Archive for the ‘Automotive Industry’ Category

Lansing, Michigan Mayor: Automotive Union Members Have Sacrificed Enough

February 18, 2009

Yesterday on Happening Now on FOX News, Virg Bernero, the Mayor of Lansing Michigan, said that auto industry workers have already sacrificed enough and it’s time for Wall Street to start making some sacrifices.  Watch the video (courtesy of FOX News), and I’ll discuss it below:

Alright, honestly, the mayor went nuts in my opinion, and kinda made a fool out of himself.  He said, “I was a little offended by your question, you know, have the unions given up enough, has the working man given up enough?  You know, my question is, has Wall Street given up enough, for the billions that they have taken?”  Um, the anchor (who’s  name slips my mind at this point) never said ANYTHING about union concessions or anything related to it!

The anchor points out that that wasn’t his question (go back to the beginning and check – it was NOT his question).  When asked if he thought that the UAW should have to “swallow some pay cuts,” Bernero focused solely on health benefits, again NOT answering the question that was asked!

Bernero late shows exactly what the problem with Michigan is, when he asks the question, “What are we going to produce in this country, if we allow the auto industry to go by the wayside?”  For too long, Michigan has relied on the auto industry as “our industry.”  The fact is that the auto industry isn’t what it used to be, and we can no longer rely on it as our only industry.  And to ask what we will produce if we don’t produce automobiles, as if saying that’s all we produce, is insulting to those who work in other manufacturing fields.

The anchor also brings up the fact that UAW members don’t need health care for life!  That’s one of the reasons that the Big 3 are suffering, because they’re giving health care to people who don’t work for them anymore.  Bernero says that the UAW has given concessions.  True, they have, but they need to give up WAY more.  UAW members are WAY overpaid and get WAY too many benefits.

If UAW members would just realize that he auto industry is in trouble and can’t afford to pay them what they have been up until now, and would take some pay/benefit cuts, then the auto industry could rebound.  But while the UAW shares the mentality that Bernero has, the auto industry is going to continue to suffer.  I’ve said time and time again that while the auto executives share some of the blame, a lot of the blame falls on the greedy UAW for keeping the auto industry in such a choke hold.

Done Ranting,

Ranting Republican
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Live Analysis of Governor Granholm’s Michigan State of the State Address

February 3, 2009

The Michigan State of the State address is about to begin.  I will be live blogging the event, giving my analysis (so my apologies for any spelling errors – I’ll fix them eventually).

Alright, she’s entering the chamber (I’m not sure if this is the House or Senate – probably House since  it’s bigger).

Oh – my roommate (Democrat) just about made me die of laughter – he said, “Where is she?”  I said, “Right there.”  And he goes, “Oh, I thought that was a dude.”

Alright – she’s making her way up to the podium – about half the room is still clapping – probably the Democrats.  There’s Lt. Governor John Cherry up in his chair.

There’s Senate Majority Leader Mike Bishop (R) and Speaker of the House Andy Dillon (D).

She’s saying welcome and thank you.  She’s welcoming and congratulating the new representatives.

She’s now welcoming Supreme Court Justice Dianne Hathaway, elected this year.  And she’s congratulating the longest serving president of the State Board of Education.

Now thanking the servicemen and women from Michigan as well as the first responders.

We just gave a moment of silence for those who lost their lives defending this country and state overseas.

“I will not sugar-coat the crisis facing this state. … Our auto companies fought for their very existence, and as the bottom fell out of the national economy” Michigan “went from bad to worse.”  She’s absolutely right about that.  “Any honest assessment of our state’s economy must recognize that things are likely to get worse before they get better. … Things will get better … because Michigan citizens are resilient … because our battle plan is focused on the three things that matter most: fighting for more good paying jobs in Michigan, educating and training people to fill those good paying jobs, and protecting out people.”

“This is not time for pet projects or special interests.”

Now talking about Michigan now having “a friend in the White House who now shares our agenda.  I say this based on pragmatism, not upon partisanship.”  BULL CRAP!

She’s talking about him being focused on energy jobs, education, and protecting people.  COME ON Madame Governor, the Republicans are interested in all of those things too!

“We’ve made many tough choices in our budget.”  True, but you could have done a lot more to fix the state, but you didn’t, and that’s why we’re as bad as we are now.

“I have a veto pen, and I will use it. … The President’s economic plan is a one-time opportunity.”  Really?  Because so far, I count THREE bailout bills.  What’s to stop three more?

She’s saying that our problems will be here after the economic stimulus money is gone.  Lt. Governor Cherry will be in charge of downsizing government, reducing number of departments from 18 to 8.

Something about we can’t have “9-5 government in a 24/7 world.”  Good point there – I’ll give her that one.

Her and Cherry are reducing salaries of all elected state officials in Michigan by 10%.  That’s a good move – I COMMEND HER on that, but I don’t really see how she can directly do that.

“Already, I’ve cut more than any other Governor in Michigan.”

She’s saying that a national survey showed that MI has done more to cut spending than other state in the country.  I’d like to see the details of the survey, but if it’s all true, I commend her on that.

She’s cutting funding for the state fair – because it’s not essential to government.  GOOD CALL!

Talking about preserving our wetlands.

Talking about reducing corrections spending.  We’re going to close 3 more facilities in the coming months.  Reinvest in more law enforcement on the street.  More law enforcement is good, but I’m not too keen on closing 3 facilities – that means more criminals on the streets, since our prisons are already TOO FULL!

