All about ideas…

Posts Tagged ‘auto workers

No Principles

with 2 comments

2012 Presidential Candidates Romney and Obama

When I first read this story in The New Republic, I was shocked and disgusted. Now, I’m disgusted and appalled.

As you may have heard, Romney on Thursday scared the bejeezus out of Ohio autoworkers when, during a rally, he cited a story claiming that Chrysler was moving Jeep production to China. Thousands of people work at a sprawling Jeep complex in Toledo and a nearby machining plant. Many thousands more work for suppliers or have jobs otherwise dependent on the Jeep factories. It’s fair to say that they owe their jobs to President Obama, who in 2009 rescued Chrysler and General Motors from likely liquidation. If Chrysler moved the plants overseas, most of those people would be out of work.

The story turns out to be wrong. As Chrysler made clear the very next day, in a tartly worded blog post on the company website, officials have discussed opening plants in China in order to meet rising demand for vehicles there. They have no plans to downsize or shutter plants in the U.S. On the contrary, Fiat, the Italian company that acquired Chrysler during the rescue, just spent $1.7 billion to expand Jeep production in the U.S. That includes $500 million to renovate and expand the Toledo facilities, with 1,000 new factory jobs likely to follow. On Monday, about the same number of people will report for their first day of work in Detroit, when Chrysler adds a third shift to a Jeep plant it operates there.

The campaign does not appear to have announced the ad. The Obama campaign captured video of it, during a broadcast in the Toledo area. Here’s how it ends:

    Obama took GM and Chrysler into bankruptcy, and sold Chrysler to Italians who are going to build jeeps in China. Mitt Romney will fight for every American job.

Although the statements about Chrysler are true individually, together they imply that the Obama Administration’s action led to the outsourcing of American jobs. That is obviously false, both in the specific sense of what Chrysler is doing and in the more general sense of what the entire auto industry is doing. Just look at the numbers (or the graph below). According to the Bureau of Labor of Statistics, the number of autoworkers fell almost in half between 2002 and 2009, from around 1.1 million to around 600,000, as the industry was in something like a death spiral. Then, as Chrysler and GM were on the brink of true collapse, the Obama Administration stepped in with federal loans and a managed bankruptcy. Almost immediately, the automobile manufacturing sector started growing again. Since July, 2009, the workforce has risen by about 150,000 jobs and that’s purely in manufacturing. If you include parts manufacturing and other related jobs, it’s 250,000.

Auto Employment

And that’s the net increase. By providing Chrysler and GM with the financing they needed to avoid liquidation, the Obama Administration prevented those companies from putting more people out of work. Overall, according to estimates by the Center for Automotive Research, the rescue probably saved at least a million jobs.

Of course, this kind of deception is emblematic of the campaign Romney and his supporters have waged in the last few days. They insist that Romney never thought government should let Chrysler and GM collapse. But Romney’s vague and inconsistent rhetoric included statements that he would have opted for a “private sector bailout”—something that was not possible in 2009, because private investors were in no position to make the necessary loans.* As Detroit Free Press columnist Tom Walsh wrote on Friday,

    Throughout the primary campaign, [Romney] joined other Republican candidates in a chorus of bailout-bashing and union-bashing when the auto bailouts came up, painting the Obama administration’s crisis-management effort as a reckless campaign to run up the national debt and do favors for labor unions.

Romney and the Republicans were wrong then and they are still wrong. But Romney has gone beyond normal political bounds.

Politics is often a dirty, nasty business, and politicians do lie and mislead. However, Team Romney chose to go well beyond the bounds of normal decency with this blatant attempt to scare workers with closure of their plant – and loss of their jobs – when no such plans exist in order to win votes.

With this ad and similarly misleading talking points, Romney has exposed his complete lack of principles and ethics. He has stepped well over the boundary of decency and proven that he will say and do anything to achieve his desired goal of becoming president.

The final question remaining is if Romney is elected president how many other unprincipled lies and deceits will he conjure to achieve his own ends. Where is his conscience and what are his ethics?

I’ve been watching politics, in particular presidential politics, since the Nixon-Kennedy debates, and I have never seen a more deceitful, unprincipled campaign as Romney’s. Even Nixon’s paranoia and criminal campaign did not disgust this much.

