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From Labor Action, Vol. 14 No. 14, 3 April 1950, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
A couple of weeks ago Labor Action commented on the fantastic profits raked in by General Motors during 1949. It was pointed out in that article that the $656,000,000-plus reported by GM as net profit was only a portion of what the corporation had extracted from the labor of its workers.
If the whole net profit of the corporation had been distributed evenly among all wage earners and salaried employees of the corporation (including the president), it would have increased their wages by about 75 per cent.
Now it is a well-known fact that under capitalism no one could advocate such a distribution without being labeled a crackpot. Capital would not stay in an enterprise which distributes its profits to those who make them. The Du Pont family which took a cool $100 million out from General Motors when the last dividend was declared would take their marbles and play somewhere else ... and anyway the stocks on which the Du Fonts made their money have the controlling vote when it comes to deciding who will get what share of the swag.
So we won’t talk about the feasibility of a 75 per cent wage increase for the boys at GM. But how about some other sum, say a measly 33 per cent increase? Would that be crackpot talk too? Well, it all depends on how you look at it. The fact is that last year General Motors could have paid 33 per cent more to all its workers and still have cleared around $371 million in net profits.
It works out very simply. The total wage bill for GM last year was $1,440 million. A 33 per cent increase would have added roughly $475 million to it. Now would that have to be subtracted from the $656 million in profits? Not on your life. For the actual GM profit, before the federal corporations tax, was $1,093 million. (That’s over a billion bucks). And the wage increase would have come out of that long before the revenuers had got to it.
It would have left GM with a gross profit of some $618 million. The federals would have taken their 40 per cent off that, or about $247 million, leaving the GM stockholders to roll around in about $371 million. All the figures are rough. But the fact remains that GM could have given a flat 3 per cent raise across the board, and still made more for the fat boys than it had made in any previous year in its history except 1948.
Of course, that’s only a part of it. Last week the Chrysler Corporation astounded the world and gladdened the hearts of the boys on the picket line by announcing that they were shelling out some $2,581,000 in bonuses to 229 top executives.
Though Chrysler is a giant, it is a pygmy compared to GM, at least when it comes to passing out bonuses. As every worker at GM knows, that great corporation has a bonus plan too. “Its purpose,” says the GM Annual Report for 1948, “is to provide an incentive and reward for eligible employes who contribute to the success of the business, through making them participants in the success.”
Does a man sweating his life away on the assembly line “contribute to the success ...”? Well, maybe. But he isn’t an “eligible employee,” because to be eligible he has to make a minimum salary rate of $650 a month or $7,800 per year.
Well, not to keep you in suspense, in 1948 GM dished out. $40,979,700 in cash and stocks to the eligibles, and put aside some $9,563,000 for future distribution. And all that goes out before they figure their net profit.
There are quite a few figures in the above, but they can be studied with profit. Of course, it isn’t the same kind of profit which the eligibles and the big stockholders get out of it. But a realization of just what is being done with the wealth produced by the auto workers can lead to some hard thinking about what could be done with it if our great industries were controlled by the workers instead of by a handful of moneyed aristocrats. And that’s true, even if some of the thoughts turn out to be a little bit too subversive for Senator McCarthy and J. Edgar Hoover.
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Last updated: 27 January 2024