From Volume 5, Issue Number 4 of EIR Online, Published Jan. 24, 2006

U.S. Economic/Financial News

Auto Industry Shutdown Continues

Ahead of Ford Motor's Jan. 23 announcement of plant closings (based on press reports Jan. 17-18):

* Ford Motor plans a two-week furlough at its plant in St. Paul, Minn. (which reportedly is slated for closure), idling some 1,750 production workers during the weeks of Jan. 30 and Feb. 6.

* Citigroup Investment Research called for Ford to cut factory capacity by 25%.

* Delphi is in another dispute with one of its suppliers. Israel-based Deutsch Dagan, a maker of precision machined nuts and bolts, is threatening to halt shipments, insisting Delphi make good on payments it promised before filing for bankruptcy.

* Auto-parts maker Dana Corp. on Jan. 17 reported a third-quarter loss of nearly $1.3 billion as a slumping automobile industry forced it to "realign its business." Its shares tumbled more than 20%. A leading supplier of axle, driveshaft, engine, frame, chassis, and transmission technologies, Dana employs 46,000 people in 28 countries. The company is based in Toledo, Ohio and reported sales of $9.1 billion in 2004.

* For December, manufacturing output in production of autos and auto parts fell for a third straight month as automakers continued to scale back output in an effort to reduce the inventory of unsold cars. The 2.8% drop in December followed an even bigger decline of 4.9% in November.

Northwest Airlines Asks Court To Void All Contracts

The Northwest Airlines bankruptcy case is aimed to push all the airlines even further into fascist policies. The Jan. 14 Wall Street Journal gloats: "Northwest Airlines on Tuesday [Jan. 16] will ask a federal bankruptcy judge to go where no judge has gone before in an airline reorganization: to void the carrier's contracts with unionized pilots, flight attendants, customer service agents and ramp workers." Northwest plans to outsource thousands of pilots, flight attendants, and ground workers, as they did mechanics during last year's strike—an action that is pushing the unions further towards a walkout, which the Journal says, will shut Northwest down for good. The law now says judges can nullify contracts only if the airline will fail otherwise, and that all the other airlines are watching to see if they "succeed" in getting court approval.

Medications Delayed Across the Country

Federal Center for Medicare and Medicaid Services (CMMS) chief Mark McClellan has admitted that "tens of thousands" of elderly poor people may have had trouble getting their medicine during the first two weeks of the government's prescription drug "benefit," and that about 20 states have now been forced to step in, according to the Washington Post Jan. 15. But the Los Angeles Times, in an article reporting that dangerous chaos in the program continued over the Jan. 14-15 weekend, said that the actual number is tens of thousands in California alone, and that the affected population—the number switched from Medicaid to Medicare by the new law—is 1 million elderly in that state alone. The Detroit News reports that the number potentially endangered nation-wide right now by delayed medications, is 6.4 million. This is the number of elderly poor abruptly switched on Jan. 1 from Medicaid to Medicare by the Cheney-Bush law.

The Detroit paper reported the "privatization" core of the problem: "The drug 'benefit' is being administered through private insurers offering dozens of different plans in each state. Each plan has different rates, covers different medications, and is available at different pharmacies."

Of these 6.4 million poor elderly, 1.8 million need psychotropic and other medications for mental as well as physical health. Kathleen Gross, executive director of the Michigan Psychiatric Society, declared, "Some plans are putting up a lot more hurdles and not covering drugs that we expected to be covered."

Senator Hillary Clinton (D-N.Y.) has released an eight-page letter to McClellan, damning the program for denying medication to the elderly in New York by the thousands. Denial of coverage of essential medications by private insurance plans, sudden demands for co-payments of $69.95 to $230 for a month's supply, chaos at pharmacies, paralysis at call centers and hotlines of CMMS itself, are all denying and delaying meds. Even those patients who do find their Medicare benefit cards accepted, are being socked for new "small" co-payments of $3-5 per order; and many elderly people take 10 or even 15 medications daily or weekly.

California Gov. Arnold Schwarzenegger demanded Medicare repay the state for its millions in public health emergency expenditure; McClellan will not even agree that Medicare can do that.

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