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Saving the U.S. Auto Industry

Rolf A. F. Witzsche
June 3, 2006
Source: LaRouche PAC

[Source: auction brochures, calls, May 31]


The Muncie GM Transmissions plant noted in LPAC's
 list of closing plants in the ERA pamphlet (actually
Manual Transmissions of Muncie LLC) had virtually all of its
machinery auctioned off from May 16-18, at what apparently was
about 15 cents on the dollar of replacement value of the machine
tools and production machines.

According to the head of the Michigan-based company which
conducted the auction, the Muncie facility is a plant of some
600,000 square feet of production space, had 400 remaining
production workers, and was "one of the largest, if not the
largest, gear manufacturers in North America." Nearly all of the
roughly 500 machines and machine tools in the plant were sold in
the auction. They brought "in the range of $30 million" for the
entire plant-full. But many if not most of the equipment was
built and bought in 1995 or later; and many of these machine
tools have a {replacement value} of $500,000-$1 million each. So
the production machinery was auctioned off for perhaps 15 cents
on the dollar of the replacement value of the tools.

"The building will be empty now; it could go to repair
shops, or machine shops, or an office park," the auctioneer
commented. As to the pace of these sales, both he and one of his
employees also spoken to, said their company had been doing these
auctions for 15 years, and the pace of them has been pretty brisk
the whole time; but the {size} of the auctions has definitely
grown in the past two years or so, with large plants like this.

Said the employee, "We also see a lot of aerospace tools." 

Also see: Use It Or Lose It:
Auto Capacity
50% Unused and Going, Going, Gone

[Source: Detroit News 6-20-06; EIR discussion with Mayor.]


as the GM Anderson (Indiana) plant, built in the early
1950s, which produced generators but was closed by Delphi in
December 2005, was razed to the ground over the last three
months. Today this plant, which once housed 27,000 workers but
was reduced to 700 with the 1999 Delphi takeover, is nothing but
a pile of rubble and "6,000 tons of scrap steel," to be sold off.

The mayor of Anderson, in discussion with EIR today while
describing his plan to "diversify" job opportunities in the area,
revealed that the 30-year deindustrialization of the city has led
to a 60% collapse in its population -- in 1970, the population
was 70,000; today it is under 28,000. 




The website will make real to anybody the fact
that whole auto plants with their machine tools are now being sold off.
On the homepage of this website, under the heading, "Look at
the next 288 sales," the first item is the current online web
auction of "DaimlerChrysler-Sale #30, Major Automotive Stamping
Facility, with Metalworking and Machine Tools," in Toledo, Ohio.
The auction concludes today, Friday.

If one clicks on "Recently closed auctions" at the top
of the homepage, and scrolls down to "D", three Delphi machine
tool plant sales from April and May are listed, including the
entire machine tool inventory of the Delphi electrical plant in
Irvine, California--which was sold off on Tuesday. Other Delphi
auctions in April included machine tools from Dayton, Rochester,
Athens, Alabama, and Flint, Michigan, and Sale #22, Delphi
Battery Manufacturing Equipment in Indianapolis.

These pages can be printed out for "shock value" in meetings
with legislators, or emailed directly with great effect. 

[Source: calls, Congressional Record]


An auctioneer of machine-tool inventories of closed industrial
plants -- himself a former defense aerospace worker 
-- cited two dramatic previous examples, within the past
decade or so, of the destruction of American machine-tool
capacity by selling it off from closed-down plants. These
previous crimes have led to the currently ongoing, largest crime
against national security and economic progress -- the break-up
and auctioning of the auto sector's machine tools.

First, "After the Wall came down, 60 million square feet of
aerospace/defense, and all its tools, was auctioned off in eight
years [i.e., 1990-97]--it was scary." So in case anyone was
thinking that despite the loss of auto, the defense sector is
still out there, deep in machine tools, forget that delusion. And
secondly, in late 2004, "the government's machine-tool reserve in
Stockton" California was auctioned off almost in its entirety. We
are researching the history and "chain of command" since World
War II of this reserve machine-tool surge capacity, known as the
defense industrial reserve. It was apparently changes in the
Defense Authorization Act just after Dick Cheney and George W.
Bush took office, which led directly to the order by Defense
Secretary Rumsfeld to get rid of this national machine tool surge
capacity, by auction.

