A Powerful Observation That Changed My Mind on Helping the Automakers.

[David Zephyr]

I truly doubt that all three automakers can emerge from the quicksand they are now in. At most, perhaps Ford and a really downscaled General Motors might make it with an infusion of federal taxpayer help in loans and, yes, even in bailouts, too.

Another large GM dealership has closed locally. That large piece of empty real estate looks ghostly and ominous. And tragically sad.

I've posted that I thought that all three automakers, especially John Snowe's Chrysler, should be allowed to fold and to generate a Manhattan project to convert those industries into green industries producing solar voltaic cells, wind turbines to provide a "domestic" industry capacity that Obama's $150 Billion plan for alternative energy will require. Rapid rail is another area where this nation is 50 years behind the times. The Rust Belt can and should be involved here, too.

The hard fact is: We need to make shit in this country.

The UAW and its workers have now lifted their proud arms for another draining of their blood in concessions as never before. They have walked the extra mile that the corporate executives have not even considering viewing.

I am very pleased to hear Obama say now that some of these executives need to get out of the way, lose their jobs.

I hope that any restructuring also empowers the workers with equity in whatever of these corporations remain. Harley did it. So can they.

In any event, there is a very powerful opinion piece in the Business Section of the Los Angeles Times today written by David Lazerus titled "Why Were Wall Street Workers Not Asked for Concessions?" where Lazerus says "Autoworkers stepped up to the plate to save the car industry. White-collar workers, on the other hand, weren't expected to do the same when financial firms went to Congress with hat in hand."

Here are a few paragraphs from this must-read and must-share article for my sisters and brothers at the DU to read. Please pass it along to others:

----

The president of the United Automobile Workers union, Ron Gettelfinger, cut right to the chase when he announced last week that autoworkers were prepared to sacrifice job security, funding for retiree healthcare and other contract provisions to help salvage their fast-sinking industry. "Concessions -- I cringe at that word," he said. "But now, why hide it? That's what we did."

Say what you will about the role of the union in exacerbating Detroit's financial troubles, one thing stands out: Blue-collar workers are taking it in the shorts as part of their employers' efforts to secure some bailout bucks from Uncle Sam.

I don't recall white-collar workers on Wall Street stepping up with similar concessions in return for their companies' receiving billions of dollars in taxpayer cash.

"There is absolutely no excuse for a bailout without significant sacrifices by all stakeholders," said Robert Reich, who served as Labor secretary under President Clinton and is now a professor of public policy at UC Berkeley. "We should be making everyone on Wall Street jump through hoops, not just the automakers."

The UAW, long criticized (unfairly, I believe) for being too powerful and too greedy, has done the stand-up thing in offering concessions to protect jobs at a perilous time for the auto industry.
White-collar workers on Wall Street, many of whom pull down hundreds of thousands of dollars a year in salary and bonuses, have shown no such spine or self-sacrifice as their employers pass the hat among taxpayers. Reich is right: A bailout should require concessions from all stakeholders, not just the top brass and certainly not just the public.

By that standard, the auto industry has earned its piece of the pie, while Wall Street firms, silver spoons in hand, are enjoying their dessert on the house.

Full Article: http://www.latimes.com/business/la-fi-lazarus7-2008dec07,0,6387971.column

[Tansy_Gold]

1. K & R and a comment/observation

Before I even get around to reading the full article, I want to make one point. And I want to make it clear that I'm deliberately making this point BEFORE reading the article because I don't know if Lazerus (what an apt name!) makes the same point.

There have been white-collar workers who have lost their jobs because of the financial industry melt down, both on and off Wall Street. Whether they are mortgage brokers or data entry clerks or whatever, a lot of people are out of work. They didn't have a UAW to make concessions for them. And most of them weren't making six-figure salaries.

There have also been a lot of temp workers who never had real jobs to lose. They never had any bargaining leverage. They got paid for the time they worked, had little to no benefits. They filled a lot of jobs in the financial services industry.

It's easy to focus in on one aspect of one industry, whether to lay blame or offer bailouts. It's much more difficult to look at the wider picture and determine where fixes need to be made that really do fix things, rather than plugging one leak by pulling the plug on another.



Tansy Gold

[David Zephyr]

2. Tansy Gold, this is why I like the DU. You makes some very good observations.

That the "discussion" in General Discussion that I like. Thanks for your comments. I think you will like the article.

