Tuesday :: Nov 22, 2005

Who Needs Enemies?

by pessimist

On his recent trip to Asia, the president put it almost as bluntly as his vice president did at home:

"As our troops fight a ruthless enemy determined to destroy our way of life, they deserve to know that their elected leaders who voted to send them into war continue to stand behind them."

Careful, Unka Dick! This falacy isn't playing well in Red State Oklahoma!

What I really want to know is this: Why are we expected by Bu$hCo to be looking at those 'determined to destroy our way of life' instead of those who actually ARE destroying our way of life?

I'm talking about America's corporate executives.

Let's look at one specific example to put this in perspective. Al Qaeda killed 2,986 on 9/11, 19 in the Dhahran attack, as many as 96 killed in the attack on foreign civilians in Riyadh, and 17 killed aboard. Just to be generous, we'll allow the 241 Marines killed by a suicide bomber in Lebanon in 1982 to be included.

The total number of Americans who lost their way of life when they were killed by terrorists is about 3400, allowing for some I'm sure I missed.

This week, Ford is costing 4000 Americans their way of life all by themselves.

Now add in those affected by the recent announcement that GM is planning to cut its workforce by 17% by laying off 30,000 workers.

34,000 versus 3400. Al Qaeda clearly loses as the big threat its made out to be by Bu$hCo.

Billionaire investor Wilbur Ross - one of those who is benefitting greatly by the troubles being unleashed by people like him upon the hapless automotive workers (among many others) - at least had the courtesy to notice that the American Way of Life is being affected:

"Historically, these jobs had been some of the premier industrial jobs in the country," he says. "I really do worry and hope some semblance of the American standard of living can be saved for these folks."

I assume that his concern includes all 89,016 of those laid off from their automotive manufacturing jobs this year! And let's not forget all those airline workers who entered the unemployment field!

Tell me again about how we are being protected by Bu$hCo from those who seek to destroy the American Way of Life!

In fact, Bu$hCo alumni are ear deep in the carnage:

Economy barely budging

On his first day in office, Gov. Mitch Daniels told every state employee he met that putting more money in Hoosiers' pockets was his first priority.
Ten months later, the income of Hoosiers, measured by the amount of individual income tax being collected, hasn't grown. And the headlines have been less about job gains than potential job losses, including at Kokomo auto parts manufacturer Delphi Corp.
Last week, the State Budget Agency released revenue figures that show individual income so far this fiscal year is below projections. In addition, the number of people employed in Indiana has remained essentially flat this year, though the picture is an improvement from four years ago.

Daniels has said he would offer an incentive package to keep the jobs in Indiana, even if they are at lower wages than now paid. Delphi workers currently earn $27 an hour or more. The company has proposed cutting base wages to $9.50 to $10.50 per hour for productions workers and $19 an hour for skilled trades workers. New production workers would start at $9 per hour.

Terry Thurman, head of the United Auto Workers Region 3, is livid.

"If I could give him a grade lower than 'F,' I would," Thurman said. "He goes to Kokomo and basically endorses $9 an hour," Thurman said. "You can't raise a family, you can't send your kids to college, you can't retire with dignity on $9 an hour."

But you can assist their employer, can't you, Daniels? You helped to promote tax breaks Thursday for a $176 million upgrade of a GM plant in Fort Wayne!

Even if a company is going into bankruptcy and might be dissolved to pay creditors, America's executives are showing their workers just how their CEOs share the pain. They get the banruptcy judge to allow them to exempt their compensation packages from forfiture - just like their counterparts in the airline industry have done: Northwest and Delta, for example, and they can also sell off their stock before the price falls!

It's little different on the ground. A commentator at this publication is asking the questions our ($)elected repre$entative$ should be asking:

* How can a team of lawyers from the UAW allow this to happen? * What was the Judge's justification to place more burden of long-term mismanagement on labor? * Are the 21 Delphi execs qualified for this severance pay and bonus the same managers that helped lead Delphi into its present disturbing financial situation? *[W]ouldn't Delphi be better off to have these "execs" immediately take jobs with Delphi's competitors?

They certainly might! It's clear that the crop of MBAs that emerged from American colleges since the 1970s aren't up to the task of managing:

"How do U.S. firms compete in the global economy?" asked UC Berkeley economist Harley Shaiken. "If the only way to compete is with $10 wages, we have a problem that is much larger than just Delphi. We're looking at a society where people exit rather than enter the middle class."

