GM's G. Richard Wagoner Jr. leading by example

THE ASSOCIATED PRESS

GM Chairman and CEO G. Richard Wagoner Jr.

News about more layoffs in GM's North American operations today — this time white collar workers — was not a huge surprise. Devastating, but not a surprise. It's no fun whatsoever to be laid off, especially in this brutal economy. However, what wounds on top of the layoffs announced by GM chair G. Richard Wagoner Jr. was the added detail that health benefits are being suspended for company retirees. GM justified this particular decision — apart from the need to raise $15 billion by 2009 — by saying the company would top up pensions from its "overfunded" pension fund to help compensate for Medicare and supplemental insurance.

Boy, there's a promise you can take to the bank.

It appears U.S. retirees are being thrown overboard. Canadian retirees would appear to be in a better place than their American counterparts simply because, with all its problems, Canada's health care system is not the same two-tiered monster in place in the United States. (Yet.)

In the first place, the U.S. Medicare system for Americans 65 years and over has been criticized for years for restricted care through a drastically underfunded plan. Some critics have warned it's in danger of going broke completely, a phenomenon that doesn't feel so absurd in a week in which the federal government is bailing out both huge mortgage funds, Fannie Mae and Freddie Mac. There's only so much money and gigantic debt, including the U.S. government's.

Worse, during many years based in Washington, I often saw notices in physicians' offices saying they wouldn't accept Medicare patients or that the plan was severely restricted. Often, it was simply a word-of-mouth understanding.

That's why GM workers negotiated health benefits for their retirees in the first place.

Granted, GM announced it is cutting cash bonuses. Without at least that, today's pile-on of bad news would have been grossly immoral. Still, although one strained to hear, what Wagoner did not say, was that he would cut his own base salary, or that other executives were stepping up to the plate. It would have been a significant gesture. According to analysis by The Associated Press, Wagoner's pay increased by 64 per cent to $15.7 million (including bonus) in 2007 — even as GM endured $39 billion in losses and the share price plummeted by $19. Besides, as the article reported:

"Compensation has become a shell game,'' said Richard Ferlauto, director of pension and benefits policy for the American Federation of State, County and Municipal Employees, a Washington labor group.

"So they take away the bonus,'' he said, "but then they still come up with ways to make sure the executive gets a big payout.''

Breaking the terms of a contract with the most vulnerable of your workers — seniors on fixed income — appears pretty heartless by executives who have made piles and piles of money out of their GM gigs over the years — especially when Wagoner announced today's plan was "a strategy to win" and not just one to "survive." 

Globalization and more tomatoes

While we're on the subject of tomatoes. . .

In the United States, tomatoes are believed to be the source of 145 cases of salmonella poisoning reported across 17 states since mid-April. The Food and Drug Administration reports 23 people have been hospitalized and the federal agency put out an advisory about certain types of raw tomatoes on June 7.

While no cases of salmonella poisoning have been reported in Canada, several fast-food chains pulled tomatoes temporarily from their menus as a precaution.

Finding the source of the tainted tomatoes is difficult. As David Acheson, FDA assistant commissioner, today told Bloomberg News: "The tomatoes must be traced back from stores to distributers to suppliers - it's very time-consuming."

The problem has become even difficult under harmonization and the streamlining that has been going on in North America over the past two decades, largely as a result of free trade initiatives.  As I described in my earlier post today, I came up empty when I tried to find the point of sale for particular Mexican tomatoes some years ago. I knew the field (town, state, country) where they were picked and the date of picking. I knew they'd been shipped to the U.S. , however, once there and likely reboxed, I had no idea where they ended up.

That's the problem , for health officials in the U.S. and Canada and for you - the consumer.

Globalization and Mexican child labour

A reason I began this blog was for the interaction I saw among readers in yesterday's comments on the "Peel me a grape" post about working conditions in Mexico and elsewhere. How does a consumer know who's treating employees well or what to buy? Great question from a reader, and one for which there are no easy answers.

It's research, research, research, hopefully aided by the media, and sometimes running into a dead end. It goes beyond companies assembling cars or televisions sets to involve what we we put into our mouths.

Let me give you you an example: I covered Latin America for the Star for many years from my base in Mexico City and once, en route to write about drug-trafficking in Sinaloa, I came upon children picking tomatoes in a field. The children looked as young as five, with little hands that could barely grip the tomatoes and, as they worked (30 or more) men drove rickety contraptions through the fields spraying pesticide, including on the kids. They were coated with the poisonous stuff.