[Diane R]

3. I heartily agree with Tansy Gold.

[druidity33]

4. do we have numbers?

for how many jobs were lost on wallstreet? How many at Lehman that weren't absorbed by other institutions?

How many executives gave "concessions"?

How many jobs would have been lost had we not "bailed everyone" out?


Sincere questions... no offense intended.


:shrug:

[Tansy_Gold]

7. No, we don't have all the numbers

We know about the 52,000 Citi is cutting. And of course those may not all be technically "on" Wall Street, but I did say in my post "on and off Wall Street." (Anyway, I think I did.)

According to the Bureau of Labor Statistics report released 12/05/08 (the basic unemployment report everyone is talking about) as posted at http://www.bls.gov/news.release/empsit.nr0.htm --

In November, employment in financial activities continued to decline
(-32,000). Within the industry, job losses occurred in credit intermedi-
ation and related activities (-16,000) and in rental and leasing services
(-9,000). Job losses in financial activities have accelerated over the
last 3 months, bringing the total decline since December to 142,000.


Now, these are job loss numbers as reported by the companies themselves and are a NET figure, so any pluses due to hiring/absorption at one firm offset the losses at another.

I do not know how the figures for total auto industry employment are arrived at. Those figures could include suppliers as well as vendors (dealers, etc.), non-production as well as production.

I don't know right off the top of my head of any upper-level FIRE (finance, insurance, real estate) executives who have taken pay cuts or made concessions. I think maybe there have been some, but I don't know the names/firms.


Let me add, too, that I have a rather extensive background in the most grunt-oriented area of accounting -- manufacturing standard cost accounting. I've not posted much on the threads related to the $80/hour auto worker pay bullshit because to explain it to some of the know-it-alls on DU -- some of whom I've already alerted on, by the way -- would require the equivalent of a short course in cost accounting. Suffice it to say that the $80/hour figure is just what I said it was -- bullshit. The figure could just as easily be upped to $100/hour, or even $300/hour, depending on how the numbers are applied in terms of overhead allocation and labor burden. None of you want to know any more about it than that.



Tansy Gold

[druidity33]

9. thank you for replying...

Truly, i don't know what to think.

I feel for anyone losing a job. It's rough out there. I'm part of the "underemployed" statistic, surviving on PT work.

I hope to smell solutions in the wind soon...

[Tansy_Gold]

11. I'm also "under-employed" and have been for four years.

I guess I'm just used to it. :shrug:

But again, it's easy to single out one aspect of a catastrophically failing economy without looking at all the ramifications. No one part of it operates independently of the others and the people who haven't figured that out yet still seem to be the ones saying/doing the most. And probably most of what they're saying/doing is not going to help.

Probably the most sensible thing to do would be go back and find the point at which things started to go wrong and figure out what CAUSED them to go wrong. There will probably be a lot of things that need changing and there are probably a lot of people who BENEFITED from those changes who are going to resist undoing them. What we have to do is stop listening to the whines of the have-too-muches.



Tansy Gold, one of the ain't-got-hardly-nothin's

[KoKo]

5. True what you say Tansy....they kept the "Band Rolling" on non-unionized workers

too. And thank you for pointing that out. Now the Banks and the Stockbrokers and the rest of Financial Industry..plus the Union Workers are up to the Buffet. What about the rest of the folks who were hired when times were good who have no constituency fighting for them.

Although the "US Chamber of Congress Lobby" is the one who pushed the non-unionized "Service Industry Jobs" (flipping burgers of making sandwiches and the rest at "non-union shops" and the Real Estate Inustry who had many non-unionized workers who were peripheral to the "Chamber of Congress" ....but they must assume the "Chamber" with the Financial Bailout will some day get down to the bailout of those "pesky mortgages" and bail out those who supported the "Chamber" who were "down the food chain." (If you get what I mean about the hypocrisy of it all.) Union vs. Non-Union...Wealthy Bankers vs. the poor stiff who got hired to handle 401-K's and IRA's...who didn't know about all this crap and the folks selling real estate who weren't involved in the Mortgage shenanigans.

All those hurt "down the food chain" don't really have anyone fighting for them...is what I think...:shrug:

Sorry...running out door and my post sounds jumbled.

[Confusious]

6. Danm RIGHT!

The UAW, long criticized (unfairly, I believe) for being too powerful and too greedy, has done the stand-up thing in offering concessions to protect jobs at a perilous time for the auto industry.
White-collar workers on Wall Street, many of whom pull down hundreds of thousands of dollars a year in salary and bonuses, have shown no such spine or self-sacrifice as their employers pass the hat among taxpayers. Reich is right: A bailout should require concessions from all stakeholders, not just the top brass and certainly not just the public.