Investors can see the problem that GM execs refuse to admit - they aren't paying any attention to the conditions their customers are facing when they build cars they want to build and not those that are appropriate to the current troubled times:

GM has been struggling with a loss of profit and market share as consumers shy away from its gas-guzzling sport-utility vehicles. It lost 3.8 billion dollars in the first three quarter of 2005 and has seen sales drop by more than 20 percent in September and October.

"Toyota is getting ready to eat General Motors," said Jim Womack of the Thin Enterprise Institute.

How would he know? Americans don't like what GM (and Ford) are offering!

Of even larger concern is a growing negative perception of U.S-made cars. The auto lines released by both GM and Ford over the past several years have not been well-received by consumers. And heavy discounting throughout the summer and fall did not bring buyers back.

An Edmunds survey estimated that U.S. manufacturers offered nearly $2,800 worth of incentives for each car sold in October. During the same month, Japanese automakers offered about $950 in incentives. The result?

Japanese-made cars captured a 36 percent market share in October, an all-time record for the month. The market share for U.S. car sales fell to 52.3 percent, an all-time low.
"What that tells you is that people didn't care how much they're paying, they're not going to buy it. And that's not a good situation," said Jesse Toprak, executive director of industry analysis with the automotive Web site Edmunds.com.
Young, trend-setting markets on the East and West Coasts are buying more Japanese cars than ever before. More U.S. buyers believe foreign carmakers produce superior products. Regardless of whether it's true, the U.S. automakers must convince buyers that their cars are equal to or better than their foreign counterparts. "If you're not selling enough cars, you're not going to make enough money," Toprak said. "Cuts aren't going to maintain long-term, sustainable growth — only sales does that. It's all about the product."

Some GM workers think that the management is too edjimikatid like Owwer Leedur to be smart enough to understand this:

Warren Evans, a GM employee at the Oklahoma City plant since 1983, said he and many workers at the plant were skeptical of GM's decision to retool the plant several years ago. "When they put this new product in there, the SUV, I knew it wasn't going to work out," he said. "The market was already flooded with the SUVs.
"The engineers, to me, they're stuck on stupid. They never talk to us, the people on the line."

It might have saved GM a whole lot of trouble if they had, but instead they went for the power of command, as UAW representatives describe:

"Workers have no control over GM's capital investment, product development, design, marketing and advertising decisions. But, unfortunately, it is workers, their families and our communities that are being forced to suffer because of the failures of others," UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a joint statement.

Rather than deal with real business problems, America's executives deal in the trivial, as these Ford execs demonstrate:

Ford cracks down on rest room breaks

The length of bathroom breaks may seem minor, but Ford's attention to it reflects the intense pressure on U.S. automakers and parts suppliers to improve factory performance and cut costs amid fierce competition from more-efficient foreign rivals. Ford supervisors will begin collecting weekly data on the amount of time workers spend on bathroom breaks and "respond appropriately," the memo said.

Several workers are crying foul. They say the real issue is that sales of the Expedition and Navigator have been plummeting for much of the year as high gasoline prices prompt consumers to switch to more fuel-efficient models. Workers point out they have had 12 weeks of downtime due to slow sales this year, and more may be on the horizon.

"It's an excuse by upper management to gloss over some of the real problems we have out here," said Jody Caruana, a Michigan Truck hourly worker and a committee member for United Auto Workers Local 900, which represents workers at the plant. "This might be an issue in one zone or another. But is this causing a quality or productivity problem? No. If someone is not on the job, you can bet someone else is who knows what they are doing."
[A]t least one analyst said automakers are beginning to take cost-saving ideas too far.
Bathroom monitoring is just one of a number of "incredibly stupid ideas" being floated by automakers, said Sandy Munro, CEO of Munro & Associates, a manufacturing consulting firm in Troy. Munro said a number of suppliers have told him that Ford and General Motors Corp., which is also trying to battle back from deep losses, are beginning to explore small ways to save money.
"It's a giant throwback to the bad old days of the '70s and '80s, when you squeezed the guy at the bottom of the heap any way you could," Munro said. "That only causes lots of discontent, and only someone from Harvard could think of something as stupid as monitoring bathroom time."

As the automotive industry sheds high-wage workers, the effects are going to spread into their communities. In a report on the effects of airline pay cuts issued by the Economic Forecasting Center at the Robinson College of Business in Atlanta had this to say:

The $1 billion in concessions translates to approximately $625 million lost in consumer spending in the area, which could lead to a potential loss of 9,000 jobs. And these calculations do not include any future planned job or pay cuts. The same economics apply for the other legacy carriers and their employees all across the country.

