Strike is Over

Yes, the strike was short-lived, and that's probably a good thing.  But we'll see what really got agreed to, and what Ford and Chrysler have to deal with (along with the Union).

UAW Strikes GM

Yesterday morning, 73,000 UAW GM employees walked off their jobs to put pressure on the company to resolve issues concerning job security, wages, layoffs, and how much production goes overseas. Of particular interest is the initial funding of the Voluntary Employee Beneficiary Association (VEBA), which is the trust fund for retiree health care to be administered by the Union.

In today's economy and job market, I can totally understand the concern over job security by the Union membership. Layoffs and the closing of plants are life-changing events that some people cannot recover from. And wages are always a contentious issue - there is a standard of living that many workers have gotten used to, and a reduction in those levels in an age of uncertainty is unsettling at best.

From an earlier post:

The whole idea behind a Union is to first and foremost protect the worker from abuses from the company they work for. Fair wages and other benefits are also part of the contracts as well as a certain amount of job security if the company runs into problems. A Union is not about telling a company how to run its business!! If anything, the contract that the Union and company signs is to protect the worker from mistakes the company’s management may make, which should help the company plan better.

Where the Union has been stung before is two-fold: The company asks for concessions due to the company losing money for the year, and closing the plants due to non-profitability. The company then turns around and gives executives multi-million dollar bonuses. The lack of credibility on the company’s part is obvious.

This now puts pressure on GM’s negotiators to come up with a workable solution that satisfies the Unions but still provides a profitable scenario for the company. Not an easy task, especially with the volatility of the automotive sector with changing consumer tastes and foreign automakers increasing their market share while Detroit struggles.

Part of the solution (from the automaker’s viewpoint) is VEBA. Excerpts from Newsweek on msnbc.com include:

The costs of providing health-care insurance have risen 78 percent this decade, according to a study by the Kaiser Family Foundation and Hewitt Associates. And that has caused many companies to drop coverage for retirees while others feverishly cut benefits. Last year three quarters of big American companies increased premiums for retirees under 65, and 58 percent raised rates on Medicare-eligible pensioners, according to the study.

Nowhere is the pain more acute than in Detroit, where General Motors, Ford and Chrysler are confronting a lifetime retiree medical tab of $100 billion. Providing medical insurance for 540,344 retirees and 180,681 workers adds about $1,500 to the cost of every car Detroit builds—which goes a long way toward explaining why America's automakers lost a combined $15 billion last year. So the car companies are taking a cue from Goodyear, negotiating with the United Auto Workers to rid themselves of their retiree medical obligations by setting up a union-controlled trust known as a voluntary employees' beneficiary association, or VEBA. (Among the benefits to employees: if an employer goes bankrupt, the retirees' medical plan is protected from hungry creditors.)

In contract talks that have stretched well beyond a Sept. 14 deadline, GM and the UAW are haggling over how to create such a trust. The companies want to kick in about $70 billion to fund the trust, analysts say. That would wipe retiree health-care expenses off their books, which would immediately improve their credit ratings, cut costs and free up cash for other uses.

The union, however, wants more money in the fund—closer to the companies' entire $100 billion obligation. The UAW may have good reason for wanting more. A retiree health-care fund set up by Caterpillar in 1998 went broke in 2004 when it couldn't keep up with runaway medical bills.

It is this last paragraph that concerns me. Medical costs continue to escalate, possibly more than what the fund is able to keep up with. If the fund gets into trouble and needs an influx of cash, where is that going to come from? And the costs for administering the fund will also need to come from somewhere, and that is also a drain on the fund.

Is VEBA really a long-term solution for health care? From the standpoint of GM, it is. Consider this statement:

GM wants the trust, called a Voluntary Employees Beneficiary Association, or VEBA, so it can move much of its $51 billion in unfunded retiree health care liabilities off the books, potentially raising the stock price and credit ratings. It's all part of the company's quest to cut or eliminate about a $25-per-hour labor cost disparity with its Japanese competitors.

Yes, I have concerns about a Union-managed retirement health-care fund. A statement from the same article by a Union retiree:

…says unions have no business taking on the risk of doling out medical benefits to retirees.

While the auto companies need to be profitable to stay in business, it cannot do so without the Union’s cooperation. And the Union membership cannot live without the auto companies staying in business. A catch-22 if there ever was one. The problem is for the company and Union to come to an agreement that benefits both for the long-term, not a quick-fix, greed-ridden short-sighted agreement. And what that will be remains to be seen, not in the short-term, but with the clarity of 20/20 hindsight.

Before I Go...

Mrs. Common Sense and I are taking a long and well-deserved vacation.  We haven't taken a vacation for a long time, and this one will be special.  We will be celebrating our 15th wedding anniversary next Wednesday.

But before we go to a place without Internet access or cars(!), there are a few comments about the past week's events:

Fred Thompson finally announced his candidacy for the Presidency.  It will be interesting to see if his bid is as well timed as he hopes it will be.

Osama bin Laden released a tape a week before the 6th anniversary of 9/11.  It looks like he is just as vain as the civilization he wants to destroy - he dyed his beard and eyebrows!!

Cerberus has stolen or hired away a top gun at Toyota to run the sales and marketing for Chrysler.  Then the next day they hired GM's man in China to help with globalization efforts.  Does make you stop and pause and think about the future of Chrysler.

Volkswagen announced this week that they were moving their North American headquarters from Michigan to the suburbs of Washington DC.  Another blow to Michigan...

The Michigan Legislature wants to raise taxes on anything from telephones (cell, land-line, & Internet) to health clubs.  Just what a state in trouble needs - more taxes...

Another sex scandal in Washington.  This time, a Senator plays footsie in an airport stall.  Where are the politicians that actually stand for something besides themselves and their party?  Is there no one with integrity?

The financial meltdown in the mortgage industry continues.  Countrywide Financial, a major lender, is cutting 12,000 jobs from it's payroll in response to the flurry of bad loans, defaults, and the collapse of the housing market in general.  Who knows where this will end?

Luciano Pavarotti died this past week from cancer.  While not a fan of opera, his voice was one that would send chills down your spine with it's power and tone. 

Finally, the Surge appears to be working, but we'll see what General Patraeus has to say next week with his report.

Later...

Made in China...

Who said making things cheaper, i.e. in China, is better for business? Only a short-sighted person interested in the bottom line would…

China has been cheaply manufacturing many types of goods for many years, but the shine of the low-cost Empire is becoming increasingly tarnished over the past few months. Pet food contamination was only the beginning. Toothpaste contaminated with an antifreeze ingredient, defective tires, tainted medicine, and lead paint on toys appears to only have been the tip of the contamination iceberg.

Now there are massive recalls on these and probably dozens of other products that haven’t made it to the mainstream headlines. The cost of these recalls can be tallied up fairly quickly, but what about the all-important confidence of the consumer? Once a company has lost the confidence of its customer, it is very hard to get them back.

