in the third quarter of this year are going to reflect a much weaker landscape.... Just 23 blast furnaces were operating in the U.S. at one point this summer, the fewest since a nationwide steelworkers’ strike in 1959.”

Reutter cites, a Wall Street Journal report that “the emergence of London’s Mittal family as a significant force in the U.S. steel market will diminish the bargaining power [of Ford and General Motors] and put further pressure on their efforts to control costs.”

Miller sold Bethlehem Steel to Wilbur Ross who made $1.185 billion off the bankrupt company and passed it on to Mittal for further exploitation. Mittal is praised by the business press for breaking contracts, sacking workers, and driving wages down. Currently, Miller’s fellow vulture capitalist, Wilbur Ross, is buying up auto suppliers.

Pain and suffering don’t exist in Steve’s World.

Miller warned at the end of his speech: “I fear something like intergenerational warfare, as young people increasingly resent having their wages reduced and taxed away to support social programs for their grandparents’ income and health care concerns.” It was one point on which Steve and I may find agreement—two-tier wages are socially degenerate.

Miller’s fear of “intergenerational warfare” did not prevent him from asserting that he wanted to “restore our underfunded pension plan out of future profits” which by his design is based on cutting wages for new hires—workers, I may add, who will not have a vested interest in a defined pension for their elders since they won’t have one themselves. The “intergenerational warfare” Miller foresees is not so much a fear as it is a plan. Miller won’t have to bust the union because the union will self-destruct if it adopts two-tier as a solution.

Miller contends it is vital that Delphi sustain motivation for employees. Apparently, he doesn’t get around much outside the tight circle of Steve’s World. He hasn’t seen the stunned and despondent faces of both hourly and salaried workers. He admits there has been a “brain drain,” an exodus of talent from the executive staff. He recognizes that Delphi needs to compensate people for their skills, knowledge, and experience. But he is unaware or minimizes the value of skills, knowledge, and experience on the shop floor. In Steve’s World “human capital” is a quantity to extort and debase, not a quality to revere and nurture.

In conclusion, Miller declared, “If we do this right, Delphi will remain one of the world’s premier global automotive suppliers.... If we do it badly, Delphi may be broken up into small pieces, and America will have lost some of its precious industrial treasures.”

Does he intend to “do it badly”? On March 31 Miller revealed his restructuring plan. Twenty-one of twenty-nine plants will be closed, sold, or consolidated. Is that not “broken up into small pieces”?

The auto industry could not absorb the closure of twenty-one Delphi plants in the next year. We should bear in mind that just because the straight shooter says something doesn’t mean he means it. Originally, Miller said he did not intend to file for bankruptcy. He set three deadlines which he backed down from. He set wages for Delphi workers at $9.50, $12.50, and most recently at $16.50. Dealing with Miller isn’t like buying a Saturn. Every time you visit the show room at Steve’s World you get a different deal.

Contradictions, false analogies, and damn lies are Miller’s stock and trade. The steel industry is “healthy”; pitting the young against the old “will restore” the underfunded pension; all skill, knowledge, and valuable experience is clustered in the office; and the sale or closure of 75 percent of Delphi’s U.S. operations does not mean Delphi “will be broken up into small pieces.”

Miller insisted that the press only writes about the people who are angry at him. We don’t hear about the people who are excited about Steve’s World and his vision for the future. We don’t hear about the people who want to make sacrifices for Steve’s World. No, we just read about “those people” across the street who think that the Delphi bankruptcy is a fraud.

Yes, he had to acknowledge the Soldiers of Solidarity. He said we have a right to speak out which is more generous than some of our local union leaders. He said his favorite picket sign was Miller Isn’t Worth a Buck. “It must have been a typo,” he quipped. It was a proud moment for me. I made that sign. My coworker, Juanita Cadman, has carried it in three protests in three cities. The concept came from another coworker who prefers to remain anonymous as do many in the dedicated ranks of the underground resistance. But he knows who he is and that his message got through to Miller and the Detroit Economic Club, too. Miller Isn’t Worth a Buck.

