Debt service to banks saps budget
By David Sole on October 3, 2012
The writer is a longtime Detroit Water & Sewerage Department city worker and past president of Sanitary Chemists and Technicians Association (formerly United Auto Workers Local 2334).
Strikers and supporters outside the waste water plant, Sept. 30.
WW photo: Abayomi Azikiwe
Oct. 2 — Workers at the Detroit Waste Water Treatment Plant walked off the job at 10 a.m. on Sunday, Sept. 30, and immediately set up strong picket lines. Members of American Federation of State, County & Municipal Employees Local 207 — with 950 members, the largest union among almost 2,000 workers at the Detroit Water & Sewerage Department — had voted Sept. 26 to authorize a strike. According to one union official, the rank-and-file workers jumped the gun on Sept. 30 while union leaders were still making plans for a strike later in the week.
On Oct. 1, federal Judge Sean Cox, at the request of management, issued an order for the workers to end the strike. The union’s attorney denounced the order as “outrageous” and announced plans to file a motion to dissolve the order. As of this writing, the workers and the local union leadership remain defiant and on the picket lines.
Top management, operating in “panic mode,” according to a chemist on duty Sept. 30, rushed to the plant the first day of the strike. All leaves and vacations were canceled. Workers from other, nonstriking unions were ordered to work 12-hour shifts and told they could not call in sick. Several workers, who had worked all night on Sept. 29, were ordered to stay in the plant and put in over 20 hours.
None of these other unions, however, do the same work as the hundreds of AFSCME 207 members who keep the waste water plant operating.
Detroit city workers have been battered for decades with pay cuts, concessions and wage freezes. Recently the situation has grown even worse. Claiming financial distress, Mayor Dave Bing and Michigan Gov. Rick Snyder reached an agreement to overturn collective bargaining and authorize the imposition of vicious wage, benefit and pension cuts on the thousands of city workers.
Some DWSD workers had hoped that a ruling by Judge Cox, who oversees the water department, would prevent them from suffering these attacks. The DWSD is a separate entity whose budget is not under the city’s general fund, but is based on revenues from water and sewerage rate-payers.
Privatization, union-busting plans
It became clear, however, that DWSD was going to go even further than other city departments in cuts and union busting. DWSD had hired a “consulting firm,” the EMA Group, which issued a report in August calling for the elimination of 81 percent of all public workers in DWSD.
The corporate-controlled media ran ridiculous stories alleging that DWSD was overstaffed and wasteful. This, in turn, was used to whip up public opinion against the public utility, especially against the largely African-American work force.
A closer examination of the EMA Group report shows that a major recommendation is to privatize large sections of DWSD. This has been a long-term goal of the corporate world for the city of Detroit. About 10 years ago, former DWSD director Victor Mercado brought in a different consulting firm, the Infrastructure Management Group. And federal Judge John Feikens, who had oversight of DWSD before Judge Cox, had authorized the creation of a secret corporate-dominated committee to examine ways to dismantle and outsource the department.
Those efforts failed when Mayor Kwame Kilpatrick was forced to resign in the face of perjury, obstruction of justice and corruption charges in 2008. Mercado is now undergoing a trial, along with Kilpatrick and others, on federal charges of corruption.
DWSD has approved a $48 million contract with EMA Group to implement their union-busting proposals.
Priority: paying ‘debt service’ to banks
Despite all the anti-worker and anti-union propaganda, the fact is that Detroit’s general fund budget shortfalls and the DWSD’s cries of poverty are caused entirely by the huge interest payments demanded by the big banks.
Of DWSD’s sale in June of $660 million in bonds, $300 million goes directly to the biggest banks, including JPMorgan Chase. Debt service — payment to banks — now eats up more than 40 percent of the water department’s revenues.
A recent report from Gov. Snyder’s own financial review team found that Detroit had more than enough revenue to cover all city services and pay current workers — except for the fact that payment on the debts owed the banks gets priority. Only after paying debt service to the banks does the city show a deficit. Detroit’s debt is estimated at $16.9 billion!
Picket lines honored
The morning of Oct. 1 found large and militant picket lines at all the gates to the waste water plant. Cars and trucks were used to block the driveways. Starting at 6:20 a.m., no one was allowed into the plant.
Workers from other, nonstriking unions took one look at the picket lines and turned around to go home. Vendors and contractor workers have refused to cross picket lines.
It has been widely reported that management may fire all workers who went on strike. But these tactics may backfire. City workers in water as well as other —departments are fed up with having all the burden of the economic crisis put on their backs. And the people of Detroit are sick and tired of cuts to their crucial city services.
This strike has the potential to trigger a wider fightback by Detroit residents, workers and the poor against the bankers and their lackey politicians who put the profits of the banks ahead of the needs of the people.