Don’t believe it? Look at the Big Three. When the Japanese imports hit American shores, the call went out that the Japanese had better cars with higher quality at a lower price. That perception is alive and well today thirty-plus years later. It doesn’t matter if the quality has improved according to numerous benchmarks and magazines, the perception is still there.

And it’s bound to get worse. There are massive influxes of cash and investments in Chinese manufacturing from the West, and the potential consumer market there is incredibly huge. Factories are being built at a staggering rate, not only to manufacture products for export to the West but for consumption inside of China itself. It only stands to reason that on this wild-west frontier of business that corners will be cut to gain the advantage of billions of dollars/euros/yuan available to those businesses that drum up lucrative contracts. With Chinese-built cars due to hit the American market within a couple of years, one really needs to wonder if these vehicles won’t be another set of Yugos in the making.

The Chinese government is ill equipped to regulate this burgeoning industry. Lack of experience, corruption, and a rapidly expanding industrial base all contribute to less than stellar quality and contamination concerns. But that is just the beginning of my concerns.

Part of what concerns me is that for all the billions being spent in China, the government there is still Communist. Not only is it Communist, it is backed by a million-man army with nuclear weapons. Billions can be lost should the government decide to nationalize all of the industry that the West has built. The world economy would crash, but the Chinese have isolated themselves from the rest of the world for years, and can do so again at the drop of a hat. But this won’t happen for some time – the Chinese aren’t done yet. No, they will wait until the rest of the world is utterly dependant on their country for goods, then they will slam the door shut.

Inviting industry to build in their country is a great way to build up their infrastructure. What isn’t commonly known is that the Chinese have been quietly buying bonds and securities from countries around the world. They now have so much that if they decided to dump these securities on the market, the economy of the world would crash and burn. Therein is my other concern. I believe the Chinese are waging an economic war, and doing it for the long term goal of dominating the world.

Unfortunately, it appears that the world is headed down this road. It looks like we are all in for a bumpy ride sometime in the near future, and hitting the wall in the long term.

And yes, I am trying to get my blog banned by the Chinese, and I've been successful in that endeavor. 

Chrysler, Cerberus, and Daimler, Oh My!

It's been a little over a week since Cerberus signed the papers getting Chrysler out of the clutches of the Germans (well, almost), and there's not much change.  But then...

The Pentastar is back!!  Finally, a symbol of the heritage of the company that just doesn't seem to die, no matter what happens.  At least it's not a three-headed dog, even a three-headed Hemi-dog would have been too much.

Tom LaSorda got bumped from his top banana position down to 2nd banana.  Not surprising since Chrysler hit the skids on his watch and Cerberus wanted someone else not connected with the previous regime to be in charge.

The Top Guy that Cerberus put in LaSorda's position is the former Home Depot CEO, Robert Nardelli.  He floats over to Chrysler/Cerberus under a $250 Million golden parachute left over from his Home Depot days.  How much money can a person be worth?  Of course, since Chrysler is now a private company, Nardelli's salary doesn't need to be disclosed to shareholders, but it has been stated that he will earn only $1 for his first year (a la Iacocca) with future compensation dependant on his performance.

But the Germans (a.k.a Daimler) still have a little under 20% of the company.  It will be interesting to see how they fit into the picture.

There is a lot of speculation at the company about how all of this will impact Union negotiations.  Not much feedback yet, but we all know that healthcare is at the top of the list right along with the job bank.  Will both sides play hardball?  Too soon to tell, but I predict a lot of yelling.

I wonder if we'll all have to wear little shop aprons with the company logo on them...they had damn well better not be orange...

SOLD!!

In case you didn't catch the business news, DaimlerChrysler accepted an offer of $7.4 Billion from Cerberus Capital Management for the Chrysler part of the business.  Daimler will retain 20% of the business to be known as Chrysler Holding, but also assumes the former division's debt.  What is surprising to me is that UAW President Ron Gettlefinger supported the transaction.

Where the company goes now is going to be interesting.  Chrysler is in the middle of a restructuring to return the company to profitability in a couple of years.  The upside is that the company is starting out debt-free thanks to Daimler assuming the debt.  The downside is where the negotiations with the UAW (and with the rest of the staff) go.  No doubt concessions for health benefits and retirement coverage will be on the table.

Will Cerberus pump up the company before dumping it?  Only time will tell.

What's Next?

Global Warming?  You must be kidding?  We were greeted with 2" of snow this morning after having record highs this past week.  More snow to come with the temperatures to match.  Hey Al, you sick twisted moron!  That's snow out there, not a heat wave melting the tires off of my truck!!

Next on the list is that Kirk Kerkorian is bidding on Chrysler.  A surprise to say the least.  What's even more interesting is that he would give the Unions, employees, and the management the chance to own part of the company.  Good move on his part - if you own part of the company you work for, you tend to have that personal stake & pride in what you do.  No word on if the Board is seriously considering this offer (which is better for the employees than an investment firm buying the company).  But we will still have to wait on pins and needles for the outcome of this version of "Deal or No Deal."

But is there any justice either?  Ford is paying their CEO $28 Million for four months of work.  Considering that the company lost 12.7 billion in 2006 and workers are getting less than a $1000 bonus, I think this is a little bit excessive.  Of course, tell that to all of the employees let go from the company who got the shaft instead. 

On a happier note, the British sailors are home.  What the aftershocks will be after this latest incident with the Iranians is anyone's guess.

Finally, the Masters are being played in Augusta this weekend.  I plan on watching the final round (too much other stuff to watch everything).

Chrysler for Sale?

The buzz around Detroit these days is that DaimlerChrysler (DCx) is putting the Chrysler Division up for sale, and that GM is interested. The rumor also includes the juicy teasers that Nissan, Toyota, and Hyundai are also looking at buying the automaker. I personally don’t think any of this is going to fly.

But what if GM really does want to buy Chrysler? What would they want out of the deal?

Well, the Jeep brand-name for one. That was one of the reasons that Chrysler bought AMC way back when. But that would directly compete against the Hummer series (especially the H3). Sure, Jeep has brand-name recognition, but GM has spent millions in promoting the Hummer as a superior vehicle. I can’t see GM throwing away that much money, but then again, they’ve thrown away more on stupid projects that never saw the light of day.

Another thought would be Chrysler’s minivan market share, but it’s hard to believe that GM couldn’t drop enough money into the pot to come up with a minivan that would beat all comers. They just haven’t done this because there just isn’t enough justification for the investment.

The last thought would be the design. Chrysler’s designs are breathtaking, definitely different than what Ford or GM currently has. But if GM wants the designers, they can hire them away from Chrysler with a lot less money than what it would take to buy the company (rumored to be $5 Billion before liabilities).