Now in the wake of these crimes, a larger one is taking
place: Whereas the aerospace capacity sold off was 60 million
square feet in eight years, the list of closing auto plants
constitutes 80 million square feet of machine-tool capacity,
going {in two years}. As the source put it, "This is the last of
the down-sizing of America." And he added, most of the auction
buyers are foreign firms.


[Source: Buffalo News 5-27; contact call]


Lawyers for Delphi corporation admitted in bankruptcy
court in New York on May 26, under questioning by the attorney
for the IUE, that Delphi's actual bankruptcy "reorganization
plan" is to leave {only 6,000 production employees in the United
States, compared to 9,000 salaried employees, and with 140,000 or
more employees outside the United States.} As union and other
sources had suspected, Delphi's management under pirate CEO Steve
Miller envisages the United States solely as the corporate
headquarters for a global parts producer, all of whose production
will have been out-sourced to lower-wage markets around the

It is notable that the current production workforces of the
eight plants Delphi has claimed it is {not} closing, combine to
over 12,000. Thus, more than half of of the workers at those
plants are also to be laid off indefinitely or eliminated from
the industry by early retirement.

Bankrupt? Delphi's "chief restructuring and financial
officer" John Sheehan acknowledged in court that the company had
$3.6 billion in cash on hand and readily available credit at the
end of April -- still very close to the figure charged in an
{EIR} interview last year.

Pushed by attorneys for shareholders, Sheehan claimed that
if given authority by the judge to tear up its union contracts,
it would use the authority only as a last resort -- "Those days
are still in front of us" -- but would not agree to any set
period, no matter how short, during which it would not void the

[Source: Detroit Free Press 5-26]


According to a UAW spokesmen and other sources reporting
informally, the GM-funded "buy-out" program to get auto
production workers out of the industry, has already gotten 30,000
GM and Delphi workers to retire -- 20,000 from GM, and 10,000
from Delphi. The GM figure was announced by Richard Rupert,
assistant to UAW vice president Richard Shoemaker; the Delphi
estimate came from a UAW local president. There is still almost a
month remaining for more employees of both companies to take the
buy-out, so easily 40,000 may be eliminated from the industry,
out of 140,000 who were offered the buy-out. GM had originally
said that it aimed at 25,000 retirements of U.S. workers by 2008,
but on May 26 a spokesman said the company is "pleased" that it
will likely lose that many by next month.

Absurdly, not only is Delphi now hiring temps all over the
country -- including at plants not closing, like Lockport and
Rochester, New York -- but so is GM. This temp hiring, explained
as necessary to replace the unexpected numbers who are retiring,
will increase; so GM and Delphi are creating another, lower-wage
tier which will be an accomplished fact at the negotiation of the
2007 UAW contract. 

[Source: Assoc Press, Detroit News, Wall St Journal 6-8-06]


This entire week's sessions of bankruptcy trial in the
 Delphi case were put off by Judge Drain at requests
of several parties, while negotiations took place on another
large-scale "buy-out" of workers into retirement from the auto

20,000 GM workers and more than 9,000 Delphi workers have
already taken early-retirement buy-outs -- all paid for by GM --
under an earlier offer. Now, Delphi wants GM to pay, and the UAW
and other unions to accept, a "sweeter" buy-out -- also paid by
GM -- that would get as many as 10,000 more, younger workers to

Underneath all the breathless "agreement near" press
coverage, this is nothing but the dismal attempt to drum out
10,000 more skilled production workers, giving up their present
jobs, future pensions, and their healthcare benefits, in exchange
for a lump-sum of perhaps $100,000-plus. Because Delphi has made
clear the many plants which are to be closed under Felix
Rohatyn's globalization plan, it expects that even younger
workers in those plants, working in the auto industry for less
than 10 years, will take the money and get lost. If they do,
Delphi's Rohatyn plan will have rid the company of 20,000 of
33,000 production workers; it will then be able to "calibrate"
what wage cuts and additional lay-offs it needs, and "negotiate"
these with the unions.