Funding for roads, bridges, and transit systems – um, we’ve needed that for the past FEW years!

We can focus on jobs when we spend within our means.

We need to diversify, but that doesn’t mean sacrificing our number one industry, the auto industry.  When pundits and ill-informed politicians take cheap shots at the auto industry and its workers, we (she’s saying this) will defend the auto industry.

Talking about the green auto industry being great.

Hundreds of thousands of jobs being lost since 2000.  “These losses have fueled our determination to bring new industry to Michigan.”  Good – we can’t JUST depend on the auto industry anymore.

Talking about film and TV project coming to Michigan after the tax breaks to film companies.

Three major announcements:

  • Wonderstruck Animation Studios – $86 million in Detroit.
  • Stardock Systems (digital gaming) – build in Plymouth
  • Motown Motion Pictures – $54 million in Pontiac (former GM plant)

Motown MP alone will create 3,600 jobs.  That’s great news – especially for the Pontiac area.

“But our success with the film industry is not an isolated example.”  Talking about renewable energy industry – solar panel production companies are building here in Michigan.

Just like the auto industry “it creates all kinds of jobs for all kinds of people.”  And that’s a good thing – I am VERY enthusiastic about renewable energy, as long as it’s not expensively forced on the people.

She’s talking about wind turbines (and wind power is something I have always been really excited about – that  and nuclear power).

Jobs for manufacturers and engineers – for solar panels and electric car batteries.

She’s getting really intense about this.  “The fact that these jobs are in Michigan is no accident.”

We bring them here by beating out other states and countries.

We passed incentives to make sure those batteries are made in Michigan.  Within weeks of passage, GM said that they’d make batteries for the Volt automobile will be made here in Michigan.  5 million electric car batteries to be made a year, creating 14,000 jobs.

She’s saying that we want electric cars researched and designed here as well as all kinds of renewable energy companies.

She set a goal for becoming more dependent on renewable energy.

  • 3 wind turbine manufactures to expand in Michigan.
  • Unisolar to build solar panel factory in Battle Creek.
  • HSC – $1 billion for solar panel expansion
  • Dow-Corning – more solar panels.
  • Great Lakes Turbine to build in Monroe (where my roommate’s from!)

“We all know that  we need more jobs – a lot more.”  I agree with you there.

President Obama has demanded more use of renewable energy.  This will increase jobs in Michigan.

“By 2020, Michigan will reduce our reliance on fossil fuels for generating electricity by 45%. … We’ll do it through increased renewable energy and gains in energy efficiency.”  Sounds like a good idea to me, but I think 45% is high.  I have no problem with it as long as it doesn’t jack up prices.  But if it makes energy unaffordable, don’t do it.

Instead of importing coal, we’ll spend energy money on Michigan wind turbines and solar panels and energy efficiency devices, all installed by Michigan workers.

Ask Legislatures to allow for Michigan homeowners to become entrepreneurs by installing solar panels on roofs and selling money back to power company.  Sounds good to me – it’s giving people the choice to do this, and enables people to eventually make that money back.

Asking utility companies to invest in energy efficient products.  Good.

Unlike the coal we buy right now, the money that we will spend on energy efficiency will create jobs in Michigan.

Create Michigan Energy Corps – creating jobs and turning natural resources into renewable fuels and weatherizing houses.

Saying that we’ll need less coal power  plants here in Michigan.

I’m kinda mad that she hasn’t said anything about more nuclear here in Michigan.

Talking about how she’ll bring new jobs to Michigan – that she’s gone all over the world to get jobs.  Yeah, well you haven’t been too successful so far.  You can go places to bring jobs here, but that doesn’t matter until you bring some here.

Saying she’ll require (I think it was universities) to buy Michigan.  I have a problem with that though, because she wants a tuition freeze in order for universities to get stimulus money.  How can they do that if you FORCE them to buy Michigan-made (more expensive at times).

Saying people should buy Michigan products.  Buy everything from Ford to Faygo.

Talking about the Michigan $4,000 putting college in the reach of all students.  Um, $4,000 really doesn’t do that much.

Michigan will be the first state to replicate the Kalamazoo promise on a large scale.  Something about free education, and I missed the rest.

#2 in the country for well qualified teachers in the classroom.  How are we #2 with the Detroit Public School system?

No Worker Left Behind: Talking about free college tuition – $5,000 per year for 2 years.  Training people for jobs, such as nurses, electricians, computer technicians.  52,000 people.  Helping us to remake Michigan.

Added more resources to the unemployment system – THAT’s what we need – to allow more people to rely on welfare!

Asking universities and colleges to freeze tuition for the next year.  The problem with that is, what if THEY can’t afford it?

Give people 90 days without the fear of foreclosure.  That’s absolutely insane.  If people buy a house that they can’t afford, then they should lose it.

Talking about asking auto insurance companies to freeze rates on auto insurance.  Sure, if they want to, but don’t make it mandatory.

She’s saying we’ll use every administrative tool to ensure that affordable rates are given to consumers.  That should be up to the companies, not the government.