On the downside is that GM is closing plants left and right. Chrysler’s recently announced restructuring plan is accelerating the cuts already planned. And if the two do merge, thousands from both companies will be out of jobs. And I guarantee that would not be good for either company – whatever brand loyalty there may be could evaporate in the wind, and investigations by the government and others would be intense.

No, I just cannot see GM buying Chrysler – just too much flak if the deal goes through. Could you imagine the amount of fallout from the Union, government, and employees of both companies? Not worth the risk, in my opinion.

What about the other companies? Let’s take a look at a couple of these companies.

Toyota has enough spare cash lying around to buy both Ford and GM, and then drive Chrysler out of business through sheer marketing. But they don’t want to buy any American plants or companies. They are doing just fine on their own without having to deal with the legacy costs of these companies, not to mention dealing with the Unions. They’re firing on all cylinders – why muck things up now?

Nissan recently tried an alliance with GM. Things fell apart, and Nissan is probably more interested in solidifying their positions in the various markets rather than stir things up.

Hyundai is an interesting company. They may want to buy Chrysler to help break deeper into the US market. But again, there are those legacy costs, and they may not have deep enough pockets to put up the money. I seem to remember that some years ago, Hyundai was nearly bankrupt, but my memory has faded somewhat.

So what’s left? Besides the above rumor & speculation, there is a theory that this is a ploy by person or persons unknown to jack up the stock prices of both GM and DCx (and if this is truly the case, then the SEC has cause to jump in and nail a few people). But there is just one more final thought.

The contract with the Union is up this year for Ford, GM, and DCx. What if this is just a ploy to get DCx’s Union to concede items at the bargaining table? DCx earlier tried to strong-arm the UAW to reduce health care benefits to the level that was conceded to Ford & GM. But since DCx was fairly profitable at the time (and paid the executives pretty healthy bonuses), that request was promptly rejected. So now the semi-subtle hint is now out there that if the UAW doesn’t play ball on DCx management’s terms, Chrysler will be sold to the highest bidder (and let the bloodletting begin).

Well, that’s my take on this rumor. It will be most interesting to see what transpires in the next couple of months.

When Will the Layoffs Stop?

This past week (February 14^th), DaimlerChrysler announced that 13,000 employees would be cut from the company’s payroll, and plants will cut back on shifts while closing a plant in 2009. The timing of the announcement strangely coincided with the following historical item:

The announcement was the latest in a series of automotive related companies cutting their workforces since 2001. DaimlerChrysler, GM, Ford, Dana, Visteon, and Delphi (to name a few) have all let employees go as part of a restructuring plan. And quite frankly, I don’t think that the layoffs are done yet. If it’s like any of the other industries that have gone through this before, then we’re in deep trouble.

I remember the steel, airline, and machine-tool industries of old – strong and vibrant, second to none in their capacities and services. Where are they now? Gone, or in deep financial trouble if they are still around. These same industries went down the path of downsizing, layoffs, and restructuring when they ran into problems. And look where they ended up.

I could, at this point, go on a rant about globalization, unfair trade practices by other countries, and the unresponsiveness of the domestic companies to their customers. I could also comment on the lack of responsiveness of our elected officials to the plight of companies based in the United States, compare free trade vs. fair trade agreements, and mention the anti-American business commentaries of the various news outlets. These are the realities of business in this day and age. But the real casualties of this reality are the American workers.

The American worker (and I’m talking about both blue and white collar, Union and non-Union) has gone from being a valued and essential part of a company to a commodity that can be bought & sold at will. And it doesn’t matter if you are a highly trained professional or a line-worker – you are all expendable if the bottom line isn’t where it should be and the executives need a quick-financial fix. There are no guarantees.

In other words, everyone as well as everything is a commodity, ready to be bought, sold, or disposed of as need be. Loyalty of the company to the employee and the employee to the company is now a thing of the past. And that is a very uncomfortable feeling for those of us that are still employed.

It’s even worse for the folks that have lost their jobs. Finding another job is a major problem because of all the other people looking for a job at the same time. Here in Michigan, finding another job is an ordeal because of the number of people that are out of work and looking. For example, it took my wife 8 months to find a job after she was let go just because of the employment situation. Most people either give up or move to another state to find a position, and often it’s not a position that pays as well as the one they lost.

There are no easy solutions to people losing their jobs, nor are there easy answers for keeping the jobs we have. In many respects, we can just look on in dismay, plan for the worst, and hope for the best. And that is depressing.

What the future will bring is anyone’s guess. Will things get better or worse? When will the layoffs stop? I don’t have that magic crystal ball. Do you?

Who Is Special?

Before going on with this post, I would like to assure all of the readers of this post that I am not a racist, a bigot, and nor do I believe that any one race is superior to another. People are people, and how they conduct themselves is a reflection upon themselves, not about the color of their skin. Whether or not they want to make an issue of skin color, I leave that to the well-established organizations that have a history of such actions & views. Any comments alluding to the contrary will be subject to the Blog Comment Policy posted at the right.

As many of you know, February is Black History Month. This means that my work is now plastered with placards, posters, and art celebrating the ethnicity of Americans of African descent. I personally do not have a problem with this – everyone should be able to relate to and celebrate their heritage.

Other months and weeks celebrate Hispanic, Asian, and Native American ethnicity, and also have their own posters, art, and whatnot showing the rich culture that these groups have. And yes, there is a Gay, Lesbian, and Trans-gendered display for that community that gets put up once a year. But there is nothing celebrating the White, Caucasian, or European stock that populate this country.

Why is it that only certain groups get their days in the sun while a certain group does not? Now while I admit to being of mixed-Irish decent, St. Patrick's Day just doesn't cut it in my humble opinion. One day of revelry (?) does not make up for a month of hoopla (and even then there are some accounts that the day has a negative connotation about the Irish, but I digress). But if I or others of my ethnic background make a fuss about this apparent inequality, we are promptly branded racist, hate-mongering bigots.

This is one of the reasons that I believe that diversity, as a whole and in practice, is a sham. If we truly want to celebrate a diverse culture, we would not single out one race or skin-color for omission nor raise one up above all others. And if one ethnic group points out the inequality, they shouldn’t be flamed for it.

From another angle on the same subject, I was listening to a local radio station, and there was a statement that Detroit was the most segregated city in the United States. There was a further announcement that there was going to be a symposium to discuss the issue (translation: problem). Is this really a problem or not?

I hate to state the obvious, but people of similar ethnic backgrounds tend to band together. There is this herding instinct, one that wants to have familiar or similar faces and backgrounds around us. Be honest with yourself – do you have more friends of a similar race to yourself, or from a different race? What is your real preference? Nothing to be ashamed of – that's just the way humans are.

But the problem is that there are people thinking that this is inherently wrong behavior. These pointy-headed social engineers (PHSE) believe that to think differently than their paradigm means that you are racist and a hate-monger. Sorry, Professor PHSE, that is a false assumption for your perception of perceived problem.