It can be demonstrated that this also applies to the automotive industry:

GM cuts to hit US confidence

"Everyone understands the old adage that 'What's good for GM is good for the U.S. economy,' and if GM, the bellwether, is struggling, it very clearly affects confidence," said Michael Gregory, senior economist at BMO Nesbitt Burns. "From a manufacturing standpoint, it's going to have ripple effects into the parts industry as well -- adding to the headwind on the manufacturing side," he added.
"Job cuts will not end with these announcements," warned Chief Executive John Challenger. "Every town with a closing plant will see its local economy take a hit. Retailers, restaurants, real estate, home improvement stores ... will all see business decline."

Automotive slump threatens sector's middle class

The region hit the hardest, say economists, is the 450-mile radius around Detroit, where plants were built to be a day's drive from Motor City. Michigan alone has lost 71,000 of its auto-parts jobs since 2000, out of a total of 226,000, according to the Federal Reserve Bank of Chicago. Also hit hard are Ohio, Indiana, Illinois and the Canadian province of Ontario, just across the border.

Penny Austin .... recently learned that Lear plans to close her plant. Her Lear plant, located in Grand Rapids, a few miles from Coopersville, used to employ 3,000 people, notes Danny Rau who owns the nearby Danny's Beverage, a liquor store. He recently laid off two assistants. "We don't get all the guys in here at lunch buying lottery tickets and cigarettes anymore," says Mr. Rau.

GM Plant Closing Has Impact on Tenn. Town

At a nearby Waffle House restaurant, manager Tyriko Duckett says GM workers come in to fill up on hamburgers, steaks and pork chops before their shift begins. "I'm going to lose a lot of customers," Duckett said. "They're just like family."

Tower workers face pay, benefit cuts

Around 280 hourly employees at Tower recently were asked to take 6 percent wage cuts, increase their insurance costs and give up other benefits as part of a reorganization plan. "There's a lot of mad people," said Corine Tietz, a nine-year employee at the local Tower plant.

Labor analyst John Revitte said workers at auto-related companies and other manufacturers can expect similar pressures from employers, in the wake of widespread publicity over worker concessions at giant auto companies like General Motors and suppliers like Delphi Corp. "It's becoming very scary," said Revitte, a professor of labor relations at Michigan State University. "The relationships have really changed between the auto companies and their suppliers. They're becoming much more difficult - and much more cutthroat."

The companies are only passing along the costs of the investors 'protecting' themselves from the conditions they are imposing on those who made them millions in profits:

Investors nervous about GM's fate
Concerns are rising that automaker might file for bankruptcy within 6 to 12 months

Concerns about the automaker's future are showing up in the credit default swaps market, where investors effectively buy insurance protection against defaults. Holders of GM debt who want to arrange a hedge against the risk that they won't be repaid are finding that the cost of buying the protection has risen dramatically in recent days.

"The markets are telling you that more traders are starting to see a greater risk that a default scenario could happen sooner in time than later," said John Tierney, a credit strategist with Deutsche Bank Securities in New York. "You cannot deny there is a pattern here."

Credit default swaps for GM are trading at what is known as an "upfront" basis, meaning a bondholder seeking protection against a default has to pay more money up front because the Wall Street firms arranging the hedges have to pay more to protect themselves.

Michiko Whetten, a quantitative credit analyst at Nomura Securities International, said GM debt had never traded on an upfront basis. But now that it is, it puts GM in an unenviable category with Delphi Corp. and Delta Air Lines -- other companies whose debt traded on an upfront basis ahead of their petitioning for bankruptcy.

"Where is the government?", one asks. This is about the best they can come up with to ease the pain of displaced workers:

The 3,900 workers at GM's oldest plant in Janesville, Wis., were among the most surprised that their facility wasn't targeted. But spokeswoman Carolyn Markey said one reason may be the plant's launch of the next line of the largest sport utility vehicles early next year, funded in part by $10 million in state-provided money for worker training.

What a racket! It's so good, others have jumped onto that particular band wagon:

Auto students in demand
Dealerships work with new intern program

Getting more well-trained automotive technicians is becoming a priority for automotive dealerships and manufacturers who foresee potential shortages of qualified job candidates as older workers retire [or get laid off - ed.]. "Manufacturers, almost more than dealerships, see a shortage of technicians down the road," said Bill Norman, a district manger for American Honda.