Saying that we shouldn’t strip people of health coverage in order to reduce spending.  We shouldn’t HAVE state sponsored health care!  She’s saying we should protect those whom people of faith often call “the least of these.”  Well, people of faith need to step up and help the poor.  That’s their duty as good Christians (as it is my duty), NOT the governments.  When did Jesus ever say that the government should help the poor?  He didn’t!  He said his followers should – that’s why it makes me angry when people give that as a reason that Jesus would be a Democrat!

And wouldn’t “the least of these” refer to the unborn babies as well?  I don’t see you protecting them, Madame Governor!

“Is it harder to balance the state budget or the budget of a family who went from 2 paychecks to 1?”  Talking about the harships of family being much greater than the hardships of politicians as leaders.

She’s now giving an example of a guy on unemployment who used No Worker Left Behind to go to a university and now he’s working for Dow Corning.

Sorry – my news station just stopped covering it – ABC needed to go back to “regular scheduled programming.”

OK – I’m back.

Talking about hope and strength.  “We together will build a better Michigan.  God bless you all, and God bless the great state of Michigan.”

Tim Skubik is on now – saying that “Doom and Gloom” only got 2 paragraphs.  He’s right – I think she could’ve shown that things are bad more than she did instead of just saying, “This is what we WILL do,” since she’s been saying that for YEARS now.

She never really said exactly how much she wanted to cut out of the government.  I will commend her for some of her pro-energy efficient plans, but I think she may wind up driving up costs at a time that we can’t afford it.  Allowing people to sell back energy from solar panels is a GOOD thing, because it gives individuals the choice to do it, instead of  mandating it.

And now Mike Bishop’s response:

He’s saying that “we all want what’s best for our state.”

“Each one of us has felt the effects of this economy.”

Saying that the Governor wants to use federal funds to fix the state, but a quick infusion of money “will never be the antidote. … You can’t increase spending and debt and somehow hope to resolve a serious budget crisis.”  The Republicans will submit a plan in the next 45 days for instant stimulus – it incentives job providers instead of increasing spending.

The House must pass Senate Bill 1.  Get rid of the 22% business surcharge.

Talking about manufacturing complexes and other companies coming in due to tax cuts, proving that business tax cuts DO work.

The second part of the plan would bring property taxes in line with home values.  Third, a tax credit for purchases of new homes will be created.  This would spur the housing market.  And he’s absolutely right – that was one of the things my parents looked into was the huge jump in taxes we would’ve payed if we moved this past summer.

Review each item in the state budget and find savings – good!

We must “be certain that state resources are used efficiently.”  Absolutely!

Talking about opportunities coming with adversity – leaders need to rise up and “take the reins that will lead us back to prosperity. … Time for us to fix Michigan. … Thank you … God bless you, our families, and our great state of Michigan.”

Alright – I’m off to a meeting – I’ll spell check this and finish my analysis when I get back.

Done Reporting,

Ranting Republican
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The Porn Industry Wants a Bailout Now

January 8, 2009

Folks, this is why I opposed the bailouts.  I predicted this (not this EXACTLY – I don’t think ANYBODY predicted this exactly) – I predicted that after we began handing bailouts to financial institutions and auto makers, that everybody and his mother would ask for a bailout.  Well, yesterday, that pretty much happened: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis that they plan on requesting that Congress allocate $5 billion for a bailout … a bailout of, you guessed it … the adult entertainment industry.

In a joint request sent to Congress, Flynt and Francis said that they want $5 billion “Just to see us through hard times.  Congress seems willing to help shore up our nation’s most important businesses, we feel we deserve the same consideration.  In difficult economic times, Americans turn to entertainment for relief.  More and more, the kind of entertainment they turn to is adult entertainment. … We should be delivering [the request] by the end of today to our congressmen and [Secretary of the Treasury Henry] Paulson asking for this $5 billion dollar bailout.”

Owen Moogan, a spokesman for Flynt told reportes, “The take here is that everyone and their mother want to be bailed out from the banks to the big three [hey - he just stole my line!].  The porn industry has been hurt by the downturn like everyone else and they are going to ask for the $5 billion.  Is it the most serious thing in the world?  Is it going to make the lives of Americans better if it happens?  It is not for them to determine.”

According to Flynt, “People are too depressed to be sexually active.  This is very unhealthy as a nation.  Americans can do without cars and such but they cannot do without sex. … With all this economic misery and people losing all that money, sex is the farthest thing from their mind.  It’s time for congress to rejuvenate the sexual appetite of America.  The only way they can do this is by supporting the adult industry and doing it quickly.”

But Francis and Flynt admit that they really don’t even need a bailout.  While DVD sales/rentals have fallen by 22% in the past year, the number of people visiting adult websites has grown.

Francis told CNN, “The popularity of adult entertainment in America has grown steadily for the past half century.  Its emergence into the mainstream of popular culture suggests that the US government should actively support the adult industry’s survival and growth, just as it feels the need to support any other industry cherished by the American people.”

Folks, this is asinine.  I opposed bailouts of institutions that were legitimately in a position of going under.  I ESPECIALLY oppose the bailout of an industry that is 1) not failing and 2) COMPLETELY UNNECESSARY to the survival of the American economy.

If any Congressman does not throw away this request within about 30 seconds of reading it, I will have lost all respect for that Congressman (unless he decides to keep it to cheer himself/herself up because of the pure hilarity of the concept).

