Why the stock rally? The corporate shills on television would say it
is because the economy is strong. What they mean by that is that corporate
profits are good. In their minds that counts for everything. The
public is not fooled, however, as a recent American
Research Group poll shows:
January 23, 2006
George W. Bush's Overall Job Approval Rating Returns to Record Low As American
Turn Less Optimistic About the National Economy
George W. Bush's overall job approval rating has returned to its lowest point
in Bush's presidency as Americans again turn less optimistic about the national
economy according to the latest survey from the American Research Group. Among
all Americans, 36% approve of the way Bush is handling his job as president
and 58% disapprove. When it comes to Bush's handling of the economy, 34% approve
and 60% disapprove.
Among Americans registered to vote, 37% approve of the way Bush is handling
his job as president and 58% disapprove. When it comes to the way Bush is handling
the economy, 35% of registered voters approve of the way Bush is handling the
economy and 60% disapprove.
A total of 14% of Americans say the national economy is getting
better, which is down from 30% in December and 52% say the national economy
is getting worse, which is up from 40% in December. When asked about the national economy a year
from now, 15% say it will be better, which is down from 28% in December, and
62% say it will be worse, which is up from 39% in December.
The results presented here are based on 1,100 completed telephone interviews
conducted among a nationwide random sample of adults 18 years and older.
The interviews were completed January19 through 22, 2006. The theoretical
margin of error for the total sample is plus or minus 2.6 percentage points,
95% of the time, on questions where opinion is evenly split.
Overall, 36% of Americans say that they approve of the way George W. Bush
is handling his job as president, 58% disapprove, and 6% are undecided.
It makes sense, actually, that the more ruthless and predatory the large multinationals
become, the better their profits and the higher their stock. Social health
be damned. The people responding to the polls, however, are looking at
Ford and General Motors and are realizing that they no longer have any economic
security.
Ford to
cut 30,000 jobs in North America
By Joe Kay
24 January 2006
Ford Motor Company announced plans on Monday to eliminate
between 25,000 and 30,000 jobs by 2012. This amounts to more than 20 percent
of the company's North American workforce, and nearly 30 percent of its
manufacturing jobs, where the bulk of the reductions will take place. The
Ford plan is only the latest stage in a major assault by US automakers
on the jobs, wages and benefits of their workers, an assault that is having
devastating consequences throughout the US, Canada and other countries.
The plan, dubbed the "Way Forward," was outlined in a meeting
at the company's headquarters in Dearborn, Michigan. Citing increased
competition and a "crowded and fragmented" global auto market,
CEO and Chairman Bill Ford announced that the company "will be making
painful sacrifices to protect Ford's heritage and secure our future." He
pledged that in the future Ford, "will be able to deliver more innovative
products, better returns for our shareholders and stability in the communities
where we operate."
Return for shareholders and a shift toward profitability in its North American
division are the basic aims of the restructuring. Ford has been under pressure
from Wall Street to make major cuts in costs over the past year, and has seen
its bond rating reduced to junk status. The job cuts were widely expected,
particularly after Ford's larger US rival, General Motors, announced
plans to cut tens of thousands of jobs late last year. The cuts Ford announced
Monday went much further than an outline of the plan that it leaked to the
press in December and reflected the company's determination not to undershoot
Wall Street demands.
Ford's stock price was up $0.42 on Monday, or more than 5 percent - a
consequence of larger-than-expected profit figures for the fourth quarter,
as well as a generally favorable reaction on Wall Street to the new job-cutting
plan. David Cole, chairman of the Center for Automotive Research, told Dow
Jones's MarketWatch news service that the restructuring was an "excellent
start" for Ford.
…The plan, which will reduce Ford's North American production
capacity by 26 percent, is part of a broader strategy to reduce labor costs.
Last year, Ford began eliminating 4,000 salaried workers, and another 5,000
are set to be cut as part of the "Way Forward." This amounts to
about 20 percent of the company's white-collar workforce.
In addition to jobs, Ford is targeting health care and pension benefits.
Bill Ford said on Monday that "health care and legacy costs are enormous" and
that "more progress is needed" in making cuts. With the collaboration
of the United Auto Workers union (UAW), Ford has already pushed through health
care concessions that are estimated to save the company $850 million annually
and $5 billion in long-term liabilities. In his statements Monday, Bill Ford
directed his appeal for assistance not only to the union, but also to the
government, calling on business and government to work together to find a
way of reducing corporate health care and pension costs.