Team Romney’s unprincipled attempt to scare workers with the loss of their jobs for purely self-interested reasons should be enough to disqualify Romney. There is no excuse – none whatsoever – for deceptively scaring workers with the loss of their jobs. It’s sleezy, disgusting, and reprehensible.

Additional Note: I hope my readers will send this blog or the links to their friends, especially to those in swing states. Romney is not qualified.

Important political stories:

Why Freddie Mac Resisted Refis

How to Act Human, Take Two: The Search for the Real Romney By James Lipton


The Big Three: Bailout or Bankruptcy?

with one comment

I’ve been thinking about this issue for as long as it’s been in the news. Maybe longer – ever since Obama said he wanted help the auto makers retool as a way to create greener cars and keep jobs in this country that couldn’t be outsourced.

I have very mixed thoughts on this issue. I can see both the pros and cons, and neither of them seems to outweigh the other.

On the pro side, if the Big Three go down not only will over 2,000 auto workers be out of jobs, along with potentially thousands more in allied companies who supply the Big Three, the U.S. would be left with no American car companies. No domestically owned auto companies.

Yes, there are foreign auto companies, like Toyota and BMW, who have plants here in the U.S. and hire our auto workers. But those companies are not domestic. Profits are shipped back to the countries of origin, i.e. Japan or Germany. That’s kind of like the whole oil problem: we buy crude from overseas and refine it here. A transfer of our wealth to other countries.

By letting the Big 3 go under, we’d be doing the same thing again. Is that what we want? Or do we want an independent manufacturing base that is able to sustain our domestic needs if need be and to keep our wealth at home?

By providing the monies (a loan, I hope, rather than a free money bailout), the Big 3 would be granted the time to reorganize their companies to become more lean and competitive and to retool to make the cars the future will require without a huge loss of workers’ jobs.

On the con side, the Big 3 have failed in multiple ways and probably deserve to undergo bankruptcy. One of the Big 3 CEOs, I think it was GM’s, said he did not believe in global warming, that it was all a hoax. He also stated there was no need to build fuel efficient cars or cars using alternate energy sources, even though GM has done so for the Brazilian market. His opinions prevented the company from innovating. And opinions like his keep fuel efficiency levels of new models at approximately 35 mph/highway. In comparison, Toyota and Honda met that standard ten years ago.

In addition, if the Big 3 undergo bankruptcy proceedings, the companies would be required to reorganize – become more lean and competitive. Bankruptcy reorganization would require the companies to sever losing products and develop competitive products.

In addition, there are a number of independent domestic auto makers on the horizon here in the U.S. These companies are developing cars that are on the leading edge of technology. These companies potentially could replace the Big 3 if provided “seed” money, rather than giving it failing companies who refused to innovate until they saw a big red smear across their balance sheets.

Even now, the Big 3 have chosen to eliminate research and development, rather than investing in their only hope of survival. They’ve even gone so far as to ignore new innovations in the market, rather than investing in them. The Big 3 are mired, it seems, in old ideas that are no longer applicable to the world’s – and our – economy and mind-set.

I still believe that the American worker is the most productive of any in the world and that they are the most innovative. So, should we allow the Big 3 to continue in an environment in which millions of workers have already lost their job? Should we put even more people out of work when no state can afford the unemployment they’re already dealing with? Should we allow a management staff to continue in place that refused to see the future until it hit their bottom lines?

Or should we give them the money with very definite restrictions on how it’s used, such as retooling, research and development, and innovation, with defined limits on salaries, bonuses, etc. until the companies return to profitability to keep current U.S. auto workers employed and allied companies alive?

Or should we allow them to go into bankruptcy and put our “seed” money elsewhere, into domestic companies that are already taking the lead on energy efficient cars.

For me, it comes down to a social issue versus an economic issue. Keeping thousands of hard working families afloat now when the country is already reeling from a financial crisis, lack of consumer confidence, and ever growing daily news of layoffs that some economists say may reach as high as 8 or 9 percent in the next year. Or do we back the enterprises of the future, without regard for the thousands more workers left without jobs?

And in the meantime, while these new domestic auto companies build up, do we allow even more transfer of our domestic wealth (trade deficit) to grow exponentially?

It’s a hard choice. I’m glad I don’t have to make it.

Out of curiosity, what would you do?

%d bloggers like this: