First, Tom Johnson shares this treasure:
In light of yesterday’s discussion of education in China, a recent version of the Shift Happens/Did You Know? video?
And here is a nice timewise illustration of the shift that has always mattered most to the United States:
Michael Cook says:
How unfortunate is it that when legislators actually do the right thing, the Treasury undermines them. The Union and the Automakers made their bed, now it is only fitting that they lie together.
What I found even more interesting is that the sticking point was wage parity by the end of 2009?! So you would rather make nothing, than to make the same amount as your competitors? I have always disliked unions and as hard as it was for me to imagine, I like them even less now.
I would also like to add that all of those blue collar workers that were decrying Wall Street for our bailout, now seem to have had a change of heart now that it is there turn.
Perhaps these bailouts are not so different, but where does it end. Is it unfair that some firms go bankrupt and everyone else gets a package? Sure it is, but at some point free money has to stop.
December 12, 2008 — 9:02 am
jay says:
The Did You Know video was thought provoking for sure.
December 12, 2008 — 10:20 am
penny says:
We live in exciting times! It’s amazing to look back at pictures of my dad (born in 1919) when he was a kid and see dirt roads and horseback riders in the suburbs of San Diego. And then contemplate how different and amazing the future is. P.S. I had no idea the population of India was growing so fast.
December 12, 2008 — 12:03 pm
Vance Shutes says:
Gee, Michael. When the government wants to kill the major industry in your region, I’ll be right there cheering them on. And can you blame me?
Have you no idea that shutting down any/all of the big three will directly affect you, in your town, and your business? It will affect everyone, including BHB, BHR, and any/all of the contributors here.
Why the hell does everyone in the US want to crap on Michigan right now? To “teach them a lesson?” Yeah, right. Won’t you be surprised when your local big three dealership goes under, leading to the failure of your local coffee shop, quick oil change, bank, and just about every other small shop. Don’t come crying to us here in Michigan. We’ll all be gone by then.
December 12, 2008 — 5:02 pm
Robert Kerr says:
When the government wants to kill the major industry in your region, I’ll be right there cheering them on. And can you blame me?
Vance, the government isn’t killing the carmakers, it’s simply refusing to shovel more billions into their cash furnaces to keep the fire lit for another 3 mos, with no real plan for the future.
A remarkably greedy UAW and grossly overpaid, inept and uncreative executive staffs are responsible for driving the stake into the carmakers, not the government.
Chapter 11 may be the only way to motivate these bloated, inefficient, corporate behemoths and their unionized workforces back to globally-competitive status.
December 12, 2008 — 6:26 pm
Thomas Johnson says:
“The Union and the Automakers made their bed, now it is only fitting that they lie together.”
And we get screwed. (sorry-couldn’t resist)
December 12, 2008 — 9:04 pm
Teri Lussier says:
The only new car I ever bought was a Subaru. It was a piece of shit from the start. I once owned a Toyota that was so rusted through that after a hard rain I’d end up with .5 inch of water pooled in the floor, sloshing around as I drove… proving that everyone’s shit stinks…
Hi Vance-
I do not know how my city is going to survive. Honestly. Seriously. I do not have a clue how it will pull itself together, how it will live through this. It’s heartbreaking for so many reasons, BUT. The government should never ever be in the business of bailing out failing industries. Ever. They made a huge effing mistake with Wall St, and as painful as it to watch the regionalism, and the chortling, and the Rustbelt rubber necking by the rest of the country- who is going to feel the bite as well- a bailout is not the answer to our problems.
December 13, 2008 — 5:58 am
Vance Shutes says:
@Robert – Agreed, it’s not the gubmint which has killed the auto industry, but it is presently in the position to salvage what little remains. Also agreed that both management and union, through their collective greed, share the blame for the situation the “big three” find themselves in. But what troubles me is the short-sightedness of thinking “let them re-organize – that’s what’s best for them.” Greater minds than ours have speculated on this approach, and have voiced their opinion of the coming doom in such a scenario. THAT is what troubles me most.
@Thomas – “And we get screwed. (sorry-couldn’t resist)” True. Very true.
@Teri – Agreed, a bailout is not the answer (Congress was debating a LOAN – to be repaid). So, what is? Is it really better to stand on the sidelines and cheer on “no bailout”, while our clients all around us suffer? Is it really better to let the big three die, and lose our most significant national manufacturing base in the process? What happens when we need that manufacturing base for a new “arsenal of Democracy?” What then? Will we call on other nations to build our planes, tanks, trucks, and other military arsenal? Or, shall we just capitulate now?
So let’s think through the failure of the big three. Three million jobs affected through the ripple effects(ie, lost). Three million taxpayers go from paying taxes to living on the gubmint dole. For the rest of you, that means YOUR taxes will help those three million subsist. For a long time. Would you rather have that, than use $14 billion of your money as a LOAN now to salvage most, if not all, of those three million jobs.
Something to ponder this cold weekend in the midwest.
December 13, 2008 — 8:10 am
Teri Lussier says:
Vance-
We’ve discussed this privately, and you know that I’m in Dayton, I want to see this city succeed.
>Is it really better to stand on the sidelines and cheer on “no bailout”, while our clients all around us suffer?
You addressed this to me, but you know that I’m not standing on the sidelines, or cheering. This is frightening. Absolutely the darkest days for this city that I’ve ever seen, possibly, quite probably, some of the darkest days this city has ever known. Do not suggest that I’m happy about this. Do not question whether I realize the pain and suffering this is going to cause. That is real. That is inevitable. That is painful to my very core.
