Saturday :: Dec 31, 2005

Trains, Planes, Automobiles - And Autocrat Deals


by pessimist

At least Mussolini could keep the trains running on time! Thanks to Bu$hCo neglect, About 800 Amtrak passengers were stranded on three northbound trains for nearly 29 hours after a freight train derailed in Georgia:

Passengers weren't offered hotels because CSX originally said it would have its freight train off the tracks sooner that it did.

Another 'Mission Accomplished' moment! Nothing like Amtrak being derailed to make your day, is there Yore Hindni$$?

[T]he Bush administration, never stingy with favors and subsidies to private corporate interests, can't bear the fact that Amtrak, the only national rail system we have, receives more than $1 billion a year in subsidies for capital and operations. Last winter Bush recommended zero-budgeting for Amtrak. Then, last month, he had his hand-picked board fire David Gunn, Amtrak's highly respected president. The good news: Congress isn't listening to the administration. It has voted $1.3 billion for Amtrak operations in fiscal 2006, the administration's zero-funding request notwithstanding. The Senate voted 93-6 for legislation authorizing $11.4 billion, over six years, for major infrastructure repairs and rail corridor improvement.

And 800 Amtrak passengers would have made it home on time!

It isn't just the railroads that are having problems - the flying skies aren't so friendly either! Delta says it lost $182 million in November, prompting Delta pilots to agree to approve a 14% pay cut - the second such cut in 13 months - and which has the added effect of having them working for about 50% of what they did two years ago.

But wait!! That's not all!!!

Their pension fund - along with their labor agreement - just might get terminated as well, so their future isn't so high-flying anymore.

Hope they are happy if they voted for Bu$hCo!

Over at Northwest Airlines, the machinists and custodial workers voted to remain on strike, knowing that they had nothing to lose:

Northwest has replaced its union mechanics and, as it had planned before the strike, outsourced much of its aircraft-cleaning work. "The way I look at it, there's nothing to go back to," said Brown, 46, a Northwest mechanic for 15 years.

Hope they are happy if they voted for Bu$hCo!

Over at United, the creditors accepted the reoganization deal, prompting one newspaper to ask:

If companies are protected from losing money, why aren't the workers? Workers' retirement funds have become a bargaining tool to cede for company security. Judges are supporting these reductions as a means of assuring companies' financial security.

What is going on here?

Congress and the White House must forge a solution to ensure that companies stop under-funding their workers' pensions. If nothing is done, retirement solvency will be a thing of the past, and the dream of a Florida retirement could fade from reality.

Maybe it already is for too many workers, and will soon be for the rest.

The scope of the retirement crisis is numbing: Out of 142.6 million active American workers, 101 million have a private pension plan. It is the lifeblood for most Americans supplementing the near poverty of pure Social Security.

I can attest from personal experience. When asking for a minor increase in our pension contribution (since converted into a poor excuse for a 401k!), we were told by management negotiators 'it is our opinion that Social Security will be more than adequate for the rest of your retirement needs'.

We know where Social Security is going - FAST!

I hope my co-unionists are happy that they were more likely to have voted for Republicans than not!

Instead, as is going on all over, outsourcing of unionized jobs is going to continue. It isn't going to matter if one of these 'contract workers' almost causes a plane to crash! He's only facing suspension and also won't face criminal charges. Can the same be said if this worker were unionized? I doubt it!

In another transportation arena, auto workers are being hammered by reduced wages and benefits, to which the auto makers reply, "So what? We can be more profitable overseas where governments pick up much of the cost of workers' healthcare and retirement costs. Want a good job? Move with us to Thailand! Guys with your skills are in high demand!"

For now. What of the time when (not if!) Chinese manufacturers run everyone else out of business because - with so many no-to-low-wage workers being created in the world - even low-priced models like Kia will be too costly to build in the US?

It might look like this:

Delphi Chief Executive Robert S. "Steve" Miller, citing global competition and crippling "legacy costs," ushered the $28.6 billion-a-year company into one of the largest industrial bankruptcies in U.S. history. In short order, Miller called for slashing workers' compensation by almost two-thirds, threatened to void the company's union contracts, and hinted broadly that he would follow the playbook he had used elsewhere of pushing responsibility for paying the firm's pensions to the federal government and dumping its retiree health benefits altogether.

Lowell Seibert went to work for the Packard Electric division of auto parts giant Delphi Corp. He was offered $19 an hour (now $30), good benefits and, perhaps most important, the promise of a solid pension and old-age health insurance.

For Seibert, 56, the spillover was immediate. That's because in addition to his pension, he had been socking away money in a company-administered savings account similar to a 401(k). Unfortunately, he had directed almost all of its $84,000 balance into Delphi stock. When the company declared bankruptcy, its shares plunged from a 12-month high of $9 to 33 cents, all but wiping out his account.

The result: "I'm not going to be retiring anytime soon."

Yes, muck, we know he didn't follow even the most basic portfolio diversification advice, so let's not waste space on that part of this post.

Before the trouble is over, some believe, a corporate icon such as Ford Motor Co. or GM could be swept from the American landscape. So too could much of what remains of the already frayed relationship between millions of working people and their employers.

Delphi is at the cutting edge of a crisis that's engulfing the U.S. auto industry, much as it did steel and airlines. Its actions are adding to a gathering trend, a shift of economic risks once largely borne by business and government to the backs of working families.