[David Zephyr]

16. "the stand up thing". They have indeed.

The UAW are the heroes in this entire auto melt down.

[MadMaddie]

8. One of the most important statements

<snip>
The hard fact is: We need to make shit in this country.
<snip>

Nafta and other bullshit trade agreements need to be scrapped, the US has not benefitted at all.

America needs to produce all basic essentials that the country needs: food (farming), vehicles domestic and military(auto industry), building and manufacturing products, tools etc.

We have Americans being poisened by tainted food products. We have manufactured goods that are coming in with lead and other banned substances. We have medical supplies coming in tainted. Is it just me or is it obvious if we cannot control the quality of products then they should not be imported.

For companies that want to continue to export jobs and products, they must lose all tax breaks that * guaranteed them.

For companies that bring jobs back into areas that need the jobs, they get the tax breaks and government help to get started.

[NJCher]

10. easier said than done

I'm with you 100 per cent on what you say but a couple semesters ago, I gave a college class a theme assignment for the semester. It was on China and imports into the U.S. Some groups had the topic of dangerous products from China, others had to search expert economic opinion on how feasible it would be to ramp up manufacturing in this country.

Much to my surprise and dismay, it would be quite difficult. There is a whole business structure now built up around letting China do all the manufacturing. There's way more to it than that, though.

Also of great concern to me was the dearth of material on this subject. We had some very good academic librarians helping us with our search and probably the most disappointing part of this project at all was that no one was looking, thinking, or talking much about what this overreliance on China has done to our country.

I, too, would like to see manufacturing back in America.

And what you say about the dangerous products hits home, too. How many years did we struggle for product safety rules and then to have them all go out the window because of cheap products from China? It makes me crazy.



Cher

[amandabeech]

12. The business model of sending all manufacturing to China

really accelerated in the very late '90s once China was admitted to the WTO.
The Mexico Madness started earlier in the '90s with NAFTA.

A lot of the deindustrialization happened in the last fifteen years.

If we could deindustrialize that fast, there must be a way to significantly reindustrialize over a similar period.

We must "just say no" to continued decline and vote out anyone who clings to the religion of simply unworkable, and unenforceable "free trade" and purposeless globalization because they can't adapt to change.

[David Zephyr]

18. It isn't that easy to ramp back up manufacturing. And that's the tragic part in this.

Our manufacturing hard tooling is gone, either scrapped or shipped overseas. Our tool making know-how is gone. Those highly skilled tool makers who made everything from injection molding and extrusion dies for polymer production, to those that machined hard dies for punching, stamping and forming sheet metal, to those that understood screw machines, working lathes, mills and the list goes on forever. That know-how that takes generations to develop and hone is gone.

Our industrial engineers and manufacturing who layout factories so that material flows in and out expeditiously and who take the prototype to full scale production, they are now working in other industries and our universities are not producing these folks much anymore either.

By the 1800's, the U.S. had already become the leader in the world in manufacturing. Even as a young nation, we were filling the homes of the world with products.

The late Paul Tsongas called manufacturing "the first domino" that supports all the other industries from service to financial.

Jesse Jackson astutely clear back in the 1980's asked an audience, "How many of you own an MX missile?" No one raise their hand. He then asked "How many of you own a television set?" They all raised their hand. As early as the mid-1980's, the U.S. had given up making televisions.

This began under Reagan, continued under Clinton and fast-forwarded under Bush/Cheney.

I don't blame the Chinese. They are watching out for their own people. They don't try to police the world and don't have 200 military bases strung all over the planet and don't have knee-jerk leaders that react to every crisis with a military mind-set. The Chinese are not in Iraq. The Chinese are not in Afghanistan. They mind their own business. We should learn from that.

You are so correct in that NAFTA was a bad deal for the U.S. Our rush to cheap labor in China started in the mid-80's before the WTO as their "enterprise zones" were first created.

And yes, I agree with your statement: "We must "just say no" to continued decline and vote out anyone who clings to the religion of simply unworkable, and unenforceable "free trade" and purposeless globalization because they can't adapt to change."

As I said in my OP: this country needs to build things again. It is possible. It won't be easy though to recreate that manufacturing infrastructure that took 150 years to build up.