To be continued....

At the Detroit Economic Club Miller said that bankruptcy “is a growth industry in America.” It’s ironic that Miller thought the audience in Detroit would find his smugness amusing. I heard teeth grinding like a tranny that popped a drain plug.

He claimed the typical bankruptcy costs “about $100 million a year in professional fees.” He did not include the social costs, i.e., the losses to workers, investors, and taxpayers.

If we provide enough carcasses, the vultures will flourish and the restructuring of America—lost jobs, lower wages, higher health care costs, and defunct pensions—will create new opportunities for bankruptcy, the premier “growth industry in America.”

Welcome to Steve’s World where wealth is created not by labor in mining, agriculture, and manufacture, but by lawyers—which leads to the next question: fraud.

“I would just remind everyone that as embarrassing as that was to all concerned, the changes” (the changes? The euphemism “accounting restatements” is roughly equivalent to, I didn’t steal it, I borrowed it.) “had nothing to do with Delphi’s cash rebalances or operating issues. Even with flawless accounting, we’d be exactly where we are today.” Miller delivered this bold-faced lie with all the aplomb of a man telling children they were delivered by storks.

Had investors known the truth they would not “be exactly where they are today.” Had workers known in advance that Delphi would sell parts to GM below cost, they would have raised a hue and cry and struck before GM could spin the scheme to jettison Delphi workers.

Miller bragged how well Delphi was performing in categories of quality, delivery, and new business. So what’s the problem?

Labor contracts. Delphi he said, “inherited...tier 1 labor contracts that are substantially higher than the prevailing union contracts throughout the U.S. supplier industry.”

He neglected to add that Delphi inherited debt-free all the property, patents, products, machinery, technology, and expertise of a premier tier 1 supplier. Or that minus racketeering, the profit margins of tier 1 products are substantially higher than tier 2 products. He neglected to mention that the pension was fully funded and the labor contracts were not a surprise like the rise in steel prices. If labor contracts are the sole cause of Delphi’s demise, the Delphi bankruptcy was orchestrated well in advance.

“Delphi’s hourly labor costs have surpassed $78 for wages and benefits.”

“$78”? Every time Miller mentions labor costs we get a raise. Two weeks ago it was $76. How does this work?

According to Delphi’s Total Compensation Summary published in 2002 and 2004, total compensation rose $1.31 from 2002 to 2004. Since Miller took the helm it rises more than that every time he opens his mouth. The average hourly worker’s total compensation in 2004 (the last year that Delphi mailed a Total Compensation Summary to every employee’s home address) was $42.36 which included social security taxes. How did we gain $35.64 since 2004? In Steve’s World accounting is a dramatic art.

The second reason for Delphi’s failure was not the racketeering, i.e., GM demands that Delphi sell parts below cost, but rather “the decline in GM North American production volumes.” Miller ignores the fact that Delphi’s content per GM vehicle declined by design despite GM’s contractual commitment to invest $1 billion in new business with Delphi. Instead GM chose to divest in Delphi and thereby undermine American operations and hasten the bankruptcy.

Miller failed to mention that the Coopersville plant sells parts to China below cost. Creative bookkeeping is the magic wand of “restructuring.”

What is the solution according to Steve? Miller cites “five big restructuring variables.”

(1.) Reduce wages and benefits, and “address costly restrictions [outsourcing] and work rules [seniority] that inhibit productivity.” In other words break the union but preserve the [labor] bureaucracy as an arm of management to keep the rabble under control.

(2.) Financial assistance from GM [extortion] sufficient to cover the transformation to a sweatshop. Miller wants cash from GM. He wants the joint funds. He wants pocket money. He wants a new train set. Since he is the only player at the table with clean hands, he is certain he will get it.

