Posted on 12/07/2004 9:11:43 AM PST by ninenot
Some interesting stuff here, worthy of discussion/posting.
GM and Ford both swooned for Hillarycare.
We all know why they did so: it was the best way for them to transfer the results of their stupid bargaining (remember, it's self-interested bargaining...) to the backs of the taxpayers.
Automobile manufacturing in this country has been an embarassment - and an expensive one at that. The unions got what they wanted and now they're crying. The US should have been producing the best cars in the world. Instead the unions were striking every few years - sticking it to the rest of us.
ANd with their backing, and other like them, we will get Hillary care. The fact is is that they made those deals themselves; it is none of the government's business.
Nope. It is mostly because these workers are represented by radical left wing unions. Workers dues fund these unions. The less workers, the less the union has to push their socialist agenda...
Good stuff ~ Bump!
Interestingly, there was an article in the WSJ yesterday, that told about how the trial lawyers were putting the final nail in the coffin of the Hillarycare experiment in Tennessee, which was already having a difficult time cutting costs through denial of service (standard method of cost control in socialized medicine is denial or delay of service).
Ever since WWII, the US has become the get-rich-quick location for every other country on earth, particularly those countries that rode to financial success during the 50's and 60's on America's defense dime. We have allowed nations like Germany and Japan to become industrial behemoths at our expense while our dollars went into providing their defense umbrella. Every other country in the world relies on access to the American market for their business growth. This wrong-headed policy has gotten the US, and our primary industries, like automobiles, steel, shipbuilding, and aircraft, into an unsustainable mess. This sort of thing has got to stop. If these countries had to sink as much of their GDP as we do into providing for their own defense, then their competitive edge would quickly disappear.
I can not feel any pity for these people. Why do they feel the government (e.g., taxpayers) should pay for their problems? If they're not making any money, go out of business.
Quality control is the biggest problem, and the only way to solve that is to close all of the existing plants, fire all of the union workers and senior executives, and start from scratch.
I agree with most (99.99%) of what he says.
Only one aspect I disagree with. The label that the US is a bad or in any way less competitive place to produce.
In the last years (20 years or so) we saw a lot of car manufacturers building plants in the US. We are simply highly competitive. Our costs are LOWER than Germany/GB/France. Electricity, labor, water, logistics, taxes are all less. Productivity, rules governing hours of operation, environmental standards are all more suitable for manufacturing. Now we add in a long-term decline of the dollar, which we discussed elsewhere and you end up with a situation where it’s better to produce in the US than in many other places. Though the numbers are staggering for GM, they are also the biggest in the world with many many thousands on their payroll. Yet in comparison to Germany they are well off in the US. Example. A worker in Germany may not even make that much working for a US government contractor. He may have a salary of 1500 Euro a month (Take home). The actual price tag though is somewhere around 3200 Euro a month for the business (total price that PAE pays). In a manufacturing plant these costs are in the end (No matter how you hide it) added to the cost of the product. My point is that comparatively we are still good off.
We can’t compete in all areas, but in many. Those who are cheaper often lack the trust/security, skilled labor are remote or corrupt, lack infrastructure or the capacity in other ways to be viable. Do you really want to invest your money in some of those so-called “emerging markets”?
I think all conditions are met. Long term the future is bright. There is one aspect I agree with which our government needs to combat; Trade barriers and subsidies!
If we can’t break down trade restrictions, everything else is a moot point. If Airbus gets huge subsidies then Boeing can have a more productive labor force, cheaper fuel, electricity, water and labor, even assemble components in China cheaply and be operated like a profit driven firm. Airbus is a consortium. Those nations contributing to it get a certain share of the production. The parts of the planes are flown partially all over Europe as the airplane gets assembled in many different places, often not the cheapest manufacturer, with higher labor, electrical, water……. costs. But in the end, so what. Airbus gets a few million from the state in form of a direct subsidy and develops an airplane where a lot of the costs in manufacturing are carried by the respective governments in the consortium. When Boeing develops the 777 the costs of development are included in the price. But it gets better! Do you think that Boeing EVER had a real chance for a contract when the STATE run airline has a choice to buy the STATE built aircraft? Lufthansa, Air France and many others are partially to majority state owned airlines. Airbus has no worries about true competition within Europe and even abroad, the subsidies end up pushing the price down from its actual level. There is no doubt in my mind that Boeing would eat Airbus’s lunch if it truly were an open market.
I must be arrogant, but I truly believe that we have one of the most desirable places in the world to do business; if we can unleash it.
Low taxes (Comparatively)
Skilled labor (Trade and academic)
Affordable labor (Comparatively)
High Volume of skilled affordable labor
Cheap fuel
Cheap electricity
Cheap water
Cheap land and other resources like lumber, sand……..
Cheap construction costs
Security/stability
Stability in rules/laws (We’ll make guarantees that are nice)
Reasonable environmental standards
Reasonable labor laws (Over time/weekend/holiday work, maturity leave, hire/fire…….)