Ford's announcement follows close on the heels of the GM cuts, which
include plans for the elimination of 30,000 jobs in North America and the closure
or scaling down of nine plants by 2008. The new cuts come only four years after
Ford's last major retrenchment. In January 2002, the company announced
plans to eliminate 35,000 jobs worldwide and 22,000 in North America. In 2001,
the other major US auto company, DaimlerChrysler, initiated plans to eliminate
26,000 jobs.
The attack on automotive jobs is an international phenomenon, and workers
in Europe have also been severely affected. Both GM and DaimlerChrysler have
cut thousands of workers in their German divisions, and German automaker Volkswagen
has followed suit. Globally, automakers have been struggling to deal with overcapacity
and increased international competition, and have responded by cutting jobs
and shifting operations to countries with cheaper sources of labor.
The cutbacks at the Big Three have cascaded throughout the auto industry and
beyond. Ford's major parts supplier, Visteon, and GM's major supplier,
Delphi, have both announced major job, wage and benefit cuts in the past year.
In his speech on Monday, CEO Ford indicated that his company will continue
to escalate pressure on parts and material suppliers to reduce costs. He said
that it will seek to reduce overall material costs $6 billion by 2010.
Ford's suppliers will no doubt be forced to follow through with their
own job cuts and cost reductions. It is estimated that a single job at an auto
factory supports seven jobs in the wider economy, which will produce a devastating
impact on those areas where plants are shut down. These are working class communities
that have already suffered from the general stagnation and decline of wages
over the past several years and the attack on social programs and benefits.
Michigan workers have been hit hard by the 25-year assault on auto jobs in
what was once the center of US auto production. The closure of the Wixom plant,
as well as the Windsor plant directly across the Canadian border from Detroit,
will be yet one more setback. Tens of thousands of jobs are slated to be lost
in Michigan and the surrounding states of the Midwest as part of the GM, Visteon
and Delphi cuts of the past year.
The closure of the Atlanta Assembly plant adds to the GM cuts in that city,
which include 3,000 workers at its plant in nearby Doraville. And the scale-back
at Ford's St. Thomas Assembly Plant follows GM's decision to close
one of its plants in Ontario and eliminate a shift in another, leading to a
total loss of 3,500 jobs in addition to the 1,200 cut by Ford.
In making the new cuts, Ford is responding to the continued atrophy of its
share of US auto sales, which have declined steadily over the past decade and
are now at an all-time low of 17.4 percent. While Ford was able to post profits
in 2005 of $2 billion, this was with a loss of $1.6 billion in North American
production. The profits were due in large part to a $2.5 billion net income
for Ford's financing arm.
The US auto industry as a whole is in a protracted state of decline,
which began at least 25 years ago. Since 1979, the "Big Three" - GM,
Ford and Chrysler - have shed an astonishing 600,000 jobs. The companies
have become shadows of their former selves. At its peak, GM employed more
than 600,000 workers. After its latest cuts, the workforce will only be about
120,000.
There is increasing talk of the possibility that GM may end up in
bankruptcy, a tool that would be used to impose a new contract to eliminate
job security guarantees and health care and pension benefits. If GM does
declare bankruptcy, Ford would likely do the same. The auto giants may
employ a similar tactic to what has been used by the major airlines, which
have exploited the bankruptcy courts to escape from their so-called "legacy costs," including
billions in pension obligations.
The decline of the US auto industry is part of a general decline of American
manufacturing. As US companies have come under increasing competition from
abroad, those sections of the workforce that had previously been able, through
major struggles, to win certain concessions on job security, wages and benefits
are now considered to be the chief obstacles to restoring profitability.
The working class has been left entirely defenseless as its past gains have
been eliminated. Ford and the rest of the auto industry have relied on the
collaboration of the UAW and the Canadian Auto Workers in pushing through
the required cost cutting. The trade union bureaucracies in the US and in
Canada have collaborated with management in imposing cuts, and have taken
no steps to oppose the massive assault on auto jobs. Bill Ford said on Monday
that Ford would seek to carry out the cuts "with the full collaboration of our
union partners," with a justified confidence that this would be possible.
In response to the announcement of 30,000 job cuts, the UAW issued a statement
announcing that the news is "extremely disappointing and devastating" for
Ford workers. However, the union did not give any indications that it would
seriously oppose the cuts in any way, let alone call a strike to prevent
the measures.
The union bureaucracy has pursued a policy of increasingly close
collaboration with management over the past quarter century. The unions
have sought to channel the anger of US workers behind chauvinist attacks
on foreign workers while attempting to keep them tied to the Democratic
Party, which has helped oversee the deterioration of living standards.