Fort Collins car dealerships want to drive young, reliable "gear heads" into working at their service facilities, which are becoming increasingly more complicated. A new, two-year program at Front Range Community College will take cream-of-the-crop high school automotive students and place them in a two-year internship at a dealer's shop.

The program will take a high school senior and place him or her in an internship at which they will work with a mentor as the student is taking classes. The student will have to commit to the internship and at least one year of instruction at Front Range after graduating high school. The dealership helps buy the student a tool set but can hang onto the tools until the internship is finished.

- and -

Trenholm gets $3 million grant to train auto workers

Montgomery's H. Councill Trenholm State Technical College will get a $3 million U.S. Department of Labor grant to train workers to build automobiles, Labor Secretary Elaine Chao said Wednesday. The school will use the grant to create an automotive manufacturing technology center to train students in car robotic manufacturing and repair, college President Anthony Molina said.

Trenholm already offers an auto repair course in partnership with Hyundai Motor Manufacturing Alabama, which opened a $1 billion factory in Montgomery in May. Automobile jobs are in high demand in Alabama, but applicants must have the required skills to land them, said Phyllis Wesley, spokeswoman for Alabama Industrial Development Training, a state college agency that helps place workers. More than 20,000 applied for jobs at Hyundai, although the plant only had about 2,000 slots, she said.

This is how one observer sees this situation - little value in these programs for all the hype:


Remember the old-fashioned verbal fights, when one combatant yelled "You're driving me crazy!" and the other one yelled back "Well, it's a pretty short trip!" The whole country seems to have arrived, helter-skelter, at that "short trip" destination. Now comes growing belated realization of so many things.

Remember when corporations were so sure that their employees would turn out superior products that they cut corners by dropping much of the inspection process? How about all the recalls of thousands of models of cars due to defects? Wasn't that a jarring "short trip" to all the outsourcing of jobs in the auto industry and all its suppliers? Snoozed along the way, didn't we?

Welcome to the "short trip" destination. Please move quickly. Others are arriving on several tracks right behind you.

I'll bet that those arriving at Auschwitz heard similar exhortations.

But I digress.

GM wants you to feel so badly about their laying off of so many that you will scrap the old Datsun and rush right over to purchase that new Denali you can't afford. But don't think that will save anyone's job:

GM eyes S. Korea as Delphi strike looms

General Motors Corp., faced with the possibility of a strike at its top parts supplier, plans to more than triple purchases of South Korean parts. GM says it plans to raise from $600 million to $2 billion the amount of South Korean vehicle parts it buys, the Joongang Daily said. Such a trend has been underway all year. In the first 10 months of 2005, GM's purchase of South Korean parts rose 79.1 percent, contrasted to year-earlier levels.
- and -

Strike threat looms for Delphi as Indian firm eyes company

India-based Sona Group is interested in buying Delphi's steering systems operations, which employs about 2,100 locally. India's financial publication, Business Standard, reported that the Sona Group has initiated talks with Delphi to buy its steering systems operations. Delphi plans to sell $400 million to $500 million in non-core assets. The Sona Group has three plants in Gurgaon that operate under the Sona Koyo Steering name.

Losing jobs overseas becomes more of a concern to workers, including those at the Limestone County plant, as news about a foreign buyer emerges. "All we know is what news we've been able to read," said Terry Scruggs, president of the UAW Local 2195 at Tanner, whose members work at Delphi's Limestone County plant. "Everybody's been worried, even before this.

Everyone believes our jobs are going overseas, and we feel nobody in Congress cares."

Maybe not, dear auto workers. But rest assured that someone who understands your pain does care:

Mitsubishi comes to aid of needy

Workers at the Mitsubishi Motors North America plant in Normal [IL] dug deep into their pantries again this year, donating five truckloads of nonperishable food items to help the needy. "In the last year our members have been extremely generous," Ralph Timan, president of United Auto Workers Local 2488, said, adding they also filled vehicles and semis full of supplies for Gulf Coast hurricane victims. "Obviously we're worried about our brothers and sisters who are laid off, but the spirit of giving continues to shine through," he said.

For the past three years, Mitsubishi has joined other central Illinois companies in supporting the Clare House annual food drive. Clare House, at 703 E. Washington St. [Bloomington, IL], is a local food pantry and soup kitchen.

"When you see the lines at Clare House go around the block, you just know there's a need," said Tom Aranowski, sales representative for Extreme Motors.

Get used to the idea of standing in long, slow-moving lines. As the economy winds down for those who labor, we're going to be standing in a lot of them.

Have a Happy Thanksgiving anyway. It may be the last one of these we'll have for a while.

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