>Is it really better to let the big three die, and lose our most significant national manufacturing base in the process?
Bankruptcy is an option, that might be a better long run solution.
>What happens when we need that manufacturing base for a new “arsenal of Democracy?” What then? Will we call on other nations to build our planes, tanks, trucks, and other military arsenal? Or, shall we just capitulate now?
Toyota, Honda, Volkswagon…. Smaller GM, smaller Ford, smaller Chrysler? A new opportunity for someone else to step up?
Vance, if I had the answers I’d be letting people know. We are going through a very painful process- a purging. It hurts like hell. Will we live long enough to see our cities recover? I don’t know.
>Three million taxpayers go from paying taxes to living on the gubmint dole. For the rest of you, that means YOUR taxes will help those three million subsist. For a long time.
All true. You and I already see this everyday of our lives. Other people might not.
None of that means that I think the government should be involved in bailing out, or in this case, a loan ( I stand corrected, thanks). It’s my head against my heart- but- if we can isolate the majority of the pain to a small part of the country, then the government should do that- every time, though. Not just for the Rustbelt…
Don’t beat me up here, Vance. I’m really not the enemy.
December 13, 2008 — 8:57 am
Vance Shutes says:
Teri,
Beat you up? Never. I enjoy the comraderie of BHB, and our friendship too much to look to beat you (or anyone else) up.
And while it is “my head against my heart,” I’m sure not going to fall on a sword in Michigan and Ohio to “isolate the majority of the pain.” That’s not in my clients’ best interests at all.
December 13, 2008 — 9:30 am
Robert Kerr says:
Agreed, a bailout is not the answer (Congress was debating a LOAN – to be repaid).
A “loan?!”
The proposal that died this week had no guarantees and no collateral for security. Where I come from, a loan with no collateral is a handout.
Even NINJA mortgages had better terms, at least the lender got the house in default.
The dead proposal had no Congressional or public oversight, no stock, no ownership, no written promises and consequences, no concessions, no nothing … just a fat check and an unnamed “czar” with unspecified transparency, policies and duties.
December 13, 2008 — 10:41 am
Robert Kerr says:
Would you rather have that, than use $14 billion of your money as a LOAN now to salvage most, if not all, of those three million jobs.
I’d prefer using it to save those jobs, but your premise is flawed. The loan wouldn’t save those jobs.
All it would do is keep the furnace going for 2-3 more months. Then they’re back in DC, this time *with* Ford, still needing another $4B/mo. ea.
Then what?
Why not ask yourself: “What’s a better use of $14B … using it to keep these dinosaurs alive for 3 more mos. or using it for retraining and unemployment benefits for the displaced workers?”
And I don’t believe 3M jobs, either. That got pulled right from Gettlefinger’s arse. 500K is more realtistic as the upper limit.
December 13, 2008 — 10:55 am
jay says:
My understanding from having looked into this a few weeks ago is that the 3,000,000 is grossly overstated by certain figures with skin in the game as it were such as a failed governor with bogus policies that have had an adverse impact on MI’s economy and unemployment rates. It’s like the schneider guy in the 80s going around claiming 2,000,000 homeless that the media repeated everywhere and people assumed it was fact–turned out to be more like 250,000.
There are car co.s thriving in the US and they tell the bigger picture of why the gov shouldn’t artificially delay the inevitable:
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/918gvijq.asp
750,000 autos being churned out annually in the South–perhaps that needs to be verified but it sounds impressive.
“The southern auto industry mocks Detroit. The transplants make money and aren’t asking for help from Washington. The recession has curtailed car sales temporarily, causing the transplants to slow production. But they are expected to expand again once the economy recovers. Volkswagen is currently building a plant outside of Chattanooga, which will produce 150,000 cars a year. But VW, with ambitious plans to increase its American sales, obtained an environmental permit that allows it to make 512,000 autos at the site. Volkswagen, by the way, has moved its main American office from Auburn Hills, Michigan, to Herndon, Virginia.”
“The southern auto belt from South Carolina to Texas, home to eight German, Japanese, or Korean plants (plus three more under construction), is right-to-work country. In these states, workers can’t be compelled to join a union or pay dues, and not many are inclined to sign a union card anyway. The result: The UAW has failed miserably to organize workers. No Mercedes, VW, Honda, Toyota, Hyundai (KIA’s parent), BMW, or Nissan plant in the South is unionized.”
“So far, these investments have paid off handsomely. Michael Randle points to the case of Alabama, which has delivered $1.2 billion in incentives to four automakers. The companies, in turn, have spent $20 billion in salaries alone to their employees. “If Warren Buffett took $1.2 billion and turned it into $20 billion in 10 years, he’d be called a genius.”
December 13, 2008 — 12:58 pm
David Shafer says:
Jay, nice work. The scare tactics are really only adding to the feeling that the big three are/have been lying to us. If the UAW was really concerned with jobs, then they would have pushed the deal on the table because everyone knows that to be competitive you can’t have labor costs of $10/hour more than your comptetition. As for upper level management, they should be fired, period, in bankruptcy. The government should stand behind the car warranty’s and that’s it other than an aggressive federal bankruptcy judge demanding a proper reorganization.
December 13, 2008 — 8:22 pm
Nathan Johnston says:
I agree, David. The management SHOULD be fired in bankruptcy. And it doesn’t look like the UAW was very concerned about keeping jobs, does it. Those sure aren’t minimum wage workers, are they?
December 13, 2008 — 10:39 pm