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Joke’s on the Middle Class. It Isn’t Funny. |
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A few years ago, he killed Bethlehem Steel.
Now, CEO Robert “Steve” Miller is hacking out huge slices from Delphi—and from the promises made to the men and women who grind out auto parts every day in return for wages, health care and pensions that keeps them in the middle class.
The 1990s were all about blockbuster CEOs with tough-guy names, like “Chainsaw Al” Dunlop. Dunlop, appointed CEO of Sunbeam Corp. in 1996, was hailed as a corporate “turnaround artist”—until he drove Sunbeam into the ground a mere three years later, with the company in such dire straits employees were paid from a revolving credit line.
Miller is one of those 1990s holdovers. He and his CEO buddies ushered in an era of false promises, such as the myth that massive layoffs, offshoring jobs and other “hard” choices ultimately would make companies—and, it was implied, the nation—stronger and better.
But as their greed grew, so did the brutality of their methods. Since the early 1980s, more than 30 million full-time workers have lost their jobs. CEOs make hard choices alright—hard for employees. Now, employees are laid off and their retirement security and health care slashed not to ensure companies will survive but for the greater greed of corporate chiefs.
In his just-published book, The Disposable American: Layoffs and Their Consequences, The New York Times economics reporter Louis Uchitelle calls this “the myth of a payoff.”
In exchange for so many painful layoffs…a revitalized corporate America will emerge, once again offering job security, full employment and rising incomes. But the promised payoff is not on the horizon. The layoffs continue unabated.
Miller, whose history of taking companies in and out of bankruptcy didn’t begin with Bethlehem Steel—and likely won’t end with Delphi—pushed Delphi into Chapter 11 bankruptcy and seeks to terminate the union contracts representing Delphi workers and impose draconian cuts and thousands of layoffs. His announcement to close plants, eliminate union contracts and abolish retiree medical and life insurance benefits also leaves 34,000 workers facing a 63 percent cut in wages and benefits and the threat of losing their pensions—and for many, their jobs. Those offered cash bonuses for leaving must waive their rights to retiree health care benefits.
While at Bethlehem Steel, Miller in 2003 terminated health and life insurance benefits for 95,000 retired workers and their dependents, dumping the pension payments on the federal Pension Benefit Guaranty Corporation (PBGC). He then liquidated the company with a bankruptcy judge’s blessing, selling its assets to the International Steel Group of Cleveland for $1.5 billion. Last year, the PBGC paid $3.7 billion to 682,820 retirees, many of whose pensions were abandoned in corporate bankruptcies.
While bosses such as Miller are hailed by the press as saviors of capitalism—The Times dubbed Miller the “Oracle of Delphi”—the bitter irony is their dependence upon government aid.
Even before he liquidated Bethlehem Steel, Miller suggested he again would look for government aid to “help save” the company.
“Government assistance and support will be required if we are to reestablish a vibrant and healthy domestic steel industry,” he told CNN Money.
And as Miller drags Delphi through bankruptcy, breaking the long-standing promise that built America’s middle class—a family-supporting wage in return for loyal, hard work—the company plans to reward 486 top executives with more than $500 million in cash and stock options.
Writing for Slate, Daniel Gross is among those who recognize such moves as fatal attacks on America’s middle class.
Through the New Deal and the Cold War, the grand bargain between government, industry and labor held fast. With pensions and paid vacations, factory work became a ticket to the middle class, providing home-ownership and comfort, job and retirement security, health care, and leisure.
In recent decades, however, this grand bargain has collapsed slowly—and in the case of Delphi, all at once.
Yet these CEOs, drooled over in the corporate media, held up as macho role models even as they whimper to the government to bail them out, are the same corporate chieftains who have broken America’s bargain.
And what role models.
So-called standard-bearers who value a quick buck over the future of thousands of individuals whose lives and those of their families are left without health care, retirement security or decent wages that ensure they work one job, not three. Even if that means moving the company overseas. Even if that means liquidating the operation and pocketing the cash.
Prima donnas who laugh at how easy it is to destroy companies. Referring to himself in a 2002 Stanford University profile, Miller brags:
On my first job as a chief financial officer, my employer lost $2 billion in 18 months…as a semi-retired corporate drifter, I’ve had the distinction of having served as chairman of not just one but three multi-billion-dollar companies that filed bankruptcy last year.
And Stanford University, his alma mater, adds with a wink, before going on to sing Miller’s praises, “Don’t forget Miller’s role in a $20 billion real estate collapse.”
CEOs laugh and the globalized corporate world laughs with them.
But the layoffs don’t end with manufacturing jobs. As Gross states:
Where’s it going next? Higher up the value chain to the companies that make the finished products.
The joke’s on America’s working class. And it isn’t funny.
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