Over the past year or so, the US car giants have all been "crying wolf", in order to justify massive programmes of job cuts and factory closures. The truth, however, is that this is no more than an elaborate scam designed to impose drastic cuts on workers' conditions. The present article details some aspects of this scam as well as its consequences for car workers. It is compiled from various articles published by the comrades of the US Trotskyist group, The Spark, in particular from issues #791 and 792 of their newspaper.

The US auto companies claim to be in crisis. They claim they may go bankrupt. But this is a make-believe crisis, nothing but a big public relations scam, calculated to flim-flam the workers. The companies are trying to create a mind-set that the industry is failing and that the only thing workers can do, is get out now, with whatever they can. It's a big ongoing corporate swindle, a con job. Workers need to blow the whistle.

It started with Delphi

The Delphi Corporation has been in its phony bankruptcy for two years and some now. Well, fraud number one, that's not Delphi - it's a part of General Motors which changed its legal name. If youchange yourlegal name, do you get to walk away from those credit cards with your oldname on them? Well, of course not. But then, you aren't one of the world's largest manufacturing corporations. GM does what it wants.

Delphi in bad shape? Nonsense! There's a bidding war going on for it, a bidding war over how much money different financial groups will invest in this supposedly out-of-date, uncompetitive Delphi! Actually it's a fight to give Delphi money! But get this. The supposedly bankrupt Delphi told the judge it wanted only the smalleramount! Highland Capital had offered to hand over $4.7bn (£2.3bn) to this broke company, but Delphi told the judge it only needed the much smaller offer from Appaloosa and Cerberus, that is, $3.4bn (£1.7bn)! The size of these investment offers means that the big financial players know Delphi is not, and never was, going out of business. That's why Delphi stock started 2006 at 12 cents (6p) and today is $4.00 (£2.00).

What is this Cerberus Capital Management group? A so-called private investment company with not much more than a name on the door of some fancy Wall Street office. It makes nothing and runs no plant or equipment. GM is worth 26 times what Cerberus is worth. But behind Cerberus is Citigroup, the big Wall Street bank that provides capital - and instructions - to GM. This deal is a legal cover to guard GM's assets for as long as it takes to finish screwing the workers to the wall.

GM and Delphi made it look like the workers had no option but to take buyouts. They threatened plant closings - so workers would think they had better take the buyout now or they'd get nothing. They managed to chop off about 51,000 workers who used to get $28 per hour (£14/hr) and real benefits.

And then a strange thing happened. Only a few of the many threatened plants actually closed. New workers were hired to do the old jobs. But the new workers are paid only $14 or $16 an hour (£7-£8/hr) and NO benefits!

This was the original GM plan when it got Steve Miller out of retirement to be Delphi's Chief. Steve Miller knows nothing about producing auto parts for GM. But Steve Miller does know how to steer a phony bankruptcy, in order to dump workers' wages, pensions and benefits, and then make a bonanza re-selling the company's assets. That's what Steve Miller did with Bethlehem Steel. That's what Miller intends to do with Delphi. When the bankruptcy began, Miller said Delphi's bankruptcy was "well planned, well structured and well financed." Yes, a well planned legal swindle of the workers!

GM plays the Delphi card

GM itself tried the bankruptcy scam all during 2005 and 2006. It claimed to be "losing" $l0.6bn (£5.3bn) a year and claimed it was near bankruptcy. "Bleeding" cash, losing market share, because of... their workers' health care costs! GM mounted a huge media campaign to convince the workers that giant GM wouldn't last much longer. GM got top union leaders and the federal court to break the workers' contract in mid-term and take a dollar an hour away from active workers, and take health insurance premiums away from retirees.

Workers weren't supposed to hear the inside comments like those made by Jerry York, a GM board member. In fact Jerry York was just the spokesman on GM's board for a Las Vegas casino magnate, Kirk Kerkorian, who bought up 10% of GM's stock on the cheap, to speculate with. He said that GM's Chief, Rick Wagoner, had done a "great job warehousing cash." Yes, more than $50bn (£25bn) in cash and marketable securities at the time!

Anyway the scam played on, workers were taken by surprise, a vote was hustled through and narrowly passed. As soon as GM had the workers' money, their propaganda blitz disappeared! They didn't need to sell the product anymore. The $10bn (£5bn) "in the hole" wasn't worth a headline anymore and it just dropped off the news. GM got rich off the workers' concessions. As for casino king Kerkorian, he took his pay-off and split.