For her part, Democratic Michigan Governor Jennifer Granholm declared her
support for Ford's new plan, calling the cuts "tough business decisions" that "will
help the company regain its financial footing so it can continue to be
an industry leader."
Some might see this and the announcement of $17
billion in losses by United Airlines or General
Motors's announcement of $8.6 billion in losses and wonder why
stocks are doing as well as they are? What's to wonder? These
losses are setting the stage for bankruptcy-court evasion of pension and
health commitments. And, with Alito
on the U.S. Supreme Court, corporations will be able to do whatever they
want. Why wouldn't that be good for their stocks?
Insider-Magazine.com last week published an account of the behavior or UnumProvident
Insurance in denying claims. Looks like a textbook case of corporate
psychopathy:
Giant UnumProvident Insider Trading Bringing the House Down Before Claims
and Criminal Charges Hit Fan
By: John Caylor
www.insider-magazine.com
January 21, 2006
Another American Institution Takes Plunge into Greed Pool
According to confidential sources, UnumProvident the nations largest disability
and long term insurer is operating in a state of chaos while executives struggle
to cash in their chips. Insider trading by the millions, exactly $144 Million
according to the United States Securities and Exchange Commission.
According to theSEC, UnumProvident Director Hugh O. Maclellan appears
to be leading the way with stock sales from his personal portfolio and the
families religious foundation, the "Maclellan Foundation a prime
stockholder".
Insider Magazines in-depth investigation reveals a monster corporation
with a "religious front" to hide away Billions siphoned from investors
and policyholders. The Maclellan Foundation definitely has hooks into the Bush
White House, IRS, federal courts and the U.S. Department of Labor and it may
have received millions from U.S. government sponsored faith based initiatives
explained in their "how to get taxpayer money Web site" "http://www.maclellan.net".
Recent corporate moves suggest the company to be quietly liquidating after
raising additional capital from investors. Some investors have filed suit for
fraud claiming that the company lied to them about soundness of financial statements
and claims payments. After years of fending off thousands of lawsuits for bad
faith and reckless disregard of medical facts involving denied claims the company
recently agreed to reassess 215,000 claims federal and state regulators claimwere
wrongfully denied.
The U.S. department of Labor has fined the company $14 Million and California
Insurance Commissioner has added another $8 Million after refusing to sign
a multi-state settlement saying the company was a criminal corporation and
charged them with knowingly violating the law. See the Commissioners statement
about UnumProvident: Click
Here for Commissioners Press Release
With mandated reassessment of 215,000 claims valued at approximately $330,000
each, UnumProvident now valued at $57 Billion will not be able to survive a
$71Billion dollar run on it. The multi-state settlement agreement reached
after an examination by a BostonLaw firm cozy with the company spells
out that the claims will be reassessed by a special unit formulated within
UnumProvident.
But according to confidential employee sources and claimants who have been
through the new loop, business is the same despite the agreement that calls
for favorable reinstatement of claimants already on Social Security Disability.
But the company had provisions written in the multi-state settlement giving
them the option to deny those claims again based upon what it deems as incompetence
of Social Security Awards.
According to Linda Nee a former UnumProvident manager and whistle
blower, Unumprovident lies to their investors and tells them they pay 98%
of all claims when in fact the company is paying only 60% of claims as
a rule. Nee
who now operates her own disability consulting service for ERISA and other
claimants says that UnumProvident is paying those short term claims they
must pay for cancer and related disabilities where claimants have a short
life span." http://www.disabilityconsutling.net".
The company's confidential claims manual states that Doctors and medical evidence
can be ignored when determining disability under policy provisions and the
company's employees will make all such determinations. See UnumProvident's
confidential claims manual... click
here for manual
The most they'll pay a claim will be for 24 months, that's the extreme
even though some contracts call for payments to age 65. So far the company has avoided
criminal prosecution and held it a bay, but, according to insider sources prosecutors
in Washington, D.C. are in producing a fraud case against the company targeting
benefits offset policy provisions.
…The pending felony chargesmay come from the fact that UnumProvident
owns Genex Services a claims management company that uses attorneys and insurance
professionals to reduce claims payment and company liability. Genex has become
the market leader for reducing claims nationally for many corporate and government
agencies.
Several months into the long term disability claims payment process UnumProvident
sends a letter informing claimants that they will soon reach the end of a 24
month own occupation period and they must seek social security benefit offsets
as required by their policies.
The company routinely sends out "Power Of Attorney Forms" from
subsidiary Genex Services to handle the case at no cost to the claimant and
tells them they are not required to appear at Social Security hearings and
asks the Power of Attorney forms be promptly returned. The claimants are
never informed that GENEX Services is a 100% owned subsidiary of UnumProvident
and they own the lawyers lock stock and barrel.