LaRouche's emergency legislation would stop all this in its

[Source: wires (June 22, 2006)]


GM has bought out over 25,000 of its own workforce, and expects to reach
30,000 or more by end of this week. Delphi, with GM money, has bought
out 10,000, and has targetted another 10,000 in the second stage
of its buy-out program, now targetting younger workers with less
seniority. Ford expects to have bought out 9-10,000 by August. So
the total would easily reach 60,000 production workers booted out
of the auto industry in less than three months, from late May
through early August when Delphi's next bankruptcy hearing takes

GM today postponed issuing its financial report because of
ongoing spending on buy-outs, which may total $3-4 billion
already, and hit $5.5 billion when the buy-out programs reach
their deadlines.



In March of 2005, Lyndon LaRouche warned that General Motors
was facing imminent collapse. He called for Congress to
intervene with an emergency reconstruction policy designed to
save the industry as a whole, as a crucial component of a drive
for overall economic recovery. He proposed that the federal
government intervene by placing the productive capacity of the
industry into government-supervised receivership, and then fund
the retooling and expansion of that capacity to supply the
components of desperately needed national infrastructure
projects. He stressed that any liquidation of the present
structure of the physical productive capacities of the auto
industry, especially its machine tool sector, would do
irreparable damage to our physical economy and mean not only the
end of the U.S. as a leading physical economic power, but would
also result in related kinds of chain-reaction damage to the
world economy as a whole.

The world financial system is already in a state of mixed
hyperinflationary and deflationary collapse, which necessitates
instituting an FDR-style recovery program to save civilization.

The Congress's failure to act then has brought us to the
point that today, 65 major auto sector plants, with over 75
million square feet of machine-tool capacity are being shut down
this year and next. These shutdowns will cost 75,000 skilled
industrial jobs directly, and 300,000 more through immediate
radiating effects on smaller supply plants and machine tool
shops. What is about to be shut represents the capacity to build
over 2.5 million cars and light trucks a year. But, more
importantly, in terms of urgent national economic investment, it
represents a unique industrial capability to build an urgently
needed new national infrastructure of transportation, power, and

LaRouche has authored a statement of principle called 
The U.S. Economic Recovery Act of 2006
. It calls on Congress to
intervene to save our auto capacity NOW; to retool the 50% or
more unutilized capacity of the auto industry for production of
new national infrastructure, particularly high-speed rail
corridors and new electricity grids centered on nuclear power. It
gives us the opportunity to save ourselves; to turn our nation,
and the world, onto a course of prosperity, and away from the
current descent into a New Dark Age. Already, state legislatures
in Alabama, Vermont, and Rhode Island have weighed in with
memorials to Congress demanding that Congress enact this
retooling legislation. They have been joined by city and county
councils across the nation's industrial heartland.

We urge members of Congress, regardless of party affiliation
or geographic origin, to enact the urgently needed emergency
Federal legislation specified in the U.S. ECONOMIC RECOVERY ACT
OF 2006 to prevent the threatened immediate collapse and shutdown
of the physical productive capacity of the U.S. auto sector and
to put our nation on the road to becoming, once again, the
greatest productive economy in the world.


* In Washington, D.C. LYM squads ran into 4 Congressmen and
one Senator in the halls and gave them the legislation pamphlet.
There were also 4 meetings held in the House of Representatives
and one in the Senate. Two meetings were set-up for next week,
including one that is a follow-up meeting to one that was held
today. Generally the discussions centered around the auto
legislation, the need to retool for nuclear power, and the hoax
of ethanol.

