State of the Union August 31, 2010

August 31, 2010 online at www.uawlocal2250.com

From the Wall Street Journal: An independent health-care trust for retired auto workers will place $6 billion in the hands of two investment firms, one of the first steps in the trust's move to shift part of its billions of dollars into more-passive investing. The Retiree Medical Benefits Trust for the United Auto Workers union will divide the $6 billion equally between Boston-based State Street Corp. and BlackRock Inc. of New York, according to Eric Henry, the trust's chief investment officer. Mr. Henry said in an interview in his Ann Arbor, Mich., office this week that the money overseen by the investment firms would be placed into global equity index funds by year-end. The decision on the stock is controlled by an independent fiduciary and won't necessarily mirror any decision by the U.S. government over its controlling stake in GM, according to Mr. Henry. The trust is also in the midst of a new asset and liability study to estimate the money it will need to have to provide health-care services for retirees and their spouses. "It's a difficult question to answer," Mr. Henry said, whose funding need has been earlier estimated at $57 billion. The fund expects significant cost savings from its ability to exact discounts from health-care providers based on its buying power. Mr. Henry said the trust anticipates that it has enough assets to cover its current liabilities.

From the Fort Worth Star-Telegram: General Motors intends to keep its Arlington truck assembly plant working long hours through the rest of the year. The facility will continue to work five-day weeks and two Saturdays a month through December, GM told employees last week. It produces full-size sport utility vehicles, which have come back in consumer favor after being hammered by high gasoline prices two years ago. "We continue to have strong demand for the vehicles we produce," said Donna McLallen, a plant spokeswoman. The plant has about 2,500 employees, including 2,300 production workers.

From Automotive News: Falling demand for the Smart two-seater in the United States means Daimler AG’s microcar brand likely will sell fewer than 100,000 units of the microcar globally this year, down from 114,000 in 2009, a German magazine reported this past weekend. According to Daimler numbers, U.S. sales of Smart cars fell nearly 70 percent to just under 4,000 in the first seven months. July sales were 560, down 60.5 percent compared with July 2009. Smart sales globally fell just over 20 percent to 8,400 in July, with volume down 17.4 percent to 59,100 in the first seven months.

Rebuild America: A Program for Jobs, Justice and Peace August, 2010

The magnitude of today’s job crisis cries out for bold action to put Detroit – and America – back to work. Our country’s “jobs deficit” – the number of jobs we need to return to the 5 percent unemployment rate that prevailed before the recession began, factoring in labor force growth – stands at 11.5 million. If we’re to return to 5 percent unemployment within 3 years, we need to be creating, on average, nearly 450,000 jobs per month. Returning to a truer “full employment” level of 4 percent unemployment would take even more.

So far this year, monthly job growth has averaged just over 90,000. In Detroit, almost 90,000 men and women are officially unemployed, a staggering 24 percent of the workforce. But that’s just the tip of the iceberg. Thousands more want to work, but have despaired of finding employment and given up looking. Others are working short hours, or have had to settle for part-time jobs because full-time work was unavailable. Including these discouraged and underutilized workers, a conservative estimate of the real level of unemployment in the city of Detroit would be 157,000.
At the same time, America has at least $2.2 trillion in unmet infrastructure needs, even after the modest $130 billion in infrastructure spending that was included in the American Recovery and Reinvestment Act. Investing just $220 billion (a tenth of the need identified by the American Society of Civil Engineers) in renewing and modernizing our nation’s infrastructure would increase GDP by $345 billion and add roughly 1.7 million much-needed jobs nationally.

Urban areas have a special stake in infrastructure investment – and any serious program to modernize our country’s infrastructure has a special stake in urban areas. Targeting urban areas for major infrastructure investments makes good economic sense. If we are to close our 11.5 million job deficit, job creation must be focused where joblessness is concentrated. More profoundly, the density of population, cultural resources and economic activity within urban areas makes their revitalization key to broader regional growth.

Our program to rebuild Detroit and America includes initiatives to help struggling families; investments in our cities, infrastructure, industries and people; guarantee justice for workers; and end the wars in Iraq and Afghanistan.