(3.) :...[B]e global category killers.” He literally salivated over that garish phrase plucked from a B-movie trailer. The long and short of the “restructuring” is that Miller wants to cash out. He doesn’t manage manufacturing enterprises. He isn’t concerned with the long-term quality or efficiency of Delphi. He wants to chop it up, sell it off, and move on to the next carcass. This description of vulture capitalism isn’t speculation on my part, it’s Miller’s track record.

For those of you who believe in political solutions Miller cautioned, “in the final analysis there wasn’t anything any state could do to offset the underlying economics involved.” Capitalism is above the law, or perhaps I should say, it is the law. The court serves perpetrators not victims.

(4.) Reduce “about 25 percent of our worldwide salary workforce...and eliminate up to 40 percent of our current corporate officer positions.” This is typical of a Miller “restructuring.” It’s a quick way for him to make a million bucks and sleep well.

(5.) Miller purports to “honor our accumulated pension obligations, thereby avoiding termination of our pension plan.” Miller’s plan requires “a way to stretch out our required pension plan payments” and make the pension contingent on achievement of certain goals. This is the carrot. Those of you who have worked twenty-six years or less at GM-Delphi and are not eligible for the buy-off are expected to submit to wage cuts, increased health care costs, and elimination of work rules that make the job humane in order to get a pension that is worth less than a pimp’s promise.

I have 27 years seniority. Thus, I am eligible for the buy-off. Take the money and run is not a plan, it’s a scam. We already have a Benefit Guarantee. GM has a contractual and legal responsibility to provide pension, health care, and life insurance for Delphi retirees equal to the benefits enjoyed by GM-UAW members. It shouldn’t even be on the table. Furthermore, GM owes active Delphi workers seven years of pension credits. Shoemaker acts like he won something for us, when in fact the offer is less than we deserve. The purpose of the buy-off is to mitigate resistance by decimating solidarity.

The buy-off limits GM’s liability, it does not protect workers collectively, or individually. Since Gettelfinger broke open the door for takeaways from retirees, there is no genuine security. Retirement on a fixed income is a perilous prospect without a guaranteed level of health insurance. Furthermore, the buy-off means jobs will be sacrificed. How can adding to the burden of legacy costs balance the equation? The buy-off is a time bomb, not an escape hatch.

The isolation of Delphi workers is not a fight to win strategy, it’s a bound to lose maneuver. The Delphi struggle must be supported by GM-UAW members and framed in the broader context of social equity for all Americans. Delphi is not a skirmish, it’s a war with national ramifications we can neither avoid nor evade. Any deal that does not commit the corporations to advocate side by side with the unions for national health care is a hopeless half measure, a creature of dissimulation and despair destined to fail.

Mark Reutter wrote in an article for the Washington Post, (“Workplace Tremors,” August 23, 2005) “There is little evidence that court supervised reorganization produces a superior company. In fact, quite a few companies that come out of bankruptcy make a return trip, and there is growing evidence that the process diverts capital away from needed investments into the pockets of the restructurers.” Without national health care it is likely that Delphi will return to court to dump the pension. The hourly compensation Miller proposes cannot cover the legacy costs. It’s a sham.

Delphi is a test case. If Miller succeeds in breaking union contracts, bleeding pensions, and butchering the workforce while sheltering assets overseas, other multinationals including GM will follow suit. Bankruptcy will indeed become a “growth industry in America.” Would the French tolerate such treatment? Would Solidarnosc, the Polish union? Why should Americans? Capitalism in the U.S. has evolved to the point where the courts routinely sanction the transfer of wealth from the masses to the few as a social convention.

Miller spelled it out plainly when he said, “What is at stake here is the basic social contract in our traditional industries.” Miller intends to break that social contract so he can sleep well. Soldiers of solidarity intend to give him insomnia ad infinitum.

—Live Bait & Ammo # 71, 72, April 11, 2006

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