* In the Midwest, two squads went to Lansing to visit the
Michigan State Legislature, and into Saginaw, to deploy at a post
office and to visit the Delphi plant, which have about 3,000

Our Lansing crew had a few meetings set up between the House
and Senate. The first meeting was with an aide to a Republican
who is pro-globalization. He brought up the fact that although
we're shutting down auto plants, they're still going to be there.
He also mentioned that the unions shouldn't pay the autoworkers
more than the janitors, since they're considered unskilled labor.
He also said that skilled labor belongs in other countries,
because we can get the labor cheap. The second meeting with an
aide to a Democrat who co-sponsored LaMar Lemmons' resolution to
save the auto sector. She was very curious about the youth
movement, how did we recruit young people, and really asked a lot
of questions, including how would you get the youth to work. We
also met with a legislative aide for a Republican who was really
into free market economics, and said that defending teh auto
sector is out of the question, but asked how does one defend the
General Welfare?

In the Michigan house, the staff member in one office said
their boss used to work for Delphi and that he lives near Flint.
She took the lit and is going to try to set up a meeting with the
Representative himself. In one Democrat's office, the CoS is a
young guy who's into LaRouche and tried to engage his boss in a
dialogue around LaRouche's ideas, but the boss just shy away. The
guy knows someone in the office of a Michigan Congressman who
reads LaRouche.

* In Saginaw our team deployed to a post office and
generated 10 contacts in two hours. There was overwhelming
support for bringing back physical production to America. People
took bundles of literature to hand out, including a retiree, and
one at the Delphi plant. Calls were also made to the Mayor's
office, City Councilmen, and a city manager who works in Carl
Levin's office in Saginaw. Then, they headed off to the Delphi
plant, where they have about 3.000 workers. The crew was there
for a half hour. The people were receptive, but were in some
kind of fantastic delusion. Mostly everybody took literature,
including one guy who was surprised that LaRouche was still
around. He remembers LaRouche from when he was working on
Reagan's campaign in New Hampshire from 1980. They ran into a
Republican who's running for Congress and is a fascist. He said,
"FDR is the second worst President next to Lincoln."

* In Canada, 4 LYM from Montreal deployed to the Brampton
Chrysler Assembly Plant to get literature out to the coming and
going, 6-7:00 a.m. shift. We got out 250-300 copies of The
Emergency Legislation act, and a statement titled "Retool and
Rebuild!!," a statement that was written by one of the youth that
outlines what actions the Canadian Government must take to act in
accordance with the U.S. government to save the machine tool
capacity of the U.S. and Canada to rebuild the physical economy
of the Americas. The statement is available on the WLYM website
under Canada. Surprisingly, there were a lot of youth working at
this plant and the response from them was good. There were so
many people surrounding the LYM at one point they were handing
out 10-15 pamphlets at a time and having the workers hand them
out among themselves. The plant employs somewhere around 4,300
auto workers.

The youth met with a contact from CAW local 222 in Oshawa,
after arranging a follow up meeting at the workers request. This
is a young man, 24 yrs old, which made a big difference that
enhanced the quality of discussion around industry and economics.
He agreed to take extra literature to get out at his plant, and
happily took 100 copies of the Legislation, 50 copies of Lyn's
Prolegomena, and a stack of the Retool and Rebuild statement.
There is another meeting set up for next week.

* On May 20, 10 Boston LYM hit a big union picket line in
the financial district of downtown Hartford, Conn. Mostly
Ironworkers Local 15 and Laborers Local 230, they were protesting
some very harsh pension and wage policies from ING (a financial
corporation). "Who's the rat?! -- I N G!!!" There were a total of
200-250 workers there, and we made nearly 50 contacts (20% of the
people there).

* On the West Coast we set up a meeting with a
representative's office to discuss LaRouche's auto legislation.
We spoke to a director of organizing for an aerospace machinists
local with a statewide membership of 50,000 people. We are
calling labor unions and Democratic County chairs.

* In Norfolk, Va. two organizers and an employee from a
plant that is being shut down attended and addressed the City
Council on the auto resolution. 100 people were in attendance.
* In calls from the NCR to Indiana, a UAW member, who is a
Democratic County chair and editor of a local union newspaper
took 30 pamphlets and gave the name of her UAW president as a
lateral who is taking 200 pamphlets to get out. A UAW President
received 50 pamphlets to get out. He was briefed on that fact
that the foundations which financed the impeachment drive against
Clinton also fund the DLC. His response: I didn't know that.''
Another UAW president said he wants to talk to the UAW first on
the legislation, but said: ``I agree 100 % with what you're
saying. I've disagreed with National before." 