What is often forgotten is that these pension and benefits packages were offered to union workers in lieu of higher wages! Thus, management took on the burden of health care and retirement - and labor allowed it by agreeing - because both sides had confidence that management knew something about what it was doing. For many years, it did, but that time seems to have passed, as this article posits:


The Death of American Manufacturing

For over a half century, American manufacturing has dominated the globe. It turned the tide in World War ii and hastened the defeat of Nazi Germany; it subsequently helped rebuild Europe and Japan; it enabled the United States to outlast the Soviet empire in the Cold War.
At the same time, it met all the material needs of the American people.
On the back of this industrial output rose America’s middle class. American manufacturing became synonymous with quality and ingenuity. High-paying manufacturing jobs, in turn, helped spur a robust and growing economy that depended little on foreign nations for manufactured goods and armaments.

Considering the stupendous list of America’s manufacturing achievements and the vulnerabilities associated with foreign dependence when a nation lacks strong domestic manufacturing, it is alarming when economists are warning that the U.S. is facing the “gutting, hollowing out and closing down of American manufacturing forever” (Benson’s Economic & Market Trends, Feb. 27, 2004). [M]anufacturing as a share of the economy has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent.

The loss of the manufacturing industry manifests itself most clearly in job losses. According to The Economist, “fewer than 10 percent of American workers are now employed in manufacturing” (Oct. 1, 2005).

Most recently, these job losses and the hollowing out of American manufacturing have been evidenced in the auto industry.
However, the auto industry is just one example of the overall decline in American industrial might over the past couple of decades. Other U.S. manufacturing giants are failing, too; in fact, the U.S. has lost 3 million manufacturing jobs just since 1998.

Mostly on King George's watch, I might add!

Manufacturing loss is occurring because of globalization and outsourcing. Admirers of globalization contend that freer access to foreign markets and cheap labor increase corporate profits and thereby benefit the U.S. economy. While this argument may superficially sound compelling, it ignores the dangerous long-term effects of manufacturing losses.
In reality, outsourcing makes Americans poorer over time, because America’s wealth and technology slowly migrate to other nations.
America’s wealth grew when profits from domestic manufacturing were reinvested into buildings, machinery and technological change. But now outsourcing is diverting that income to foreigners.

Laid-off manufacturing laborers are largely switching into lower-paying jobs in the service industry. Where they once made an average of $51,000 annually, they now make $16,000 in leisure and hospitality, $33,000 in health care, or $39,000 in construction (Seattle Times, no date given in original article). In 2004, average employee compensation in the U.S. fell for the first time in 14 years.

It’s not hard to see why, in order to reduce costs, manufacturing businesses have been abandoning America in droves and fleeing to Asia. [T]he Chinese will work seven days a week for $0.50 to $1 an hour (US) with no benefits for social security, health care, vacations, a pension or worker safety.

What does the decline in manufacturing mean for the average American?

First, America as a whole will eventually become poorer, so be prepared to downgrade your standard of living.

This is already happening, as housing sales are down for the second consecutive month and new vehicle sales are down sharply.

This next piece of expert advice I direct to our Wrong-Wing Wregulars:

Second, if you are not among the rich and you rely on a job, prepare yourself for job security issues.

There used to be a derogatory saying that "nothing sucks like an Electrolux!" That product slur picks up new impetus as Layoffs at Electrolux leave more than 1,650 jobless.

In fact, all of these stories in this post tie together. In the past, well-paid workers could buy cars and houses on what they made, and still have enought o pay for rail and air trips as vacations. That isn't happening anymore, as employers can't run to the egre$$ fast enough. They are ignoring the most fundamental economic advice this expert quoted in the article can offer:

By building factories overseas, manufacturers are sowing the seeds of their own long-term destruction by slowly reducing the wealth of Americans—their primary customers.

Try to tell me that manufacturers even care about this!

Only now are those union workers who abandoned their party due to the successful application of Richard Nixon's Southern Strategy beginning to notice that they screwed themselves:


American workers need to stand together

I remember when I was a little boy, "My America" was the safest, happiest and most fun place in the world. My biggest problem in those days was coming home from playing football in the yard with a brush burn on my knee and a rip in my shirt.

That was then. Things have changed drastically in "My America" in recent years. I grew up and saw what reality was like, and I don't like it.

How can companies with labor contracts, like Delphi, file for bankruptcy and endanger the welfare of American workers all over this country while the government watches and does nothing?

This is where "Their America" gets ugly. "They" are Big Business and a Republican-run White House. They don't care about the working men and women of this country. All they care about is profit, profit and more profit.

This is a crucial time for the working men and women of this country. We need to stand together now, more than ever in this country's history, to protect what is ours.

Our great-grandfathers came to this country with a dream. Their dream was to be able to take care of their families and make a moderate living for themselves. They accomplished this dream. Our great-grandfathers earned these jobs and I'll be damned if I'm going to let them go overseas so Big Business can fatten its pocketbook.

The government is not going to help us. It is up to us, all of us, to help ourselves. I will do anything in my power to get "My America" back.

I am afraid it is almost 26 years too late for that, my sadder-but-wiser friend! Your job is gone with the wind, and your lifestyle is about to die with no style. The best you can fight for is the right to rebuild your nation in the image your grandfathers once held - one of fairness and a chance for everyone.

With Diebold and ES&S controlling our voting, and with the corporatocratic media plying softly-educated minds with public-relations palaver instead of thought-provoking news, you have a hard row to hoe ahead of you.

They aren't going to care until they have lost it all.


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