Robust infrastructure (Roads, airports, shipping ports, communications…)
Low level of bureaucracy (Easy to get INC., state and local governments will all but hold your hand if they know you mean jobs for them)
Mobil labor force
Technology friendly society (We like gizmos and are not anti “man made”)
High degree of varied land options (Need clay ground [rocket engine tests], a river[cooling], high altitude, lots of sun?)
We just need a government to open the markets. I really do believe that we can compete with anyone out there as is. We just need access and a level playing field.
Not exactly.
They were GIVEN what they wanted by a bunch of spineless execs.
And (since 1970 or so) we did NOT "have to" pay for it--there were Japanese and German alternatives.
We did pay for it!
The US had the opportunity to dominate the world market for automobiles. Instead we turned out pieces of junk. The market responded by buying foreign.
Truer words were never spoken.
But the FreeTraders (FreeTraitors) will take you apart for that...
The issue largely being walked past here is what constitutes competition and what constitutes protection. When a foreign automaker comes to the states and competes against local producers legally and on an even playing field, competition exists such that the thing which is the object of competition becomes the quality and usefulness of the goods. That is competition in the real sense. And that is exactly what tarrifs used to ensure, that competition existed on the quality front - not on the wage and cost front.
Wages and cost of materials are a local market phenomenon that differ from one market to the next. Supply and demand works within a market as long as it's limits are defined and restricted to that market. On the world stage, supply and demand becomes a matter of markets competing - again, on quality of product. When they're competing based on cost of labor there can be no equity. And that is what's broken. Tarrifs were dropped to favor competition based on labor and material cost. And in that environ, we'd have never built this nation into a superpower as we have. There is no argument which can successfully plead otherwise.
Protectionism is shouted by those too greedy to care about more than their own checkbooks. But that word is shouted in willful ignorance of what protectionism is. Protectionism disallows access to the market. Duty required on trade is not protectionism as the entity paying the duty has access.
The point of the duty is to level the playing field to stop precisely what is going on now - subversion of markets.
Subversion is a real and ongoing process of attacking a country - not with canon, tank and battleship, but with pens. One subverts an economy by suppressing wages, destablizing currency and hampering the system's ability to sustain itself. That is what is happening to America as we speak. This nation has lost Billions in real dollars from the economy that are no longer being either taxed or spent here. That is money that isn't coming back and is not a single year impact not to be repeated. As long as wages that were paid to Americans remain in foreign lands, those wages are taxed and spent in those foriegn lands - not in the US. The only footprint of them is in stock. And dividends are extras, they don't pay the Bills unless you're so filthy rich you don't have to worry about money in the first place.
Yet here is where we are being sold a bill of goods. The stock price is being pointed to as evidence that we're still ok. This is like watching a guy being blown to bits by stepping on a landmine and saying "he'll live, don't worry" and pointing to the intact untouched though decapitated head as evidence of the health of the patient. Literally, we got a pile of mush and a healthy head.. this is a disconnect that speaks volumes; but, which we're supposed to be too confused to get - thus the ongoing propaganda campaign.
America gets it despite the propaganda. They understand that it is a threat to the economy and that it must be dealt with as well as the illegal immigration issues.
America isn't asking the Government to protect GM from competition. America is demanding it's representatives in Government to restore the tarrif system and protect our economy from the subversion that is ongoing so that Qaulity of product is the determinant factor again. Right now, the system is merely a program for dumping at product level and wage level to destroy the US market - what's left of it. Corporations are profiteering on the destruction of the US marketplace. And they've bought the assistance of Congress.
In this environ, GM's retirement accounts and employee benefits are a moot point. Their survival in the face of massive dumping is the issue. And we may have to fight another war of independance from tyranical rulers to correct it. Short of that, a lot of men should be impeached if not jailed for treason for what's going on. It's beyond an outrage.
Seems like these countries given up the idea of being the world's #1 and have gladly relinquished the role to us. Somehow they don't feel as threatened as we believe we are. So the problem is ours, not theirs.
I wrote "If these countries had to sink as much of their GDP as we do into providing for their own defense, then their competitive edge would quickly disappear. "
You wrote "Seems like these countries given up the idea of being the world's #1 and have gladly relinquished the role to us. Somehow they don't feel as threatened as we believe we are. So the problem is ours, not theirs."
Actually, I agree with your assessment. The problem is, indeed, ours. The bureaucrats and executives at the helm of our country seem to have adopted the strategy that America will be the number one military power in the world, providing the defense umbrella for every nation on earth, in exchange for propping up foreign countries' economies by giving them unequal access to American markets. This allows our "allies" to grow their economies (and welfare states) at our expense by requiring no defense expenditures of foreign governments, with the American taxpayer (worker and soldier) left holding the bag. We've become the modern-day equivalent of the Hessians.
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