The European Imperial driver behind the destruction of U.S. industries.

The fact that the destruction of the USA is orchestrated from the old European imperial background is evident by the rooting of the top people in that background, who run the destruction of the USA's industries. The evidence is right out in the open. 

See the comprehensive WHITE PAPER by LPAC (LaRouche Political Action Committee) "Rohatyn: The French-Nazi Connection" (pdf file). 

Also see from LPAC: Outsourcing Delphi:The Crime of Felix Rohatyn

[sources: Nov.-Dec. 1995 {Program Manager}; Gotbaum bio; {EIR}]


Joshua Gotbaum, the son of Synarchist New York labor leader Victor Gotbaum, was
turned over at an early age to Felix Rohatyn, who made him his
protege, training him to decimate the U.S. agro-manufacturing
base. Joshua Gotbaum joined Lazard in 1981; under Felix's
tutelage, by 1990, he was made General Partner, and from 1989-92,
was the Managing Director of the U.S. branch of Lazard's London

In 1994, Gotbaum was inserted as the Assistant Secretary of
Defense for Economic Security, a newly created post, with a
260-person staff. In a geometry in which defense expenditures
were slashed, Gotbaum applied pressure to shut down aero-space
factories, and took opening steps to implement Dick Cheney's 1992
policy of privatizing the military. During the 1990s, roughly
one-third of the aero-space sector was liquidated, a sector in
which was embedded invaluable advanced machine-tool capacity.

Gotbaum outlined his mission in the November-December 1995
issue of "{Program Manager} magazine. The article has three
headlines. The top headline is "Survival of the Fittest". Another
headline is "Which Defense Firms Will Survive--Meet the Man Who
Helps the Pentagon Decide." Asked about his skill at Lazard
Freres in putting through mergers and bankruptcy restructurings,
Gotbaum stated, "As the defense industry itself restructures,
companies that have been our suppliers for years are combining;
they are restructuring, combining plants, laying off employees,
etc., so there is an industry restructuring. Similarly, as the
defense budget declines, the Department of Defense is itself
restructuring.... [W]e've discovered now is that in some respects
the defense industry is undergoing restructuring that other
manufacturing industries... began in some cases, 10 or 15 years
ago... I spent a lot of time in restructurings."

An example of what happened: in 1994, Northrop bought
Grumann. In Beth Page, New York, Grumann had a plant that
produced airplanes for the Navy for 50 years. Now, it is empty.
The number of defense firms was shrunk down to a handful today.
Gotbaum also began trying to implement the
Cheney-Halliburton policy plan of 1992 to outsource, leading
utlimately to Private Military Corporations. Gotbaum bragged, "So
one of the challenges for the Department of Defense in the future
is how to take advantage of technologies like communications,
computers, and computations... [so that]... most of the [DOD's]
research, ... investment, [and] development, will be done
primarily in the commercial sector."

Gotbaum also led the Pentagon's development of the list of
base closings that were sent to the Base Realignment and Closure
Commission (BRAC) of 1995, and then he implemented the closings
approved by the BRAC and Congress. In the Program Manager
interview, Gotbaum pontificated, "The BRAC is another arena in
which the Department of Defense is reconciling itself to the new
realities. The way we fight wars is changed;... So we consider
base closing to be necessary--but very painful." 

[sources: Lazard reports; 1/7/04 {Honolulu Star Bulletin}; {EIR}]


{Honolulu Star-Bulletin}, no doubt using information that Joshua
Gotbaum provided to it, stated, "Gotbaum was an investment banker
with Lazard Freres & Co. in New York and London, providing advice
to airlines on mergers, acquisitions, bankruptcies, and
restrucuring. He consulted with Eastern, Braniff, Pan American,
British Airways and Air France." This is quite a record: Eastern,
Braniff, and Pan American entered bankruptcy; Eastern and Pan Am
were liquidated outright.