But it's never enough. GM is laying out plans to get still more concessions. This month at the Auto Show, GM Vice President Bob Lutz told reporters that GM was not the kind of company to be satisfied with only a few billion dollars of profits.

That's the first truth GM has told: big companies will not be satisfied with any amount of billions of profits. They will take, and take, and take, until they are stopped.

But for now, there are 85,000 or so GM workers swindled out of their full retirements and tricked out of their decent paying jobs because they were misled into thinking that GM was in meltdown.

Ford: "We're bankrupt too!"

Ford is well under way with its own copy of GM's trick-laden script.

Last year in January, they announced 14 plant closings and 30,000 direct job cuts by 2012 saying that its sales were down and it had "lost market share". This was later increased to 16 plants to close and 45,000, or even 51,000 jobs to go. Ford claims that so far, 38,000 workers have accepted "buy-out" offers.

Then in January this year, Ford said they were in "financial meltdown" too, and had lost a "record breaking" $12.7bn (£6.3bn) in 2006.

But if you read the fine print, you see that according to their own accounting figures, they "lost" $2.8bn (£1.4bn). All the rest of this so-called "loss", which amounts to almost $10bn (£5bn), was money for future spending, that Ford decided to put on its 2006 balance sheet. Money for buy-outs for example, that won''t be paid out until after 2007.

Why would Ford claim to lose a lot more money than it actually did? The answer should be obvious. Ford workers' contract expires in September. In fact the biggest previous loss, of $7.4bn (£3.7bn) for 1992, was reported in January 1993. 1993 was also a contract year. And by the way, the big investors on Wall Street obviously realised that this latest loss was a smokescreen because the day of the announcement, Ford's stock went up. The next day, up again!

Sure, Ford is pretending financial trouble. In fact it just made a big show of "mortgaging" its assets for loans - $25bn (£12.5bn) in loans. Actually, Ford Motor Co. has much more money than that, even. It's just in other places. It actually has nearly $34bn (£17bn) in ready cash, with $46bn (£23bn) available with their additional line of credit.

But the company makes the money, and then they take it out. For instance, in 2000 Ford Motor Company paid out a special dividend of $24bn (£12bn) in cash and stock to the Ford family and other major stockholders. Milking the company is a regular thing that they do.

The banks know that Ford's has the resources and so there's no problem getting these monster loans - and publicizing them. It's just one more part of setting up the scam.

Like a loan Ford Motor Company took out in 2002, for $5bn (£2.5bn), and from whom? From the Ford Capital Fund Trust Number 2. How much is in that fund? And what about Fund Number 1 and Fund Number 3 and how many others? Then there's Ford Motor Credit Company, where Ford sticks its profits, pretending it makes no money from producing and selling cars - only from loaning money to those who buy them.

Big companies stash money in places that aren't reported and aren't open to public examination. They have many ways to adjust the books as they wish - to show a profit, when Wall Street wants a profit, or to show a loss when they're scamming the workers.

Ford in trouble? It had no trouble putting its private fleet of jets at the disposal of Executive Vice President Mark Fields to commute to his Florida home every weekend: estimated cost about $3.5m (£1.7m) a year! When a local TV reporter wouldn't get off the story, Fields said - for the sake of window dressing - that he would fly commercial. Sure, for a minute or two. Forget the propaganda. The Fords aren't selling their yachts and mansions and multiple vacation homes any time soon. Well that's not strictly true. Bill Ford just got the Detroit and Ann Arbor newspapers to advertise the sale of one of his several mansions for free. Let's see - it is 6,500 square feet, has 5½ bathrooms, in-ground pool, tennis court, a gym...

Neither of course, did these "financial troubles" prevent the new Ford boss, Mulally, from announcing performance pay bonuses for executives. The top 2,300 are to get between $15,000 and $75,000 each (£7,500 to £37,000)!

But if Ford isn't in trouble, why is there this drumbeat of doom and gloom?

First, if you pay for as much advertising as an auto company does, the media will say what you want them to say. Notice how they quote the same three analysts all the time? Two of the three come from the Centre for Automotive Research, which is run by the son of a former GM chief executive. Who, incidentally, saw nothing wrong in Mark Fields' $3.5m (£1.7m) commuting expense! Even if a few reporters try to give the workers' side or just information, the reporters have their own bosses - the editors. And these editors know what will make their advertisers happy.