But I think we all owe Flynt and Francis a big thank you.  Thank you for showing Americans how STUPID these bailouts are!  Why shouldn’t the adult entertainment industry get a bailout if the auto industry did?  Are we now discriminating?  Instead of deciding who does and doesn’t deserve a bailout, Congress should simply STOP giving bailouts and give BACK the half-wasted tax dollars of the American people.

Done Ranting,

Ranting Republican
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President Bush Approves $17.4 Billion Auto Bailout

December 19, 2008

Alright, well this morning, President Bush held a press conference where he announced his plans to give  a $17.4 billion loan to GM and Chrysler.  Here’s a video of  that press conference (courtesy of FOX), and I have a transcript (again, courtesy of FOX) which I’ve done a “play-by-play” analysis of below:

STATEMENT BY THE PRESIDENT ON THE ADMINISTRATION’S PLAN TO ASSIST THE AUTOMAKERS

Roosevelt Room

9:01 A.M. EST

THE PRESIDENT: Good morning. For years, America’s automakers have faced serious challenges — burdensome costs, a shrinking share of the market, and declining profits. In recent months, the global financial crisis has made these challenges even more severe. Now some U.S. auto executives say that their companies are nearing collapse — and that the only way they can buy time to restructure is with help from the federal government.

This is a difficult situation that involves fundamental questions about the proper role of government. On the one hand, government has a responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

Well, personally, I think that the best way to safeguard the health and stability of our economy is to NOT give out loans to companies who were irresponsible!

Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay — and I would not favor intervening to prevent the automakers from going out of business.

How exactly would the bankruptcy be disorderly?  The whole point of  bankruptcy is to keep the process orderly.  And if President Bush means liquidation as in the entire company, then this press conference was just a scare tactic to get the American people behind the auto bailout.  The companies wouldn’t go under.

But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws — and provide federal loans to keep them operating while they try to restructure under the supervision of a bankruptcy court. But given the current state of the auto industry and the economy, Chapter 11 is unlikely to work for American automakers at this time.

American consumers understand why: If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available, and you question the value of your warranty. And with consumers hesitant to buy new cars from struggling automakers, it would be more difficult for auto companies to recover.

Then by this argument, Chapter 11 would NEVER work for an auto company, because people would be hesitant to buy.  And how do you remedy these fears?  You emphasize the fact that 3rd party institutions offer warranties, and you don’t HAVE to go to the dealer to get your car serviced.  There are lots of other shops that do just as good of a job, if not a BETTER job than the dealership.

Additionally, the financial crisis brought the auto companies to the brink of bankruptcy much faster than they could have anticipated — and they have not made the legal and financial preparations necessary to carry out an orderly bankruptcy proceeding that could lead to a successful restructuring.

Um … when they were losing money years ago and asked the UAW members to take a pay cut, but the union said no, so in order to avoid a strike, the companies gave in, the companies should have known that continuing to pay wages that you can’t afford would make you go into bankruptcy eventually.  Like I’ve said before, it’s the companies’ heads’ fault for not cutting wages of the workers as well as taking pay cuts themselves, and it’s the UAW members’ fault for being greedy and refusing to budge at all.

The convergence of these factors means there’s too great a risk that bankruptcy now would lead to a disorderly liquidation of American auto companies. My economic advisors believe that such a collapse would deal an unacceptably painful blow to hardworking Americans far beyond the auto industry. It would worsen a weak job market and exacerbate the financial crisis. It could send our suffering economy into a deeper and longer recession. And it would leave the next President to confront the demise of a major American industry in his first days of office.

Are these the same economic advisors who encouraged the Economic Stimulus Package and the first bailout bill?  Because if so, they suck, and I would have fired them a LONG time ago.

A more responsible option is to give the auto companies an incentive to restructure outside of bankruptcy — and a brief window in which to do it. And that is why my administration worked with Congress on a bill to provide automakers with loans to stave off bankruptcy while they develop plans for viability. This legislation earned bipartisan support from majorities in both houses of Congress.

If bipartisan you mean Democrats along with traitorous Republicans, then yes, I guess it was bipartisan.  HOWEVER, I commend the brave and honorable REAL Republicans who stood up against this bailout, and the other bailouts.  I especially commend Bob Corker (R-TN) for standing up against the UAW.  Of course, Ron Paul (R-TX) must be mentioned, since he’s hugely against this as well.  I commend all 28 Republicans who had the common sense to vote against this bill.

Unfortunately, despite extensive debate and agreement that we should prevent disorderly bankruptcies in the American auto industry, Congress was unable to get a bill to my desk before adjourning this year.

This means the only way to avoid a collapse of the U.S. auto industry is for the executive branch to step in. The American people want the auto companies to succeed, and so do I. So today, I’m announcing that the federal government will grant loans to auto companies under conditions similar to those Congress considered last week.

These loans will provide help in two ways. First, they will give automakers three months to put in place plans to restructure into viable companies — which we believe they are capable of doing. Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success — and gives consumers confidence that they can continue to buy American cars.

Because Congress failed to make funds available for these loans, the plan I’m announcing today will be drawn from the financial rescue package Congress approved earlier this fall. The terms of the loans will require auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry — management, labor unions, creditors, bondholders, dealers, and suppliers.

Well obviously they have to pay back the loans.  It’s not a loan if you keep the money!

In particular, automakers must meet conditions that experts agree are necessary for long-term viability — including putting their retirement plans on a sustainable footing, persuading bondholders to convert their debt into capital the companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States. If a company fails to come up with a viable plan by March 31st, it will be required to repay its federal loans.