The fact of the matter is that you and I most likely have more friends of similar skin color than not. This doesn’t mean that we are racist or bigoted. In fact, I get along with just about everyone whether or not they are the same skin color as I am or not. But the PHSEs don’t like this, and lobbied for laws and regulations to force the issue.

I’m not talking about the civil rights acts that guarantee everyone a fair shot at jobs, housing, or education. Rather, the ones that I am thinking of are ones that state quotas (explicit or implicit) for the same subjects: jobs, housing, and education.

As an example, there is a regulation that states that each large corporation must award a certain percentage of business to minority-based or owned suppliers. To do otherwise would incur higher taxes or fines. These businesses know this, and typically charge higher rates for their services. Is this fair to a non-minority owned business?

Another example is Michigan’s Proposal 2 that was overwhelmingly approved by the voters last election. It stated in part:

Ban public institutions from using affirmative action programs that give preferential treatment to groups or individuals based on their race, gender, color, ethnicity or national origin for public employment, education or contracting purposes. Public institutions affected by this proposal include state government, local governments, public colleges and universities, community colleges and school districts.

And the courts are now battling the will of the people stating that this is unconstitutional! In effect, the courts are arguing that some places in these institutions should be reserved, i.e., a quota, for people that may not otherwise qualify or have the opportunity to attend school or get a job. Excuse me? Shouldn’t the best qualified people be hired for the job or an educational spot instead of a person that isn’t? Here would be my argument to the court:

Suppose that a person who does not have the ability or education is hired for the job of designing and building a highway bridge. They are contracted merely because the contract that needed to be filled was reserved for a person of that ethnic or social background. Would you want to be the first person to drive over that bridge after it’s completed?

Because of this argument, I have problems with quotas wrapped in the guise of affirmative action. Everyone should have an equal bite at the apple, but the deciding factor should be on the person's ability & merit, not race, gender, or social standing. Unfortunately, what has happened is not fair and is patronizing to those people that the affirmative action programs are supposedly helping.

A little over a year ago, I wrote a post titled Equal Diversity. In it I wrote:

Government sponsored quotas & regulations will not change people’s attitudes toward diversity. All these will do is promote division, dissension, and resentment. I have noticed in recent years an increase of these attitudes. This is NOT what Martin Luther King had in mind.

His vision looked for the Negro people to stand side by side with the White people as equals, and to get there by self-sufficiency, not by a government mandate. He wanted his people to rise up to their potential, to stand on their own two feet, not by some law or subsidy. Patronage of the Negro was not his vision, but to join the human race as equals to any other ethnic group, to enjoy the fruits of hard labor through equal opportunity, and not through quotas.

So whether it is an ethnic holiday, applying for a job or education, or anything else, we should be color-blind, and so should our government, education, and employment institutions. It’s either all or nothing as far as I’m concerned – I’m fed up with the double-standards and favoritism. How about you?

The Service-Based Economy

While digging through some old files to figure out what to pitch & what to keep, I ran across the following article originally written by the editor of Manufacturing Engineering magazine in 2003:

Wake Up, Brie Eaters!

Brian J. Hogan, Editor

Not long ago, Ingersoll Milling Machine closed its doors. Another great US machine-tool company bites the dust, and its closure isn't worth an inch of copy in the typical American newspaper. What has happened, and continues to happen, to the US machine tool industry is symptomatic of something much broader - a general failure on the part of this country's political leadership to understand the value of American industrial society.

Keeping a machine tool industry, and a manufacturing culture, alive and well is basically a political decision. Germany has made that decision, as have Japan, Italy,Taiwan, and Switzerland. China clearly understands the importance of machine tools, and the manufacturing enterprise.

In contrast, the people who form much of our political leadership are the kind of liberal-arts-loving snobs who think engineering colleges are trade schools, and physics/math/chem/biology majors are boring nerds. When people of this sort wind up running big companies, they view the engineers who work for them as servants, and their factory-floor workers as interchangeable serfs. When they go into politics, they spend their time pacifying the latest trendy group of victims. To this layer of self-satisfied individuals, neither the machine tool industry nor the manufacturing enterprise matters. These brie-munching, wine-sipping characters will sit lumpishly and watch the destruction of the technical foundations of the US, understanding nothing, and doing nothing.

The prosperity of the US rests upon the real wealth generated by a short list of activities: extractive industries, agriculture, and manufacturing. Every other line of work takes the money earned in these fields and shuffles it around & distributes it. Your local lawyer does not generate wealth, and neither does ye olde stockbroker.

Technology supports the economy of this nation-state, but our politics are dominated by people whose technical expertise doesn't extend beyond using a television remote. This situation is dangerous. The brie eaters have got to wake up and support what is left of the US machine tool industry. In fact, they've got to encourage the revival of that industry, and move to strengthen US manufacturing, or the entity we call the United States will be in the soup.

None of this means I'm attacking offshore builders or offshore manufacturers for goodness sake, those companies bring superb technology and wonderful products into the US, and their equipment is keeping US manufacturing alive. I'm complaining about our so-called leaders and legislators who are indifferent to manufacturing. They don't understand or refuse to understand that machine tools really are, as the Japanese say, Mother Machines. Politicians who ignore the condition of the machine tool industry are fools.

While the above example uses the machine tool industry as an example of a declining industrial base, there are many other industries that are just as affected. I can think of the automotive industry right off the bat. Just this past week, in view of declining sales and manufacturing reductions, parts supplier Detroit Axle is now starting to offer buyouts to its Union employees. GM, Ford, and Delphi (just to name a few) have all offered buyouts as part of their restructuring plans. This declining ability to make parts and products will eventually weaken this country.

The point is that I remember my high school economics class making the arguement that the real worth of a country is its industrial capability to manufacture goods. These goods have an intrinsic worth which is the sum of materials and time used to make them. Now we are entering into what is known now as a "service-based" economy.

This economy is the ability to shuffle money around based on time and talent. On the surface, it just doesn't seem to be too bad - we sell our services to overseas companies, and they sell us our material goods. Doesn't sound too bad, does it?

One of the problems is that intellectual property is such a tricky thing to keep proprietary. Once something has been done, then it can usually be reverse engineered by those companies or countries without the ethics or legislation to prohibit these actions. Think of pirated DVDs for sale in China (and beyond) and I think you get the general idea.

Another problem is that if your country buys its machinery or goods from another country and it breaks down, then how are you going to get replacement parts or the widget fixed? If that supplier doesn't have an office or supply depot in your country, it could take months to get a replacement part or a service person to come & fix it. I have seen this very situation more often than what I care to admit.

Government's position in this process is two-fold: The first is to promote policies that encourage manufacturing companies to set up shop and remain in the United States. These policies could range from tax incentives to development loans or grants. These policies are used by foreign countries to companies to provide them not only an incentive to stay within their borders, but to bolster their economies as well. For them, it's a win-win situation, especially if it allows them to compete on the world stage.

