Friday, April 16, 2010

Workers, communities devastated as Auto plants closed, sold off and destroyed

By Martha Grevatt
Published Apr 14, 2010 5:52 PM

Few autoworkers have heard of Maynards, yet the company that brags of being “one of the pre-eminent liquidation, auction and appraisal companies in North America” is playing a major role in the current phase of capitalist restructuring — in this case “destructuring.” (

Liquidators such as Maynards typically buy on the cheap a plant that is closing and sell off the contents to any number of capitalist scavengers looking for a deal on this or that piece of equipment. Whatever remains gets sold as scrap or left to rust. Not only are the plant workers out of a job, but the potential for the plant to reopen under new ownership, re-employ laid off workers and restore lost tax revenue to the plant community is destroyed.

Maynards’ catalog includes dozens of closed and soon-to-be-closed plants in the U.S., Canada and Europe. The company is proud of its record — since 1989 Maynards has bought and auctioned off over 40 General Motors plants. More recently its client base expanded to include Ford, Chrysler and NUMMI, the GM-Toyota jointly operated plant in California.

On March 10 Maynards bought Chrysler’s stamping plant in Twinsburg, Ohio, where this writer has worked for over 22 years. Workers have known since May 1, 2009, of Chrysler’s intent to close the plant this year.

A number of auto parts manufacturers surveyed the facilities, fueling speculation on a potential new owner. The sale, approved the next day by a New York bankruptcy judge, crushed all hopes the remaining 400 workers in the plant had of finding work with a new employer. Chrysler has informed the union, UAW Local 122, that the plant will permanently close on or around July 30.

Despite the hurt felt by hundreds still working in the plant, Maynards has been inside the plant with potential buyers for the huge stamping presses. One new press typically costs around $40 million to buy and install. Maynards, which paid $45.5 million for the entire facility, hopes to pocket at least $50 million from the auction.

Up until the day of the sale, workers had been led to believe that the “New Chrysler” that emerged from bankruptcy would buy our plant back from “Old Chrysler,” the debtor-in-possession of eight plants and three parts warehouses slated for closing. These facilities were set aside as collateral to secure the $2 billion promised to lenders in the government-brokered plan to wipe out Chrysler’s $6.9 billion in debt. This was the balance owed on a $10 billion loan to the former owner, Cerberus, which borrowed the money to fund a restructuring plan that has eliminated tens of thousands of UAW jobs through technology and the moving of work to low-wage countries. Workers’ plants were then sacrificed to protect the investment of JPMorgan Chase, Goldman Sachs, Citigroup, Morgan Stanley and a group of hedge funds.

New Chrysler — now known as Chrysler Group LLC and headed by Fiat CEO Sergio Marchionne — would bid no higher than $40 million. After that cutoff amount the Chrysler board apparently determined it would be cheaper to buy only the presses it could use. The other player was Ray Park, a vulture capitalist who typically buys up “distressed” companies and then exits when they become profitable. Park was involved in the initial spinoff by GM of American Axle and left a few years later, a half-billion dollars richer. As the initial “stalking horse” bidder he was compensated $600,000 for losing the bid.

Workers’ labor created the wealth

The local union had gone to great lengths to make a business case to Chrysler management for keeping the plant open. The argument was that with only two stamping plants remaining, the company would not have enough press capacity to stamp out all of the body parts needed by the assembly plants. The strategy backfired. Chrysler simply realized it could purchase some of the presses from the Twinsburg plant and move them to other locations.

The city of Twinsburg will soon feel a huge financial pinch, with the loss of both property tax and employee income tax revenues. Firefighters, teachers, sanitation workers and others will likely be laid off. Dozens of municipalities in Northeast Ohio, where Chrysler workers reside, will lose even more tax revenue as well.

The assumption is that nothing can be done, as the sale is perfectly legal. But is it? A contract between the UAW and Chrysler, which workers modified under great duress, included huge concessions but retained a moratorium on plant closings. No exception was made for Twinsburg. In fact, specific new language called on the union and company to study ways to keep our plant “viable.” Isn’t the plant’s sale and its imminent destruction a contract violation? Shouldn’t the UAW have challenged the court ruling approving the sale?

Given the far-reaching impact on the local community, shouldn’t the mayor of Twinsburg, the Summit County commissioners and the governor of Ohio be pursuing a seizure of the plant on behalf of the workers and community through eminent domain? This is perfectly legal under Ohio law.

Every autoworker facing a plant closing needs to be asking these questions. Dozens of highly productive plants, acres and acres of floor space, billions in high-tech robots and machinery and endless miles of conveyor lines — all financed by the sale of vehicles we workers produced — are being sold off piecemeal or scrapped. It was our labor power alone that produced the capitalists’ wealth. The wanton destruction of the value we created must be fought. The plants belong to us, and we should fight for them.

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