OK, this is where this whole thing just confuses the crap out of me.  We give them the money, and they spend it.  If they don’t have a plan by March 31st, they have to give all the money back.  But does Bush really think that they’ll have all the money that we gave them?  If they do, then it’s OBVIOUS that they don’t NEED the loan, because they still have enough money!  If they can’t repay us back, how is it any different than a normal loan.  How are we going to force  them to pay us back?  The entire PREMISE around this bailout is just idiotic!

The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now — or the only option will be bankruptcy.

The actions I’m announcing today represent a step that we wish were not necessary. But given the situation, it is the most effective and responsible way to address this challenge facing our nation. By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time. And we will give American workers an opportunity to show the world once again they can meet challenges with ingenuity and determination, and bounce back from tough times, and emerge stronger than before.

Thank you.

END 9:08 A.M. EST

Well, I have now lost most all of the approval that I still had for the Bush administration.

There’s still a glimmer of hope: Once Treasury Secretary Paulson actually makes a formal request, the money will be released unless Congress rejects the request within 15 days.  I can only hope that Republicans oppose it and that enough Democrats, angry at the way Bush has handled the release of money, will oppose this awful plan.  Sadly, I don’t see that happening; however, I will hope and pray and continue advocating that we put a stop to all of this economic nonsense!

This bailout plan is NOT the solution.  Like I said, the entire premise of it is flawed: We’ll loan you money to spend, but if you don’t have a good plan, you have to give that money back.  Well, either the money is STILL in their bank accounts (meaning they didn’t NEED the money), or the money has already been SPENT (partially)!

We need some strong fiscal conservatives to show what the Republican party truly stands for.  We need more people like Neil Cavuto, Bob Corker, and Ron Paul.  I’m tired of the Republicans here in Michigan supporting the bailout because it will help our state.  It’s selfish and wrong.  I’m especially disappointed in Representative Pete Hoekstra, who has always been very outspoken about fiscal conservativism.  We need people who will fight for economic justice!  We need people who will fight for the American TAXPAYER!

Done Ranting,

Ranting Republican
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Another Perspective on the Auto Bailout

December 17, 2008

I came across a column by economist Thomas Sowell this morning entitled “Postponing Reality,” and I’d just like to discuss part of this column with you:

We are told that the collapse of the Big Three automakers in Detroit would have repercussions across the country, causing mass layoffs among firms that supply the automobile makers with parts, and shutting down automobile dealerships from coast to coast.

You should hear the news stations here in Detroit.  The news anchors night after night of covering House and Senate votes keep making comments like, “Some Senators just don’t understand how detrimental this will be to Detroit,” or “The Southern Senators don’t understand what’s happening here in Detroit” or “Talk to your friends in other states about contacting their representatives to explain how bad this would be for Michigan.”  And you can substitute the word Senators with Republicans for a lot of the news anchors, since the media here in Detroit tends to lean left (as does all of Wayne County).

A renowned economist of the past, J.A. Schumpeter, used to refer to progress under capitalism as “creative destruction”– the replacement of businesses that have outlived their usefulness with businesses that carry technological and organizational creativity forward, raising standards of living in the process.

It’s survival of the fittest, economic style.

Indeed, this is very much like what happened a hundred years ago, when that new technological wonder, the automobile, wreaked havoc on all the forms of transportation built up around horses.

For thousands of years, horses had been the way to go, whether in buggies or royal coaches, whether pulling trolleys in the cities or plows on the farms. People had bet their futures on something with a track record of reliable success going back many centuries.

Were all these people to be left high and dry? What about all the other people who supplied the things used with horses– oats, saddles, horse shoes and buggies? Wouldn’t they all go falling like dominoes when horses were replaced by cars?

Unfortunately for all the good people who had in good faith gone into all the various lines of work revolving around horses, there was no compassionate government to step in with a bailout or a stimulus package.

They had to face reality, right then and right there, without even a postponement.

He actually brings up a really good point here.  Industries go through cycles, and to stop these cycles with the use of  government funds is only going to harm us more in the long run.  Like I’ve said before, the main reason that Michiganders support this is because it helps Michigan.  If the technology industry were to suffer detrimental losses, I’d be willing to bet that you couldn’t find 30% of Michiganders who would be in favor of spending billions of tax dollars on helping Silicon Valley in California.

Who would have thought that those who displaced them would find themselves in a similar situation a hundred years later?

Actually the automobile industry is not nearly in as bad a situation now as the horse-based industries were then. There is no replacement for the automobile anywhere on the horizon. Nor has the public decided to do without cars indefinitely.

While Detroit’s Big Three are laying off thousands of workers, Toyota is hiring thousands of workers right here in America, where a substantial share of all our Toyotas are manufactured.

 But Toyota doesn’t have union workers.  Without unions, their workers make (on average) a measly $30/hour.  Wait a minute, that’s not measly.  In fact, that’s more than the average GM worker ($29.78/hour).  The difference comes in pensions and health care.   GM has to pay out an extra $39.22/hour (that includes pensions for retirees), while Toyota has to pay out an extra $18/hour (with far less retirees).  So, the average Toyota worker (assuming he worked 40 hours/week with 4 weeks of vacation), would make $57,600.  That’s not that bad folks.  You assume that his spouse works part time (20 hours/week at $10/hour), that’s another $9,600.  That’s a yearly total of $67,200, which is DEFINITELY enough to live off of (My family of 4 lived off of about $80,000/year until my mom got a job, but she did that more out of boredom than need for more cash inflow.  And we were decently well off.  We aren’t rich, but we’re definitely nowhere close to going broke.), even though they may get a little less when it comes to health care.