The second is to make sure that companies compete on a "level playing field". NAFTA, CAFTA, and granting foreign countries favorable trading partner status does nothing to secure jobs and factories in this country. When the economies of third world countries have a standard of living far below that of the United States, the advantage goes to them as wages are hugely disproportionate. I have posted several articles on this topic, and the upshot is that their economies & standards of living will not rise to meet ours, but ours will fall to meet theirs.

The governor of Michigan has gotten a lot of heat in campaign ads, and rightly so. Michigan has lost so many manufacturing jobs it is pathetic. The economic plan is a disaster, and no relief is in sight.

But it doesn't matter what part of the country you live in, this should be a nationwide concern. If the jobs go elsewhere, what else is next?

So in this midterm election, make sure you know where the candidates of your choice stand on this issue. You have just a little over 30 days to find out before the election.

Unions for Democrats? Why?

I already know that this post is going to rile a few of my Union brothers & sisters, but I'm going to let fly anyway...

I've been a Union member now going on 6 1/2 years and getting the Solidarity Union magazine all that time. Every time I pick up the magazine & leaf through it the message is that Republicans are against Unions, and Democrats are our friends. Vote Democrat, and all things will be better - jobs will stay in the US of A instead of going to China or Mexico. What?? I must respectfully disagree with this recommendation.

First off, I do not believe that either political party is particularly Union friendly unless it's around an election time. That's when the statements start flying around the airwaves that the opposition party is against Unions and their party will keep jobs in the state or country. It doesn't matter whether the statements are true or false, it just depends which message ticks off the right people, or whom has been brainwashed the most.

The Union Leadership touts that the Democrats are "for the little guy." Nonsense!! The Democrats are for themselves, and whatever will get their members elected and bring more power to the party. Here's a couple of examples:

Does anyone remember the debates about NAFTA? I still remember watching Al "I Love Trees" Gore having a discussion on NAFTA with Ross Perot. In it, he stated that NAFTA was a good thing because it would raise the Mexican's standard of living up to that of the United States worker, and then the two countries would be able to compete on a level playing field. I almost died on the spot!! First of all, the Mexican government sets the wages of all the workers in Mexico - I know this for a fact. And even if that wasn't true, how many generations would it take for this to happen? I don't think we could lose enough jobs to Mexico for their bankrupt economy to come up to 2nd class world-standards & the average person's standard of living to get anywhere close to that of the poorest US worker (Union or not). Who was in power when NAFTA was voted on? If I remember correctly, Democrats had the White House and both Houses of Congress.

If that wasn't recent enough, then who granted "Most Favored Trading Partner" status to Communist China? Yep, Uncle Bill and the Democrats (although I think Congress may have been Republican at the time, but Bill pushed for it). And guess what? Union jobs are going to China, and even the Mexicans are losing entire factories to China (and you should hear them scream!).

Now I'm not suggesting that the Republicans are pure as the driven snow on this issue - they just don't seem to be as covert or deceptive about what they are for or about. They are definitely pro-business at the expense of the Unions, although I am starting to think that they are tending toward a neutral position. But stop to think about this for a second - if businesses are doing well, wouldn't they be more receptive toward favorable Union contracts? One could hope, but as there is a constant reminder in Solidarity that this might not be the case.

The Electrolux company is moving a factory from Greenville, Michigan to Juarez, Mexico. It's not that the factory wasn't profitable, it just wasn't profitable enough. Corporate greed? Maybe, but it must be remembered that the company is responsible to the stockholders to maximize the earnings of the company to pay dividends on the shares that these investors have bought. The company is beholden to the stockholders, not to the Union, workers, or the management of the company.

The whole idea behind a Union is to first and foremost protect the worker from abuses from the company they work for. Fair wages and other benefits are also part of the contracts as well as a certain amount of job security if the company runs into problems. A Union is not about telling a company how to run its business!! If anything, the contract that the Union and company signs is to protect the worker from mistakes the company's management may make, which should help the company plan better.

The issue that I have is that the Union Leadership should not blindly endorse any one politcal party over another - it should pick and choose political candidates on their merits. I don't believe that Ronald Reagan was endorsed by the Unions, but he helped set up an economic boom that lasted through the Bush (1) & Clinton years, and that hugely benefitted the Unions. Unfortunately, that has been undone by shortsighted but long-reaching treaties such as NAFTA, CAFTA, and China's hugely profitable (for them) trading status.

So when you vote this upcoming midterm election, have the presence of mind and the foresight to investigate each candidate. Vote for the candidate of your choice based on his/her merits, and not their political affiliation. Don't vote for someone merely on the base that an organization that you belong to says to vote for that candidate. It's your vote, and your choice.

Business Buzzwords

CNNMoney recently asked readers to write in about the business buzzwords they found most annoying. Here's the results:

• New paradigm and its evil twin, "paradigm shift"
• On the same page. 78 readers wrote to say they would be happy never to hear anyone say this again. Ever.
• Value proposition. "What is this exactly, and why does everything have to have one?" wonders Valerie.
• Core competencies. "If I hear the head of my division use this phrase one more time, I'm going to throw something at him," writes Jim. "Something heavy." Yikes. Division heads everywhere, you've been warned.
• Bottom line when it refers "not to an entry on a financial statement but to a conclusion the speaker wants to force you to accept."
• Shooting someone an e-mail or firing off an e-mail
• A challenge or an issue, when what the speaker really means is a problem
• No-brainer
• "At the end of the day..." to start every other sentence
• Hit the ground running.
• Touch base
• Going forward, as in, "Going forward, let's try not to use so many dumb clichés." Wonders Dave M: "What else would we do? Go back in time?" As if!
• Win-win.
• Mission-critical. Some hate this expression because it is frequently used to imply that one person's contribution to a project is less important than someone else's. Others, meanwhile, just think it sounds pretentious when businesspeople talk as if they were flying the Space Shuttle.
• Thought leader.
• Reference used as a verb, as in, "Please reference page 12 in your training guide."
• Ping, as in "I'll ping you on this when I hear back from legal."
• There is no "I" in "team." Some are so weary of hearing this, they've taken to snapping, "But there is an 'M', and look! An 'E'!"
• Radar screen, as in, "I'd like to get on your radar screen for a meeting next week." Asks Oliver, "What are we, air traffic controllers?"
• Bleeding edge
• Keep me posted
• Circle back, as in, "I'm just circling back to you on this."
• Cheerleader, as in calling oneself a cheerleader for a project or goal at work.
• One off. This is a comparatively new figure of speech frequently used to mean "privately," as in, "You and I will talk about this one off, after the meeting." It is also apparently why, according to many readers, nothing gets decided in meetings anymore.

Anyone have their favorite buzzword?