Refusal to sign the Power of Attorney Waiver to GENEX has brought
about early termination for an untold number of the 215,000 claimants due
to be reassessed. Insiders claim the apparent "Fox-N-Henhouse" program
led to many denials for disability claims sent over to the Social Security
Administration because they say it is deliberate criminal fraud that reduced
claims payments by hundreds of millions.
…According to the company's own internal Confidential Claims Manual,
Insider-Magazine.com has acquired; UmunProvident has approximately 500 new
disability claims per month. Doing the math shows that to be approximately
6,000 new claims per year and there are still 215,000 outstanding claims that
have been denied according to the company's own records. Insider
sources have told us that many of those were legitimate active claims which
were terminated early due to raids by employees seeking the companys covented "Hungry
Vulture Awards and bonuses".
The claims figures raise serious doubt if the company has ever paid
but very few marginal claims since the inception of the Maclellan "Religious" Foundation
in 1945 as an apparent safe haven source to stash billions away fromeyes
of the IRS and government regulators.
Oddly enough the Provident part of the now merged UnumProvident Insurance
giant came about from family founder Thomas Maclellan who demonstrated faith
when he bought half of Provident Life and Accident Companies, Inc. The company
was in it's fifth year of operation and lacked leadership and organization,
but Thomas applied his administrative skills and calm preserve to manage business
affairs in Chattanooga, while his partner, John McMasters, used his vibrant,
friendly personality on the road selling new policies.
The teams synergy was beneficial, but it was Provident's consistent pledge
to integrity and honesty that ultimately brought the company success. In
the late 1800's, an insurance company like Provident who promised to "pay
all claims promptly" was extraordinary, especially because Provident
followed through on that promise. Today UnumProvident provides disability
insurance through several subsidiaries:
- Colonial Life & Accident Insurance Company (all states, except New
York)
- First Unum Life Insurance Company (in New York only)
- Provident Life and Accident Insurance Company
- Provident Life and Casualty Insurance Company (in New York only)
- The Paul Revere Life Insurance Company
- Unum Life Insurance Company of America
Faith Shattered
"Bad faith" is the intentional deception, dishonesty, or failure
to meet an obligation or duty.
In a CBS 60 Minutes interview broadcast in November 2002 California Insurance
Commissioner John Garamendi told CBS's Ed Bradley that UnumProvident, the
nations largest disability insurer, appears to be under pressure to increase
claims terminations. This kind of thing will lead to problems. It'll lead
to fraud by the insurance company against the consumer, against the policy-holder,
said Garamendi.
Garamendi elaborated further by saying, "There's been successful
lawsuits against UnumProvident in which federal courts by unanimous verdicts
have issued punitive damages for this kind of activity. That's another,
not a warning sign, that's a clear siren out in the streets saying 'What
is going on here.?"
Bradley responded with, "If this company knows that they're
going to be hit with these lawsuits and they're going to lose some of them,
that there's going to be bad publicity, why would they do this?"
Garamendi: "It's an equation, an economic equation. How many will
we lose? How much business will we lose? Versus how much will we gain by
denying these claims. So they're doing that economic equation and they're
saying, "We'll run the risk of the lawsuits. We'll run the
risk of the bad publicity, and probably the departments of insurance are
asleep anyway. So let's go!"
The company has since ousted former CEO Harold
Chandler who handed out "Hungry
Vulture Awards" to employees who terminated the most cliams. New
CEO Tom Watjens has tried quelling the brewing stockholder rebellion with
this statement on the company's website...
At its heart, UnumProvident is a company of people serving people. We provide
more than a benefit check to claimants...we provide a wide range of benefits
and services designed to help people during what is often the most trying
time of their lives - loss of income due to illness or injury.
We are committed to paying all valid claims. In 2004 alone, we replaced over
$4.2 billion in lost income to help support families. To our knowledge, this
is more than any other income protection provider in the world.
Our claims paying philosophy is simple, yet direct:
- Make appropriate decisions by providing a thorough, fair, and objective
evaluation of all claims
- Pay all valid claims in a timely manner with a high level of service
- Partner with our customers in their efforts to return to work or to
independent living
Our claims process -- we call it "The Benefits Center" -- is
uniquehelping our customers return to work following an injury or illness.
We have invested heavily in a highly innovative process that is supported
by a significant number of specialty and clinical resources, including
our FMLA services, disability reporting/analysis, integrated disability
management and more. Within our claims operation,our employees are all
working on behalf of the millions of customers who have put their trust
in UnumProvident. Through these commitments, we have generated return-to-work
resultsbetter than industry averages.