Will this save Detroit or Michigan? No.

Detroit and Michigan have followed classic liberal policies of treating businesses as prey, rather than as assets. They have helped kill the goose that lays the golden eggs. So have the unions. So have managements that have gone along to get along.

EXACTLY!  I was just talking about this the other day.  Every time one of the Big 3 is in financial trouble, they go to the UAW and ask them to take a pay cut.  The UAW, being filled with greedy Americans says no.  So instead of setting a good example and taking a 50-75% pay cut, the management simply sat there and said, “You need to take a pay cut, otherwise we may go bankrupt.  The UAW continues to say, “No.  And if you don’t give in, we’ll go on strike.”  So, the company heads wind up giving in.  If I were head of any of the Big 3 right now, I’d immediately decrease my pay to $0.  Then, I’d tell the unions, “Take a pay cut, or go on strike.”  If they didn’t take a pay cut, I’d let them go on strike and hire new workers.  If a court ruled that I’m not allowed to hire new workers, I’d let the strike continue.  Eventually, the workers will have to come back to work or the company will fail.  If the company fails, it was the union’s fault for not showing up to work.  But the UAW wouldn’t let the company completely fail, because then their workers would be out of a job.  The corporate heads need to 1) lead by example, and 2) have some guts and stand up to the UAW.

Toyota, Honda and other foreign automakers are not heading for Detroit, even though there are lots of experienced automobile workers there. They are avoiding the rust belts and the policies that have made those places rust belts.

A bailout of Detroit’s Big Three would be only the latest in the postponements of reality. As for automobile dealers, they can probably sell Toyotas just as easily as they sold Chevvies. And Toyotas will require just as many tires per car, as well as other parts from automobile parts suppliers.

So, there you have it.  This was one of the best analyses I’ve seen on the auto bailout, and I couldn’t agree more.

Who’s at fault, the UAW or the corporate heads?  Both.  The UAW needs to stop being greedy and be willing to take a pay cut.  The leaders of the Big 3 need to lead by example and take MASSIVE pay cuts and start standing up to the unions.

Done Ranting,

Ranting Republican
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The UAW Put the Auto Industry in the Position that It’s in Now

November 24, 2008

Today, I saw a TV interview that has confirmed what I’ve been saying for years (see the long paragraph in the middle).  The UAW has driven the auto industry down into a disastrous spiral.  Watch theses videos.  The first is an ad put out by the Employee Freedom Action Committee (EFAC), and the second is an interview with EFAC representative Rick Berman (done by Neil Cavuto):

Alright, so those videos discuss the Employee Free Choice Act (EFCA), a bill that would get rid of the secret ballot for unions (when workers vote to either unionize or not unionize) and would force workers to pay union dues even if they don’t want to.

There are Democrats in Congress who are supporting this, but the interesting thing is, they recently voted to keep Senator Joe Lieberman (I-CT) in their caucus, by … you guessed it … a secret ballot.

Now, in that second video, you saw the insanely huge contract that the UAW has forced the Big 3 auto companies into.  Yes, I said forced.  As I’ve explained before, the UAW has bullied the Big 3 into signing those insane contracts.  Because if the auto companies don’t sign, the union will go on strike, and the company will suffer and lose money.  Unfortunately, the companies give in, because their executives don’t want their companies to fail.  If I were the auto executives, I’d say, “Go on strike,” and when the company didn’t have enough money to stay open, I’d fire those union workers.  Then see if the UAW is so stubborn.  I guarantee they wouldn’t be.

There was a time and place for unions, but, for the most part, that time and place is all gone now.

Stand up AGAINST the EFCA and stand WITH the EFAC.  Fight the union bosses.  Fight for workers RIGHTS (the RIGHT to a secret ballot, which Americans hold so dear).

End this union bullying of the Big 3.

For more information about the EFAC, check out their website, Employee Freedom.org.

Done Ranting,

Ranting Republican
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South Carolina Governor Mark Sanford: “Don’t Bail Out My State”

November 22, 2008

mark-sanfordThe following in South Carolina Governor Mark Sanford’s (R) editorial that was posted in the Wall Street Journal, with my thoughts and analysis spread throughout:

I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.

You’re better than my governor, Governor Jennifer Granholm, one of the people leading the charge for the auto bailout right now.

But I suspect I’m not entirely alone, as there are a lot of taxpayers who aren’t pleased with Christmas coming early for politicians. And I hope these taxpayers make their voices heard before Democrats load up the next bailout train for states with budget deficits.

Several questions led me to oppose bailing out the states. They are worth asking, even if you supported bailing out Wall Street.

Who bails out the “bail-outor”?

Washington is short on cash these days and will borrow every dime of the $150 billion to $300 billion for the “stimulus” bill now being worked on. Federal appetites may know no bounds. But the federal government’s ability to borrow is not limitless. Already, our nation’s unfunded liabilities total $52 trillion — about $450,000 per household. There’s something very strange about issuing debt to solve a problem caused by too much debt.