It was an ugly sight, and the kind of thing you find only by chance. If you tried to set that story up, you'd be told there's no child labour in Mexico, blah-blah-blah-dee-blah.

Of course, I wrote about what I'd seen and photographed the children. Once back in Mexico City, I tried to find out where the tomatoes were going, but ran into a brick wall. They were exported from Mexico but, and here's the thing, it was to California where they were re-boxed and shipped out. I couldn't find out who handled these particular tomatoes — to underscore, even seeing the kids was purely an accident — nor could I find out where they were being sold to consumers. I called all the food importers in Toronto, the big food chains, even individual markets. I talked to importers and store managers. They could tell me most tomatoes came from the U.S. at that time of year but not whether they originated there. The same tomatoes I saw being picked by those children could have ended up on Canadian plates.

Food labelling laws have improved in Canada since I wrote that story in 1997. Still, when I look at produce that's labelled U.S., even from a particular company, it's no guarantee to me the original crop wasn't picked in fields south of the Rio Grande. By children.

There is a much larger problem with Mexico and other nations than the stories we tend to follow when Canadians are injured or murdered in a particular country, not that we shouldn't investigate these close-to-home stories. Globalization is a fact of life, however it's important to look at it from all angles, including the car plant workers who have no choice but to work for a couple of dollars an hour — or kids in the fields being prescribed eventual death through pesticide poisoning.

Peel me a grape y pronto! says Mexican auto-worker

Wouldn't it be refreshing to see context in stories that refer to the difference in wages for autoworkers in Canada and Mexico? A weekend story in the National Post/Financial Post on the changing nature of the Ontario economy — specifically the decline of the manufacturing base — highlighted this gap and pointed out:

"But no amount of money would entice auto manufacturers to pay Ontario workers $33 an hour when they can pay US$2.50 in Mexico."

True, it would seem, but then it's not the full story.

I don't fault Post reporter Jacqueline Thorpe for an excellent read on her basic thesis, which is the changing face of the Ontario job market to knowledge-based employment. Or Post reporter Nicolas Van Praet for an accompanying story that talks about the cuts bringing Mexican wages "down to near-Chinese levels." And the original report from Mexico was written by Associated Press correspondent Mark Stevenson, a respected veteran, so no problem with the numbers. Indeed, the facts are autoworkers' wages are being halved from a whopping $4.50 an hour in order to help secure 4,500 jobs at Ford's new Fiesta plant on the outskirts of Mexico City.

The context that falls off the table when events are transposed to Canada, however, is unions aren't free in Mexico. Instead, they are overwhelmingly under the government's thumb. The autoworkers, for example, are associated with the CTM (Central de Trabajadores de México), which is controlled by the government and notorious for stories of financial support for candidates picked by the presidential palace at Los Pinos.

Leaders who step out of line are harassed, kidnapped and, in extreme cases, assassinated. A few years ago, when workers tried to strike at a Volkswagen plant near Mexico City, the army opened fire on their front lines. Human rights abuses against union leaders and their membership in Mexico have been the subject of countless national and international human rights reports — as is oppression against teachers, left-wing politicians, religious workers, social advocates, students and anybody else who fights for decent working and living conditions and political and religious freedom. In Mexico, the essential trade-off that's occurred over the past 20 years is the central government in the Federal District (Mexico City) deals with international treaties, such as NAFTA, while the military runs the states, working with whatever power holds that part of the country, be it big landowners, industrialists, drug cartels, or any combination of the three. (This clearly is not meant to apply to everyone, nor suggest for a moment I am not in awe of valiant Mexicans who have fought against oppression for years, sometimes at the expense of their lives.)

As long as we continue to ignore these human rights abuses and intimidation against Mexican workers, we can blithely pretend they are giving up wage concessions with intelligence and foresight, in order to preserve jobs. All very civilized. No consequences whatsoever, other than job loss.

Workers in Canada should not have to compete with workers who are intimidated, beaten and killed in Mexico and other countries. Workers in other countries should not have to face these gruesome consequences.

This is not the normal give-and-take of globalization. It is not even close to the description by CAW economist Jim Stanford in Van Praet's story's of his union' struggle to "set a higher standard than who's the most desperate and who will do if for cheapest."

These are international human rights crimes and it would be heartening to see our governments — at all levels — recognize this fact. Companies that collude with oppression by closing their eyes to everything but profit motive should have to face the consequences of disillusioned consumers. At the least.

Let's stop pretending wage concessions in Mexico are just a matter of smart thinking across the bargaining table — although it's certainly smart to want to stay alive.