But this is just for starters; there is also the further
work of Lazard. In 1994, Lazard advised United Airlines on an
ESOP (Employees Stock Ownership Plan), in which United employees
received 55% of United Airlines' stock, in return for them making
huge wage and benefits concessions. At the time of the ESOP,
United Airlines' chairman was Stephen M. Wolf. After the ESOP was
consumated, United's CEO Wolf went to work for Lazard as an
advisor. A few years after the ESOP went through, United filed
for bankruptcy, and the stock that the workers received became

Furthermore, in a Lazard Freres press release of May 9,
2006, on their First Quarter 2006 earnings, Lazard reported that
it is carrying out restructuring plans for the Northwest Airlines
Creditors Committee and for Olympic Airlines.
Just between Lazard and Joshua Gotbaum, there are {9
airline companies} that we know of, to which they were
consultants. Seven of these airlines ended up in bankruptcy, most
of which Lazard restructured. Lazard is at the center of the
take-down of America's air network. 


During the 1970s, Joshua Gotbaum's father, Victor, 
was head of New York's AFSCME local 37. Victor
played a crucial role of blackmail and thuggery against the labor
movement in New York City to impose Big Mac.

In 1975, under manufactured emergency conditions, using
Notverordnung decrees, Rohatyn suspended the power of New York
City's elected government, and set up the Municipal Assistance
Corporation fascist dictatorship. Victor Gotbaum would meet with
Rohatyn and a few other bankers at the Regency Hotel, where they
decided the policy of Big MAC, making Gotbaum even more powerful
than the formal members of the Municipal Assistance Corporation
Board. During 1975-82, Rohatyn and Gotbaum cut down every vital
service needed for human existence-- fire, transit, hospitals,
police-- by between 15% and 40%, and decimated and depoulated New

It is likely during this period that Joshua Gotbaum was
turned over to Felix Rohatyn. Thus, Joshua Gotbaum is the
Rosemary's Baby produced by the illicit marriage of Victor
Gotbaum and Felix Rohatyn. 

[Source: Wires, June 20, 2006]


  This week, John Kornblum's Lazard Germany has begun a
new "consulting" drive into the capital goods sector, carried out
by Eric Fellhauer, an acquisition that Kornblum made from the
Carlyle Group Germany, where Fellhauer worked as a specialist for
such operations. Fellhauer was crucial in some spectacular deals
of the recent years: Tchibo's sale of its Reemtsma branch; the
purchase of Buderus by Bosch; the acquisition of ATECS by
Siemens; the mergers of Krupp and Thyssen (where Kornblum is on
the board now), and of Daimler and Chrysler.

The transfer of Fellhauer, who worked for Merril Lynch
before joining Carlyle, is typical for the osmosis between top
personnel of the leading firms of the "investment" branch: Lazard
has recruited a lot of former Carlyle and Merril Lynch officials,
and vice versa. Carlyle Germany on its part has focussed a lot on
the supply sector of the German automotive industry, holding
shares in some of the leading specialists there: Fennel
Technologies; Heinze Technik; DGTH; Honsel International
Technologies; Edscha AG; Beru Group. 


About LaRouche - the American economist and statesman that has become a legend in our time in the fight to advance civilization, protect mankind, and create a new renaissance: 

" We are at a point in world history. 
At the present time, the international monetary financial system
of the world is in the process of disintegration. That does not mean the end of the world. It means that we either make certain changes, or this
planet will go in fact into a prolonged new dark age, comparable
to what happened to Europe during the middle to late part of the
14th century." (LaRouche, June 15, 2006)

About the series:  Truth versus Guns,
 presented by Rolf A. F. Witzsche

About Rolf A. F. Witzsche

Rolf A. F. Witzsche, is an independent researcher, publisher, and author of eleven novels. The novels are focused on exploring the Principle of Universal Love, the principle that is reflected to some degree in every bright period throughout history, with the added challenge for today to give our universal love an active expression with a type of 'Universal Kiss' for all mankind. 

Novels by Rolf Witzsche

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