Second, what, above all else, are these companies good at? Mass marketing They know how to get you interested in that new Ford Edge when really, you couldn't care less. They put that same know-how into faking workers out of their jobs and benefits. One paper actually printed an account of how Ford hired marketing specialists and did focus-group research, the whole nine yards. It figured out the most effective ways to manipulate workers into taking buy-outs, costing most workers hundreds of thousands of dollars. (The paper was careful, though, not to print this until AFTER the buyout deadline.)

On 7 February there was an article in the Detroit Free Press, (which should probably be renamed "Ford Views") - it was entitled "Auto Bonds Upgraded"and ran as follows: "Investors should increase their holdings of automotive company bonds, because union negotiations may lead to cost-cutting and streamlined operations at Ford Motor Co and General Motors Corp., JP Morgan and Chase&Co says... The firm's debt strategists said they expected Dearborn-based Ford, and Detroit-based GM to win concessions from the UAW over wages and health-care benefits this year. An attrition program should also clear out older workers, reducing the risk of strikes, they said."

The vultures on Wall Street as well as the other major owners of the auto companies are circling for the kill, thinking they can take anything from the workers. But they may have a surprise in store for them. Workers in the Ford Rouge plant have already been speaking up against accepting any concessions and demanding to get back what has already been given up, circulating petitions on the plant floor. The workers will have a final say over what happens with their contract this Autumn.

But already Ford has brought in part-timers at $18/hour (£9/hr) and unlike before, when part-timers had the right to become full-time after 90 days, they were forced to sign a waiver of this right. The company is intending to outsource production jobs, for instance on Final, Frame and Engine lines in the Rouge plant in Detroit. And believe it or, not, it is saying it will build a wall to separate off these lower paid workers!

The talk is now that in the new contract in September, Ford will try to get the UAW leaders agree concessions which would include wage cuts for new hires, more health benefit and retirement plan cuts, and new flexible shifts which, among other things, would cut overtime costs.

However, workers will have noticed Ford Europe profits, up, Ford South America profits up, Ford Motor Credit profits up, Mazda profits up... It's like a big man in a suit who keeps pointing at the pocket labelled "Ford North America" and says he's got no money. But meantime all the rest of his suit pockets are bursting at the seams!

Chrysler: a little late to the party

Chrysler on the other hand, had "only" 12 straight quarters of profits. The Chrysler Group had moresales in 2006 than in 2005. So it's a tougher sell to the Chrysler workers, to make the company look like it's failing.

More to the point: after Ford and GM workers nearly voted down the concessions they were asked for - or even actually did - the companies and top union leaders knew they couldn't bring that vote in at Chrysler.

So Chrysler chairman Dieter Zetsche pouted, and told reporters, "It's a very strange position that we should first lose $10bn (£5bn) before we have the same as Ford and GM ... We will not stop before we get the results we need. And sure enough, the next quarter, Chrysler's books were arranged to show a very unexpected $1.2bn (£0.6bn) loss! And threats about cutbacks and sell-offs and restructuring started flying. And are still flying.

Then, on 14 February, DaimlerChrysler Corporation (DCX) announced, with great fanfare, the latest "restructuring plan" for its Chrysler Group. The company alleged huge business losses and threats from competition so severe that DCX might have to sell off the Chrysler Group to the highest bidder - unless, of course, workers give back large concessions in the coming contract negotiations and agree to leave quietly.

DCX is copying, in a more obviously staged way, the past manoeuvres of GM and Ford against their workers. First, hide the company's true financial condition. Second, fill the media with dire prophecies of gloom about the company's future. Third, announce plant closings and layoffs "expected" some time in the future. Fourth, offer to workers "buyouts" packaged to look like their best available option. Fifth, after the buyouts have been taken - return to business as usual, but with a cheaper work force.

GM has gone the full cycle. Ford is near the end of its "buyout" phase. And Chrysler is tagging along, having just announced one plant closing, maybe, 2 years from now, and the layoff of one production shift at each of two truck plants, maybe, this coming June.

It's nothing but sophisticated psychological warfare to persuade workers to give up even more of the few advantages that were won in past struggles.