[Hannah Bell]

21. It would certainly be easy if there was the will. "150 years" is irrelevant.

We're not reinventing the wheel here.

Didn't take 150 years in japan after they were bombed out in ww2. Nor in china.

[David Zephyr]

22. I didn't suggest it would take 150 years to rebuild it.

I own two manufacturing firms and have done so for twenty years.

I know just a little bit about this subject, as many here at the DU know firsts hand.

Still, every point I made is relevant.

Honestly, I doubt that we will ever really return to a strong manufacturing base. Americans don't like it. It's cultural as well as political.

[amandabeech]

24. Perhaps I'm more optimistic than you are in our ability to ramp back up

is that I'm from Michigan and I know people who have the skills you mention in your first paragraph.

Many of them are unemployed or underemployed people in their 40s, 50s and 60s.

I believe that they are capable of going back to work, increasing their hours and supervising and teaching either on the job or at the community colleges.

Speaking of community colleges, many of the communities and one of the 4-years in Michigan offer AAs in tool and die and other industrial specialties.

I think with some incentives, those programs could gear back up pretty quickly.

I imagine that some of the other rust-belt states have similar circumstances.

It's not too late now, but it will be more difficult to do in 10-20 years when more are too old to really help, even in an advisory capacity.

[BR_Parkway]

13. The US benefitted in the way it was originally supposed to from NAFTA

It guaranteed us access to Canada and Mexico's oil (the bulk of our imports) - all the rest of it has been other corporations just taking advantage of the loopholes to line their pockets

I wish I could find the article on the business owner who shipped jobs down to Mexico to exploit the cheaper labor - then filed for "compensation" from Uncle Sam because his business had been hurt by NAFTA

[reclinerhead]

14. I want that also

But take the recent Wal Mart threads, and all the people that came out defending their shopping at Wal Mart.

If American's will always take the easy way out, and screw ourselves over to save a few bucks, then our manufacturing base will NEVER come back.

How can manufacturers compete with China, and pressure from Wal Mart and others, with regards to pricing and terms?

Something else needs to change... Like tariffs on imports from China to stimulate local manufacturing.

[newtothegame]

15. I would somewhat disagree with this actually...

Didn't white collars make concessions by giving up their jobs? I thought Citibank just fired like 50,000 people.

[hughee99]

17. And while unions have spokespeople whose job it is to speak

for ALL union members, Wall street workers are essentially each on their own. You can ask for union concessions by talking with the union leadership. For wall street workers, it's basically either a separate negotiation for each worker, or the firm just saying "here's what we're going to do to you, if you don't like it, here's a quarter, call your mom and tell her shit didn't work out and she needs to come pick you up."

[lumberjack_jeff]

20. There are plenty of jobs handling paper.

It's not a core function of a competitive society.

[lumberjack_jeff]

19. "The hard fact is: We need to make shit in this country."

Egg-zactly.

If Detroit folds nothing will rise, Phoenix-like, from the ashes.

[Tashca]

23. My mind is changed too

I have changed my mind recently too……and I agree…”We need to make shit in this country.”
During the eighties, with all the jobs leaving and talks of bailing out various industries. In my holier than thou attitude I would suggest if everyone thinks free markets are the way to go….let em’ fail!! That will teach everyone what a stupid idea this was. Now I realize that is what would be called “cutting off your nose to spite your face.”
I think that old attitude was still in the back of my mind when this problem was first presented with the Big 3. I now realize how short sighted my attitude was. We need this bailout and I am pleased the Congress is making it harder for them. Maybe the possibility of a new Presidency has helped create a backbone? One can only hope…

Manufacturing….or making shit here…..can be helped by tax incentives and disincentives. Reversing the last thirty or more years perhaps. We also need to address other potential problems. Wages to me are not a problem. BUT we have also exported our pollution problems along with the wages…..We fight wars to keep the energy flowing to our production facilities in Asia and around the world. We do not talk about these problems destroying ecosystems around the world. If we talk about bringing manufacturing back we need to address all these concerns.

I’ve had a clarion call. You work in manufacturing….I work in production Ag. I have watched with increasing alarm as to how fast the rest of the world is supplying us with much of our regular food and processed food. We’ve seen in the news about contamination of our products from other countries. Environmental standards are more lax in most countries….ecosystems are being destroyed to increase production of these cheaper products……I’ve come to realize….this is all related.

[Joe Fields]

25. I'm sorry, but I can't figure out why you would have been against it

in the first place.