UnumProvident is headquartered in Chattanooga, Tennessee, and has offices
around the globe with a significant corporate presence in Portland, Maine;
Worcester, Massachusetts; and Glendale California. Our subsidiaries include
Colonial Life& Accident Insurance Company in South Carolina and Unum
Limited in England.
Our focus on helping people return to the fullness of their lives extends
beyond our business interests and into the cities and towns where we live,
work and play. UnumProvident has long recognized the importance of providing
philanthropic support in the communities we call home and encourage our employees
to do so, as well. In 2004 we contributed more than $4.5 million to not-for-profit
organizations across the United States and United Kingdomthrough locally
made-decisions in our home cities. Through our matching gift program, we matched
an additional $896,000 of donations made by North American employees to local
organizations and schools. This dedication to helping our communities reach
their highest potential is a natural extension of our mission to help our claimants
return to the fullness of their lives.
In so many ways, and in all that we do, UnumProvident is working to make a
difference...one person at a time.
All the elements of classic psychopathy are there. Pretend you are a psychologist
and UnumProvident is a person - how could a diagnosis of psychopathy be avoided?
I sat next to a claims adjustor coming back from post-Katrina Louisiana a
few months ago. He seemed like a good guy. He said that the thing
that made him like his job was giving a check to family that needed it. At
some point in the conversation, I asked him how the insurance companies were
going to survive what I thought was huge liability after a natural disaster
like Katrina. He answered quickly and simply: "by not paying claims."
The psychopath repeats words of compassion and caring, but their actions tell
a different story. The psychopath also likes to elicit pity from its
victim ("the poor corporation has to pay pensions and healthcare for
all those retirees who dare to live so long"). At least they're
predictable. What the rest of society, the non-psychopathic part, must
decide is if we are going to let them be in charge. There are more of
us than there are of them. It is estimated that psychopaths, people with no
conscience, comprise between 4 and 6 percent of the population. But people
with consciences have been fooled by neoliberalism into thinking that good
will come of pychopathic corporate behavior. In fact, this fascist form
of neoliberalism is, like all fascisms, ultimately suicidal.
Here's an excerpt from
an interview with Emmanuel Todd regarding the U.S. government's response
to Katrina:
"We were able to observe the inadequacy of the technical resources,
of the engineers, of the military forces on the scene to confront the crisis.
That lifted the veil on an American economy globally perceived as very dynamic,
benefiting from a low unemployment rate, credited with a strong GDP growth
rate. As opposed to the United States, Europe is supposed to be rather pathetic,
clobbered with endemic unemployment and stricken with anemic growth. But
what people have not wanted to see is that the dynamism of the United States
is essentially a dynamism of consumption."
…"American industry has been bled dry and it's the industrial
decline that above all explains the negligence of a nation confronted with
a crisis situation: to manage a natural catastrophe, you don't need sophisticated
financial techniques, call options that fall due on such and such a date,
tax consultants, or lawyers specialized in funds extortion at a global level,
but you do need materiel, engineers, and technicians, as well as a feeling
of collective solidarity. A natural catastrophe on national territory confronts
a country with its deepest identity, with its capacities for technical and
social response. Now, if the American population can very well agree to consume
together - the rate of household savings being virtually nil - in terms of
material production, of long-term prevention and planning, it has proven
itself to be disastrous. The storm has shown the limits of a virtual
economy that identifies the world as a vast video game."
Is it fair to link the American system's profit-margin orientation - that "neo-liberalism" denounced
by European commentators - and the catastrophe that struck New Orleans?
"Management of the catastrophe would have been much better in the United
States of old. After the Second World War, the United States assured the
production of half the goods produced on the planet. Today, the United
States shows itself to be at loose ends, bogged down in a devastated Iraq
that it doesn't manage to reconstruct. The Americans took a long time to
armor their vehicles, to protect their own troops. They had to import light
ammunition. What a difference from the United States of the Second World
War that simultaneously crushed the Japanese Army with its fleet of aircraft
carriers, organized the Normandy landing, re-equipped the Russian army in
light materiel, contributed magisterially to Europe's liberations, and kept
the European and German populations liberated from Hitler alive. The
Americans knew how to dominate the Nazi storm with a mastery they show themselves
incapable of today in just a single one of their regions."
The neoliberal looting of social capital, of industrial capacity in the broad
sense, will doom the society of the United States and any other country that
adopts neoliberal prescriptions to third-world ineffectiveness.
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