Auto has always been a cyclical industry. Plants run flat out for a few years, then production falls off for a year or two, then the plants rev up again. While the company booms, workers get little extra compensation. When the company slumps, workers are supposed to take the hits.

It's precisely against these cycles that workers in the past won such protections as "seniority order" for layoff and recall, supplemental pay during layoffs, and job banks. The auto companies could easily fund these programs from their super-profits made during good years. They won't do it, not if they can take money away from the workers instead.

In fact, 2006 was still a great year for DaimlerChrysler! Its net operating profit was $7.3 billion (£3.6bn) DCX will pay its usual $1.88 (94p) per share dividend to the holders of its billion-plus shares. But US media have so far ignored this fact. Just as they have ignored the profits of DCX's Financial Services Division, which reported record profits for the fifth year in a row - profits on financing some 6.7 million vehicles, about 70 per cent of them sold in the US.

The media report only the alleged "problems" of Chrysler Group. Workers are not told the true situation.

DCX, as GM and Ford before it, attempts to frighten workers by floating rumours of selling off the company. Sold or not sold, what's the difference? Chrysler was sold to Daimler-Benz in l998. Chrysler bought Jeep before that. In 1980-82 the workers gave up huge concessions without the company being sold at all.

What matters is not who owns a company. What matters is how much workers decide to put up with - or not put up with.

The Chrysler workers have already, without being sold, given up deep concessions at local levels, pushed on them by their union leadership. Workers' break times were reduced. Contractors operate "independent" parts of the Toledo Jeep plant. Another plant runs a new shift with "enhanced temporary" workers who have no chance to gain regular jobs. The Michigan GEMA engine plant in Dundee opened just like a non-union shop, without respecting the usual work classifications and without allowing laid-off Chrysler engine workers the right to transfer in.

On the other hand, Chrysler workers have not yet been saddled with the dollar-an-hour wage cut and the new retiree health-care premiums rammed through at GM and Ford. After the resistance to the cuts at Ford, the union leadership decided not to risk rejection by Chrysler workers. The fight by Ford workers against the concessions last year, was enough to set back the corporate plans - at least for the moment.

The moment may pass - or it may be extended and enlarged on. Everything depends on how well auto workers can see through and resist the companies' games of psychological terrorism. And also resist their own union leadership's corporate cooperation.

High finance puts its sticky fingers in the workers' pockets

The companies are manipulating the workers into giving up good jobs, trading a little money for uncertain lives in a poverty environment, and the worker's kids will make little more than burger flippers. Why? So that the highest of financiers, the Morgans, Rockefellers, Mellons, the tiny few of the very richest families on earth, can book yet more enormous profits. The manufacturing companies are only conduits for those billions of dollars. The dollars flow up to the banks and super-rich investors who own millions of shares.

But in high finance, the returns are never big enough, the milk from their cash cows is never rich enough. If it's not a record year for profits, then it's a lousy year. Finance wants more. And more can only come from driving down the standards of living of the millions of us in the working class.

The attack on auto workers is important because of the pattern that auto sets for everywhere else. The companies think if they make auto settle for less then they can make all workers settle for less. It's a corporate campaign against all workers.

The union leaders have mostly decided to go along with the companies' stories. They have decided to help the companies in setting up their scams and swindles. As UAW vice president Bob King says, they have "consciously decided to forego the adversarial approach". Their policy is sometimes called "teamwork". Or ""co-operation". Teamwork with the bosses in making profits. Co-operation in sweating yet more out of us! The leadership believes - or actslike they believe - all the bosses' tales of woe. Like Bob King recently said "We have to go through these horrible things - the massive buy-outs - but we end up with a better product and a better company". But "we" don't end up with the "better company"! No, the companies and their shareholders end up with better profits and dividends, as if they needed them, which is the whole idea in the first place.

This is not the first time that workers have been scammed and flim-flammed and backed so far into the corner there was no other choice but to fight. What was the Great Depression? Big financiers protecting their wealth by closing plants and throwing workers on the streets to starve. What ended the workers' Great Depression? They got organized, they fought back, through little and big fights, until finally they could occupy the plants, take possession of the profit-making machinery and make it stop. They held it until the companies gave in. If there is a difference today, it is mainly that the financiers have even more money to meet our needs! But they only understand force. We are that force, we, the working class of this world, and it's long past time we start using our force, on our own behalf.