From Volume 5, Issue Number 25 of EIR Online, Published June 20, 2006

World Economic News

Alert: Lazard Lizards Found in Privatization Cases

An investigation of a number of cases of privatization and industrial shutdown find a Lazard Lizard involved. The case of Berlin Water, a large minority share of which was sold to the French firm, Vivendi, in 1999, is just an indication: Not only was it the new corporate policy, after that deal, to reduce jobs, but also to carve out all direct links of Berlin Water to mittelstand firms and crafts—along the line of "concentrate on the core branch" (invest little, that is). Altogether, this eliminated at least 6,000 jobs.

Vivendi CEO at that time was Jean-Marie Messier, until 1996 a top official at Banque Lazard in Paris, for several years. He ran in competition for Berlin Water with Enron's Azurix division, which even deployed former U.S. Ambassador Richard Holbrooke to meet with then-Mayor of Berlin, Eberhard Diepgen. But Vivendi finally got the deal—maybe the Lazard Germany branch had a helping hand in that, too. Or, Felix Rohatyn, another Lazard lizard, and U.S. Ambassador to France, at that time. Or, then-U.S. Ambassador to Germany, John Kornblum, today the chairman of Lazard's German branch, who served as a Berlin envoy of the State Department for most of the 1980s.

For that Berlin water deal, Messier ganged up with RWE, the leading German power supplier which actually earned the title "German Enron" at the end of 2005, when its electricity towers and overland power lines collapsed in the Muensterland region. Vivendi and RWE paid 3.5 billion marks (roughly 1.75 billion euros) for the deal.

GM Workers Strike in Portugal; Unrest Growing Across Europe

Although Klaus Franz, chairman of the factory council for all GM plants in Europe, never tires of claiming that the GM crisis in the USA will not spill over, it has: the nominally independent European plants in Europe are faced with a new round of budget-cutting and shutdown plans by the nominally independent GM management in Europe.

The Ellesmere plant in Scotland was the first to learn that 900 jobs would be axed; the 1,200 workers at the Azumbaja plant in Portugal are next on the list. They have begun an unlimited strike and demand solidarity by workers at the other GM plants.

This includes the plant in Zaragoza, Spain, which has been selected to take over the Combo van production that gets axed in Portugal by 2008 or 2009. Zaragoza, already in discussion for shutdown in 2004, may be shut down in 2009, at the latest. This also includes the plants (Bochum, Antwerp, Trollhaettan) that are currently producing components for the Astra street car, which will be replaced in 2008 by a new model which might be built in Poland and other Eastern sites, rather than in the West.

VW Proposal: Layoffs and Wage Cuts

The Volkswagen management June 14 officially presented its "consolidation" plan for cutting the VW workforce in Germany from its present level of 100,000 to 80,000, "in stages." It is said that about 15,000 VW workers have already accepted being laid off, in exchange for compensation of up to 100,000 euros per capita. For the higher categories of workers and employees, the management offers 250,000 euros per capita.

But the management also wants to go move from a 28.8-hour work week, to a 35-hour week— without compensation. This implies a wage cut of 20% for those who stay at VW.

The man who is going to sell that plan to labor, making it "socially compatible," is Horst Neumann, personnel director at VW, a doubtful intellectual who made a career in the metal workers union. Nahles engineered the coup against SPD party chairman Franz Muentefering, last October, which brought a number of greenie "networkers" into leading party positions.

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