A very good question.  The answer, in my opinion, is eventually the taxpayers.  If we keep this set of bailouts going, we’ll ultimately just crumble the economy and economic infrastructure.  Heck, there may not even be a United States to bail out any more if we keep this up.  We’re entering dangerous territory economically, and if we aren’t careful, it may cost us permanently.

Do you now have to be a financial “bad boy” to win?

Community bankers tell me that they are now at a competitive disadvantage for being careful about who to lend to, because others that were less disciplined will get a federal bailout. This is also true for states. Those that have been fiscally responsible will pay for or lose out to the big spenders. California increased spending 95% over the past 10 years (federal spending went up 71% over the same period). To bail out California now seems unfair to fiscally prudent states.

But this has been the whole mindset since the beginning.  “I’ll take the risk, and if I suffer, they’ll HAVE to bail me out.”  I’ve been warning about this from the beginning!  But economically/fiscally dumb and irresponsible lawmakers in Washington have given in and now think, “If __________ fails, the whole economy will suffer, and we can’t let the economy suffer.”  Let companies go bankrupt.  Let people lose their homes.  It’s called a free market.  Companies and people never should’ve bought more than they could afford or taken risks that they couldn’t handle.

Was the economist Herb Stein wrong when he said that if something cannot go on forever, it won’t?

Medicaid grew 9.5% annually over the past 10 years. That’s unsustainable. But if Congress opens the checkbook now, there will be no reform.

Isn’t government intervention supposed to be the last resort and come only when it can make a difference?

EXACTLY!  And even then, in my opinion, the government probably shouldn’t intervene.  But it’s visible in the proposed auto bailout: Some in Congress are saying that the auto companies shouldn’t try bankruptcy first (even Represesntative Joe Knollenberg [R-MI9] said this!).

In 2008 bailouts became the first resort. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate “stimulus” checks of last February) to “improve” the economy. I don’t see how another $150 billion now will make a difference in a global slowdown. We’ve already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.

That’s a really good analogy.

However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security’s REAL ID requirements will cost $8.9 million.

Based on what I saw in Washington, the bailout train is being loaded up. Taxpayers will have to speak up now to change its freight, tab or departure.

I feel that it may already be too late.  While Congress won’t give in to everybody who asks for a bailout, I think they’re going to give in to a lot of them, and who knows how detrimentally that will affect our economy.

Mr. Sanford, a Republican, is the governor of South Carolina.

So, there you have it.  Governor Sanford’s op/ed.  I couldn’t agree more with what the Governor said.  We need more people like him (although I don’t agree with all of his stances, I think he’s absolutely right when it comes to this issue).

If we continue these reckless bailouts, we’re all going to suffer.  And we may not be able to recover.

Done Ranting,

Ranting Republican
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Representative Sherman to Auto Executives: Raise Your Hand if You Flew Here Commercially. No Hands Went Up

November 20, 2008

The following is a video courtesy of C-SPAN, from today’s House Financial Services Committee:

 

more about “Automotive Industry Assistance, Auto …“, posted with vodpod

Now, I’ve never been a huge fan of Representative Brad Sherman (D-CA24), but he’s absolutely right here.  If the automakers’ executives are going to fly to D.C. on a PRIVATE jet, they shouldn’t be lecturing Congress that they need more money.

Heck, I’ve been working on getting a big-name former Congressman (whose name I don’t want to give out) to come speak on my campus, and his booking agent told me, “I don’t know if Southwest Flies near you but they have great prices these days.”  If a big name Congressman can fly Southwest, then Rick Wagoner (GM), Alan Mulally (Ford), and Robert Nardelli (Chrysler) can.

Until these CEOs learn to fly Southwest or Airtran or something, they don’t deserve anything close to a bailout.  Additionally, the Union heads (and even workers) need to learn to take a pay cut.  I’ve said before that UAW workers are so overpaid, it’s just ridiculous.

Don’t bail out the auto industry, and especially don’t do it by giving into arrogance like this.

Done Ranting,

Ranting Republican
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Michigan Congressman Joe Knollenberg Supports Auto Industry Bailout

November 19, 2008

So, I was watching the news last night, and they had Representative Joe Knollenberg (R-MI9) on Neil Cavuto’s show discussing the bailout of the auto industry.  Watch this and I’ll discuss it below:

He talks about bankruptcy not working, because Delphi has been in bankruptcy for years, and then says that if a company goes into bankruptcy, people won’t buy cars from them.  Well, why would somebody STOP buying cars just because the company is in bankruptcy?  That makes absolutely no sense.  People would still buy cars.  People still bought tickets on Northwest Airlines when they were in bankruptcy.

And then here’s the biggest line I heard:

Cavuto: Where do you draw the line with our money?

Knollenberg: It is not your money.

Cavuto: It is!  It is taxpayers money.

Knollenberg: You’ve said you wanted me on this show.  Let me have a little chance to talk.

Then Knollenberg goes on to say that people won’t buy cars because of the credit crisis, and Cavuto brings up the fact that giving $25 billion to the auto industry won’t help end that credit crisis.  In fact, it won’t touch it at all.  Knollenberg said it’s basically just a means of keeping the companies afloat until they can start selling more cars.

I have to say that I was deeply disappointed by Representative Knollenberg here.  I was also disappointed that he voted for the original bailout.

The fact that he said that this is not taxpayers’ money was just appalling.

I like Rep. Knollenberg, but he definitely went down a notch in my mind when I saw this interview.

Done Ranting,

Ranting Republican
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A Michigander’s Perspective: The Goverment Should Not Bail Out the Auto Industry

November 13, 2008

As rumors fly that a $25 billion bailout of the auto industry may actually come to a vote in the Congress, I figured that I, a citizen of Metro Detroit and Michigan should weigh in.

First, the facts:

Speaker of the House Nancy Pelosi (D-CA) has called for “emergency and limited financial assistance” for General Motors, Ford, and Chrysler where legislation would be passed that would make the automakers eligible for financial support under the $700 billion bailout bill that was passed in October.

This comes after a $25-billion loan program bill specifically for automakers that was passed in September.  The problem with that program was intended to loan money to the Big 3 only to help refit plants across the country in order to assist automakers in making tougher fuel economy standards.  Now the automakers are saying that they need loans just to keep overall operations continuing.

Republicans in Congress are expected to push for the restrictions on the $25 billion to be dropped, before any other optionss are considered.  Senate Minority Leader Mitch McConnell (R-KY) has already started advocating for this plan; however, it is expected that Democrats will oppose dropping any of the restrictions on the $25 billion.

Now, what is my opinion?

Well, I have a lot to gain if the auto industry bounces back.  I have 2,500 shares of Delphi, an auto parts supplier for General Motors.  If it goes back up to $10 a share, I’ll have made a little under around $24,650 on my investment.

Plus, it’ll bring jobs back to Michigan if the automakers do bounce back.  And that’ll help the economy of my state, which is in a pretty sad condition right now.

But, I still oppose the bailout.

First, I’m tired of Michiganders saying, “I support the bailout because it’ll bring jobs back to Michigan.”  Well, my fellow Michiganders, when it’s YOUR tax dollars being spent outside of the state, would you support a bailout?

If the technology sector all of a sudden began failing, would you support a bailout of Silicon Valley companies such as Google, Adobe, Atari, Microsoft, Sony, Cisco, Hewlett-Packard, Intel, etc…?  I wouldn’t!  And as Governor Granholm is advocating for this bailout, mayors of major cities all over the nation are asking for their piece of the bailout?  And did I not predict that as we bail out more companies, more people would ask for their piece of the bailout pie?

This attitude is the same attitude as many people have with earmarks.  Ask most voters and they’ll tell you that they oppose earmarks, but then they’ll go and vote for the Representative “who brought so much money back to the district” through earmarks.  Examples of this are my representative, Carolyn Kilpatrick (D-MI13), who brags about the earmarked money she’s brought to the Detroit area, and more famously, Representative John Murtha (D-PA12) and Senator Ted Stevens (R-AK).

Second, the fact that the United Auto Worker’s Union (UAW) is backing this bailout scares me.  A LARGE PORTION OF THIS PROBLEM IS THE UAW’s FAULT!  The UAW bullied GM, Delphi, and Chrysler into giving workers benefits and wages that the companies couldn’t afford.  How?  By threatening to strike when the companies were suffering.  (I don’t remember the UAW ever threatening Ford with a strike in recent years, but I could be wrong).  Let me give the UAW a little lesson in business management: When your company is losing money, the LAST thing you want to do is cost your company more money by not showing up to work and going on strike.  If the government is going to step in and do anything about the auto industry crisis, it should be to reduce the choke-hold that the UAW has had on auto companies.  Instead of complaining about getting your benefits or wages cut, be thankful that you have JOBS.  Because when you go on strike, that means products aren’t being made, which means that less products will be sold, which means that less money comes in to the company, which means that either A) you lose your job or B) you lose wages/benefits.  Striking during a time of CRISIS only furthers the problem, and the fact that the UAW leadership (and at least 51% of the membership) refuses to acknowledge this (or are just too stupid to realize it), really angers me.  Obviously you can’t see me right now, but I’m actually getting angry just talking about the sheer stupidity of the UAW (and a lot of unions, such as the unions that struck during Northwest Airline’s financial problems and eventual bankruptcy).

And that leads me to my next point: Bankruptcy court.  We have them for a reason folks.  Let the automakers use them.  We shouldn’t be looking at bailouts at all until the companies file for Chapter 11 (and even after that, I will still be opposed to bailouts).

Lastly: I don’t think that the bailouts will work with the auto industry.  Some have cited (as they did for the bailout bill passed in October) that the government successfully bailed out Chrysler in the 1970s by guaranteeing a $1.5 billion loan.  The problem with equating the 2 situations is that in the 1970s, we weren’t establishing a pattern of bailing out company after company who came to the government looking for help.  In addition, that was a bailout of one company, not the auto industry.  Honestly, if one of the Big 3 fail, that will probably be enough to give the other 2 enough business to recover.  It’s not ideal, or anywhere CLOSE to ideal (heck, I have friends and family members who work in all 3 companies), but it’s better than this general industry bailout plan.  I think that an industry bailout will help the Big 3 for a while, but that won’t be enough for them to recover, so 1 or 2 of them may fail (I honestly think GM would be the first to go, and I don’t see Ford going under).

It’s not a good situation, but a bailout will only make it worse.  Michiganders and Detroiters need to stop being selfish and start thinking about the good of the country as a whole.

Done Ranting,

Ranting Republican
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