US Under Economic Attack

Is there now any question that the United States is under economic attack from all corners of the globe including our own country? If you don't think so, here are a few things to chew over...

First on my list is the number of jobs that have been exported to countries around the globe in search of cheaper labor. Most recently, the country with the world's largest population (China, for those of you in Rio Linda) is now the hot spot for companies to invest and build factories in. So much so that Mexico is crying in their tequila & Corona over the loss of jobs as companies move their operations from Mexico to China. No wonder that Mexico is now exporting their people to the United States so they will send money back to the land of sombreros.

Many of the heavy equipment & machine tool manufacturers have closed up shop in this country and have moved to or are owned by companies overseas. It seems that the majority of companies supplying equipment to the automotive industry are now either Japanese or European owned. This does not bode well for long-term growth.

One of the reasons for the Euro currency was for the European nations to compete economically with the United States. In some respects, it has succeeded - the dollar has been devalued vs. the Euro, making it harder to sell United States made goods in Europe. But nothing like the goods made in China.

China, I believe, represents the real threat to the United States and the world. The amount of money being poured into this Communist nation is staggering. The question is now what isn't made in China? It seems that the majority of items that we need for everyday life comes from China. And here's the kicker - China could nationalize all the factories and industries that were built by foreign countries/investors, and get away with it! How, you may ask?

In short, China has everyone by the economic short-hairs. China owns a massive amount of US Treasury Bonds as well as in other countries. If China dumped (i.e., sold) these bonds on the market, the world's economy (especially ours) would go into a massive recession. Our currency would become almost worthless overnight. And to back that up, China has the world's largest standing army with the largest population. Technology-wise, they are not up to par with the United States, but Mr. Bill helped them a lot with missle-guidence technology. What they may lack in equipment, they will make up in human bodies...

Although I mentioned the previous Democrat administration in the above paragraph, this is not isolated to the various Democratic or Republican administrations. Neither one of these parties is particularly friendly to the American worker, no matter what the spin they put on it. Various treaties (like NAFTA) and granting of Most Favored Trading Status to China is not the domain of either political party. No, these parties are driven by power and greed, and they will sell us out for either or both.

I keep hearing the words "level playing field" but have yet to hear or see anything that our duly elected leaders have put into action. While I know that protectionism is not the right path to take, I do begin to wonder. Other countries bend over backward to protect themselves, but our politicians seem hellbent to giving ours away. One sign of this is the debate on immigration reform, to which I say, enforce the current laws!!! But I digress...

Our attention is consumed by the war against terror (manifested by Iraq), immigration, political & ideological turmoil, and yet the real backbone of this country is dissolving before our eyes. The very measure of our country's success is disappearing - the middle class, the American worker. Somehow, I don't think that the "service-based economy" is going to cut it.

Let your elected representatives know of your concerns, and also let them know that they need to earn your vote for this election and the next, and party lines be damned!! This is your country - VOTE!!

Is It Unpatriotic To Not Buy American Cars?

Delphi, GM, and the UAW announced yesterday afternoon that they have reached a tentative agreement concerning wages & benefits for Delphi workers. I've only heard bits & pieces of the agreement, and have yet to look it over, but make no mistake - the troubles for GM, Delphi, and the UAW are far from being over. Considering that Dana Corporation, another automotive parts supplier, recently filed Chapter 11 demonstrates that domestic car parts suppliers are in as much trouble as the automakers. What is also apparent is that Dana did not have the same UAW pension/benefits burden as Delphi, and that is cause for concern.

Coincidentally, the following article was sent to me this morning, and I felt that it had to be passed on to the readers of this blog.

Is It Unpatriotic To Not Buy American Cars?
By Roger Simmermaker, Special to FCN Online

As I sat in an Orlando studio on Jan. 24 waiting to be interviewed on Fox News' "Hannity and Colmes" for the first time, that seemed to be the question I was going to be asked to answer if the introductory comments were any indication. In the studio in New York was Malcolm Bricklin, founder and CEO of Visionary Vehicles, who plans on importing cars from China by 2007. Ford had just announced plans to lay off 30,000 workers, and since even Mr. Bricklin (to his credit) says he doesn't want to see so many Americans join the ranks of the unemployed, it was a good question to ask. But the show started with asking Mr. Bricklin a different question and by the time the cameras pointed to me, I was given a different question as well, so I never really got to answer it.

But as I continue to think about it since that interview, the answer I would have given to Sean Hannity is the same as my answer today: If it's unpatriotic to destroy the American middle class, then it's unpatriotic to not buy American cars. As a country, we're drowning in a sea of red ink, and as consumers (those who really should know better, anyway) we're drowning is a sea of "what's in it for me."

Since President Bush has all but ruled out any government help for either Ford or GM saying they have to make a product that is "relevant" (did you know Mr. Bush himself owns a Ford pickup truck?) it's up to the American consumer to realize that a bankruptcy for Ford or GM or both is definitely not in the national interest. Not only would hundreds of thousands of workers lose their jobs, but about 450,000 retirees would be de-funded. These retirees on fixed incomes would see smaller pensions and reduced medical benefits. The workers that remained would see massive cuts in benefits as well.

Big deal, you say? At least American companies still offer their workers pensions. According to a recent article in The Tennessean, Nissan North America new hires won't be able to count on a company pension when they retire. And if you work for Nissan and didn't happen to reach the age of 65 by the end of last year, you won't be participating in the company-sponsored medical plan either.

If American companies can't remain successful and shoulder the burden of health care for their workers, the rest of us will likely pick up the tab in the form of higher taxes through expanded entitlement programs, which are already growing at a rate of 8 percent a year.

84% of all federal spending of our tax dollars already goes towards the "big three" untouchables: interest on the national debt, national defense (including homeland security) and entitlements such as Medicare, Medicaid and Social Security. So much for conservatives who wish for smaller government. Generally speaking, few of us want to invite more government intrusion into our lives. But a significantly smaller government these days would result in benefit cuts that would ultimately affect all of us. The days of those who want tax cuts because it means more money in their pockets and means benefit cuts only for someone else are over.

So what's your reason for not buying American cars and trucks? I've heard (and disproved) them all but I'll list a few of the more popular ones here:

1. Quality. According to the latest J.D. Power & Associates Long-term Dependability Survey, Lincoln, Buick and Cadillac all made the top five for 2005. Lexus was number one and number two was mysteriously not reported by the CNN story highlighting the survey. What's even better (if you are a fan of American automakers) is that the average dependability of all GM and Ford models combined was greater than the average dependability for all the Japanese models combined.

2. Too much emphasis on "gas guzzlers." The hypocrisy in this statement is rampant since most people who make it are ardent supporters of the "free market." The trouble for these hypocrites is that a major free market principle is the law of supply and demand. According to Seattle Times columnist Shaunti Feldhahn, consumer demand for big, bad SUVs has doubled in the last 15 years. So much for the argument that American car companies aren't building what consumers want to buy. Just like American companies have been scrambling to satisfy the one percent of car buyers who want hybrids, Japanese car makers have been scrambling to catch up to Ford and GM by offering bigger and badder behemoths (at even worse gas mileage ratings than American SUVs). GM has more models with over 30 mpg. highway (2006 EPA estimates) than any other auto maker. Last month I revealed that my 1996 Lincoln Town Car now has over 160,000 miles with no signs of letting up. What I didn't mention is that my car has averaged 24 mpg since September 2001, which is a result of combined mostly highway driving during the week and mostly city driving on weekends. Not bad for a big luxury car.

3. Foreign car companies will pick up the slack. This argument implies that the hiring of American workers by foreign companies would never take place if there weren't layoffs by American companies first. Even if you view foreign investment as a good thing -- which it isn't -- foreign companies will still invest in America even if we support American companies so they can actually retain our own workers. This argument is almost as bad as the one that implies we need to destroy American manufacturing jobs in general so we can move American workers into high-tech jobs. Why not let the college graduates strapped with tens of thousands of dollars in student loans and other debts take these jobs, and protect American workers in the jobs they choose to have now?

4. American companies can do better. Better at what? What will it take for more American people to root for the home team again? Do you only root for your hometown sports team when they are winning, or do you root for them even when they are down -- no matter what? Let's see. American companies GM and Ford have won numerous quality awards, they have more domestic plants, employ more American workers, support more retirees along with their dependants and families, pay better wages than the non-union foreign-owned plants, have a higher percentage of domestic parts in their automobiles, pay more taxes to the U.S. Treasury, give more to charities for the benefit of this country, and donate more in the wake of disasters like 9-11. Need I go on?

5. GM and Ford need to make cars Americans want to buy. I saved this one for last since it the most ridiculous statement of all. General Motors has the highest market share of any automobile company. To say the company that currently sells more cars and trucks to more people than any other company in the industry -- even if that market share is falling -- is truly ridiculous. Yes, I know Toyota is gaining on GM and may overtake them this year (in worldwide market share -- not U.S. market share -- where GM has roughly twice the market share of Toyota) and GM used to command around 50 percent of the domestic market. But let's be reasonable, shall we? What company in any industry in today's super-competitive economy can command 50 percent of their market? Not even Coke or Pepsi can do that. Which reminds me -- Pepsi recently passed Coke to take the top spot in the beverage wars. Is Coke number two now because they aren't making beverages Americans want to drink? I haven't heard that one yet. Only in America and only in the automobile industry could number two be declared a loser brand. And only if it's GM, not Toyota.

The struggle for GM and Ford to regain much needed and much deserved traction has increasingly become a media war. And it's not just a media war as I reported in my September 2005 article titled Media Bias Against American Automakers. The bias towards foreign automakers has extended from journalists and other newsmakers to everyday Americans with vendettas against their home-team companies in the form of letters to the editor and blogs on the Internet. The Wall Street Journal recently ran a story titled "Are Rumours Hurting Sales" reporting on a Los Angeles resident who started a Web log called "GM Can Do Better." It's not that this individual has not heard the reports of numerous quality awards bestowed upon American automakers. It's that he's skeptical the reports are true.

So there you have it. Foreign car lovers will believe it if Toyota wins an award. But if General Motors' Chevy Impala is documented to have fewer customer complaints than the Toyota Camry, foreign car lovers will grasp at different false reasons to justify their foreign purchases. But the facts are in and their arguments no longer hold water. I'd almost be willing to bet these American car bashers haven't test-driven an American car in years. Right now it doesn't matter that GM has 82 major plants in America and Ford has 35. What matters is that Toyota, Honda and Nissan have eight plants each. It doesn't matter that Toyota and Honda average 65 to 75 percent domestic parts in their U.S. built cars while GM and Ford average 80% to 85%. If these percentages ever reverse, then it will matter to foreign car lovers. Facts simply don't matter to them when they don't happen to be in their favor. To them, as Business Week reported Dec. 12, 2005, "the economy is unstoppable as the Indianapolis Colts" and foreign purchases have no national negative effect. If you watched the Super Bowl last Sunday you probably noticed that the Indianapolis Colts weren't playing.

I'm sure that this article will not sit well with those who automatically receive it as part of their free "Buy American Mention of the Week" subscription and advocate the demise of GM and Ford. And I'm also sure I'll receive many "unsubscribe" requests as a result. But I don't really care. I don't like writing for people I don't like any more than I like giving speeches to groups I don't like. These articles are not designed to make anyone feel less of an American for their past foreign purchases, but rather they aim to persuade American consumers to make the right purchases in the future.

Those who do agree with the facts and the opinions I have presented, I urge you to forward or distribute my auto industry articles to fellow Americans that need to see them. Simply visit www.overthehillcarpeople.com < http://www.overthehillcarpeople.com/> to see the auto industry articles I've written since May 2005. I'm not sure how much time GM and Ford have left to turn things around given the obstacles they must overcome that have been put there for bogus and unpatriotic reasons. And remember, the next time someone accuses you of questioning their patriotism because of their foreign car, tell them that if it's not unpatriotic to destroy the American middle class, then it's not unpatriotic to buy foreign cars!

Roger Simmermaker, author of How Americans Can Buy American: The Power of Consumer Patriotism, published this article on his Web site, www.howtobuyamerican.com <http://www.howtobuyamerican.com/>.

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Delphi Part 3

Most of the news organizations covered the Delphi UAW picket line at the auto show. Surprisingly, they got most of the facts right.

But you know, there's a few facts that haven't really been published, at least with the usual fanfare. Here are a couple...

• Delphi lost over $5 billion last year. By one account, if the 30,000 workers earned an average of $27 an hour, that's only $1.685 billion in wages. This means that Delphi's managers through their mismanagement lost the company $3.315 billion. It doesn't seem that the worker's wages are the real problem here.
• I heard on the radio that one of Delphi's business assumptions was that the business volume from GM purchasing Delphi components would remain the same or increase through the years. That way, they could support the employee's pension and wage structure. What business model was this? From the School of Business Fantasy? This business model was a recipe for ultimate failure.

The biggest problem that everyone seems to have with this sad chapter in American business is that the executives get rewarded for screwing up the company, and the workers get nothing but the unemployment line.

GM Diversity Decision

A federal court has upheld GM's decision to not allow Christians to organize in an employee group under its diversity program. The 7th Circuit Court of Appeals ruled that GM's diversity program does not discriminate against Christians because it treats all religions equally.

The diversity program allows Hispanics, Blacks, Gays & Lesbians, and other groups to organize under its Affinity Groups program. The program's guidelines do not allow religious groups to organize.

OK, how about someone at GM wanting to organize an Anglo-Saxon group? Does anyone reading this blog think that would happen without someone from one of the "other" groups complaining or the Affinity Group management denying the application? Hah!

Or how about some Muslims wanting to organize under a Middle-Eastern group? Think they would be denied or disbanded if they started religious-oriented activities? I doubt it.

One of these days, I will need to write about whom diversity really serves, and what I have seen. There is so much BS and hypocrisy in this movement that is absolutely unreal.

Chinese Golden Parachutes

Lots of attention has been heaped on the "golden parachutes" that executives of failing or bankrupt companies receive. These people are doing such a bad job that the company that they are supposedly guiding lays off the workers or asks the Union (if the workers have one) for huge concessions, files bankruptcy, and they still line their pockets with millions of dollars in bonuses and other compensation. Is there something wrong here, or am I missing something?

The following story has been floating around for a number of years, and perhaps it's true. If so, then perhaps the executives that give themselves these huge bonuses while the company that they are supposedly managing falls apart around them should be happy they don't live in China...

As the story goes, there is a refrigerator plant in China that was producing defective refrigerators. The workers on the line told the managers that the refrigerators that they were making were bad because of the parts that were being supplied to build them and the directions of the managers to build them in a certain way. The managers responded that they were to make so many refrigerators a day, and that's what they were going to do, no matter what. So do what you're told.

This went on for several months, the factory cranking out one bad refrigerator after another. That is, until one day, a high-ranking Party official got one of those refrigerators. The next day, the Party official shows up with his escort and takes a tour of the factory. He asked & listened to the workers on the line, and ignored the managers until…the managers were escorted to the rice paddy behind the factory, lined up, and were shot by the Party official's escort (which included several soldiers of the official's bodyguard detail).

Instead of golden parachutes, these managers got the golden fertilizer award, and for once, the workers didn't get screwed over by management's bad decisions...

Sometimes, there is justice in the world, but who would have thought that it would come from a Communist country?

Unfortunately, in this country (and some others), the workers pay for the bad decisions by the company's management. Pensions gone, health care gone, jobs gone, just because some idiot makes the wrong decision for the company but a good one for him (i.e., money in the pocket). It's no wonder that the loyalty to companies is gone and everyone is in it for themselves. Examples of leadership fall through to the workers, and the examples they provide are anything but inspiring.

What is worse is that the legal system that we have for the handling of corporate cases is not protecting the promises and contracts that the companies make with their employees. "Whoops! We made a mistake! We need to cut your pension and health benefits so we can stay in business and get our bonuses!" The day that allowed pensions not to be fully funded was the day that set up the current situation. And that, readers, is no parachute for the people who work hard for a living and try to build up something for their families and themselves.

What is needed is for these executives to be forced to give up these "golden parachutes" and roll those funds back into the pensions of the people who really earned it - the employees who have literally given their lives to the company with the promise that there would be something at the end for them to live on when they retire. It's time to reward loyalty and punish excessive greed.

Ranting is over - signing off (for now).

Globalization

Globalization. World economy. NAFTA. CAFTA. Level playing field. Most favored trading status. All these buzzwords and phrases. What does this mean for the United States, and ultimately, you and your children?

Disaster, that's what it means!! What many people do not seem to understand is that the United States is in an economic war with the rest of the world, not a shooting one. We are in the middle of the bullseye, and our business leaders do not seem to care as long as they make a dollar or two for themselves and their shareholders. What's worse, our government doesn't seem to understand this concept. Here are a couple of examples.

Way back when Al Gore and Ross Perot were having a discussion (debate) on NAFTA. Al was trying to make the case for NAFTA by using the example of Valmont Electric moving their operations from Danville, Illinois to Mexico. He stated that Mexico's standard of living would eventually rise to meet that of the United States, and businesses like Valmont would stop moving to Mexico.

What an idealistic but flawed idea! As a matter of fact, it's a large load of BS. How many generations of American workers will be put out of work while this great social and economic experiment runs its course? Considering that the Mexican government sets ceilings on wages for the majority of jobs in Mexico, I would say just about the next couple of hundred years worth until all the jobs are gone from our country. As long as there is an advantage to businesses moving to Mexico or some other country to reduce their costs and maximize their profits, they will.

Second example is that there are numerous countries that subsidize their industries for economic and political reasons. France, Korea, and Japan are just a few of these countries. At the same time, they implement tariffs on US goods, and threaten economic war if the US tries to do the same on those countries products.

The problems that threaten our country's economy are many. There is not a global level-playing field as our politicians from both parties repeatedly state. Not when there are wage differences throughout the world as well as working and standard of living issues, and foreign countries protecting their own economies. Global economy is just another phrase that means that the country with the lowest (and probably worst working conditions) will get the jobs, which leaves the rest of us without jobs and no way to sustain ourselves.

What needs to be done is for our government, our duly elected officials, to put aside their political aspirations for greater power & control, get a spine, and fight fire with fire. Subsidize or create nationwide incentives for industry to grow. Raise or create tariffs on goods & services we import from other countries that are similar to what we produce domestically to equalize the values of the various products. To those people who cry "That's not fair! Those countries will raise tariffs on us & block our products from their markets!" I say, what's different from the present situation? We are on the losing end of the trading war with other countries. Would there be a tariff war? Most likely, but we should be able to use the same tools to protect our country, our citizens, and our economy as other countries use to protect themselves.

Is this protectionism? You bet! Look at Europe. They went to a common currency solely to compete with the United States and not each other. Going to the Euro standard equalized wages across all the countries of Europe, so they have the "level playing field" between themselves, and now have a larger market in which to compete with the rest of the world. Don't believe me? Do some research on your own & educate yourself.

Now I realize that the above is a very simplified solution. It's not perfect by any stretch of the imagination, but it is an idea that needs to be considered by our politicians on both sides of the aisle. Otherwise, the jobs and economic wealth of this country will become eroded to the point that we will become a second- or third-rate country. And that is a sure bet…

Delphi Part 2

More details from a Delphi management memo to the UAW acquired by Bloomberg (click here for the article) sheds more light on how far this bankruptcy is going to go.

In short, it doesn't look good for anyone that works in the Union. In fact, it's downright depressing. Where this is going to go is anyone's guess.

If everything that is outlined in the Delphi management letter comes to pass, you can forget everything that Union protection has stood for: Fair wages, job protection, representation, pension, health benefits, etc. All that the Union has fought for 50+ years won't amount to a hill of beans (and those will go fast with all the starving retirees fighting for them).

Having been on both sides of the fence, first as a salaried employee and then as a BU employee, I have seen the erosion of benefits for both the working and retired. Every contract negotiation is an exercise in who loses the least. No one seems to come out ahead, although there are those that beg to differ.

Yes, business is bad in the auto industry. However, you have to make a product that sells, and not expect the public to buy any old thing you make. The Japanese have proven that time & time again. Union built or not, the decisions on what to build still have to be made. Decide wrong, and it's the worker that suffers.