Ford Builds Tough Luck
How’s that old saying go? Ah - yes! Rich man wins, poor man pays!
It’s no secret that the American auto industry is on its last legs. What is secret is why. But like all good secrets, the evidence is out in plain view for all to see: the managers of American corporations have lost control of the ship and are throwing their workers overboard while their luxuriously-profitable Titanic plows ahead into the long-predicted economic iceberg.
At least they are offering life preservers for the icy conditions ahead.
It would make it easier to collect the bodies afterwards:
Ford Offering 75,000 Employees Buyout Packages
By MICHELINE MAYNARD and NICK BUNKLEY
September 15, 2006
The Ford Motor Company agreed Thursday to offer buyouts and other incentives worth as much as $140,000 each to its 75,000 hourly workers in the United States to persuade them to leave their jobs. It is also the latest sign that Detroit has decided it needs to shrink to survive.In all, Ford has about 110,000 employees in the United States.
By my rough count, that’s almost all of their US hourly workforce. The white-collar Ford executive may well be feeling some heat this morning as well, considering that Ford Motor Co. said [9/15/06] it’s cutting its salaried work force by one-third — or 14,000 jobs.
Ford and GM bet their golden shipyards that Americans would continue to buy fuel-thirsty SUVs and large trucks in an effort to assuage their psychological insecurities for not being Movers and Shakers like their (usually sport) heroes. The advertising massaging which ‘convinces’ them that they can fix themselves goes: “Own the road! Buy OUR Highway Hercules - and watch that traffic jam steer aside as you drive your dominance! That’s REAL power!”
People fall for that stuff because only their brain stems are engaged. The rest of their brain - the logical reasoning part - doesn’t get to register that buying such a Tarmac Terrorist is going to eat them alive economically.
One would work only to support such a Mean Main Street Monster.
That’s the reason the smart ones, knowing that they make only Wal-Mart wages, wouldn’t buy one. Too many of the others did anyway, and now the used car lots are full of cut-rate late-model Ford Expeditions and Lincoln Navigators (along with their competitive counterparts) that the dealers can’t sell.
DaimlerChrysler is forcing their dealers to take delivery anyway!
Aping the recent layoff actions of their employers, Americans dumped their costly road toys and won’t buy more. The automotive employers then dumped more of their workers and won’t hire more.
Foreign investment columnists suggest that this is crazy, and maybe the Ford Family should instead dump their costly road toy-building playlot, abandon the mass market, and focus only on building luxury cars - the brands they bought a few years back and are now looking to sell.
I’ve been taught that our society is a tripod - People, business, and government. The idea was that when two of these ‘legs’ had an issue, the third would step in to balance them. But when one is tied to another, as business is with government (as the establishment of a fascist nation continues), there is no balance, despite what some still believe:
Everyday Low Wages
New York Times Editorial, September 15, 2006
Mayor Richard M. Daley of Chicago wielded the first veto of his 17-year tenure this week — and the City Council supported him — striking down Chicago’s short-lived plan to force behemoth retailers like Wal-Mart to pay higher wages and benefits. But the choice — between no jobs or low-wage jobs — is probably a false one.Wal-Mart and other mega-retailers, like Target and Home Depot, need market share. Wal-Mart especially needs more American consumers, having recently pulled the plug on unsuccessful attempts to expand in Germany and South Korea. It is currently planning to expand in Santa Fe, N.M., where local laws require higher wages than the company normally pays.
Given Wal-Mart’s profits,
the company could improve its wage structure
and still beat the competition.If Mr. Daley had not wielded the veto, it would surely have faced a court challenge. But proponents of living wages have the moral high ground, and are increasingly finding a political voice.
Chicago hasn’t heard the last of them, and Washington hasn’t either.
What about Bentonville, Arkansas - the real seat of the American government? Have they heard the word?
I doubt it - but I digress.
Extortionate employers such as Wal-Mart are every reason why Americans CAN’T buy the SUVs that Ford and GM have decided upon to base their profitability. That stingy-wage problem was temporarily paved-over with creative financing schemes such as leasing, but that only puts off the day of reckoning until one can dump it into the housing sector: When the debt rose high enough, the strategy went, people would refinance their homes, use up what equity they had to pay for all the 8-mile/gallon freeway ‘fun’ they had, and the Good Times would continue to roll down the road.
In case anyone who is reading this hasn’t been paying attention, the housing sector is now going down even faster than the automotive sector. It isn’t going to be able to be the lifeboat one more time.
Credit is drying up. One of my Good Orange County (CA) Republican [GOC(CA)R] coworkers owns his home free and clear. He recently tried to open a line of credit on his $650,000 home in Southern California, and had trouble finding someone who would extend him credit.
We make wages commensurate with the UAW workers Ford is attempting to buy off, far above that of the typical Wal-Mart menial, so there is only one reason why lenders wouldn’t bite: they know what’s coming.
Having already been burned
by the automotive sector’s creative SUV financing,
the lending sector isn’t about to be stuck with expensive homes
that no one can buy!
This is called prevention. What the automotive industry is doing is called ‘cure’ - one that will kill the patient. Don’t ask the medical sector to deal with THAT problem - they have already put themselves on life support!
The ’solution’ offered by those from the right to those former-high-wage earners to regain that kind of economic stability is to ‘go to college’. That isn’t so easy anymore, as this article points out:
Debate Grows as Colleges Slip in Graduations
By ALAN FINDER
September 15, 2006
Salme Harju Steinberg, the president of Northeastern Illinois University, said many students juggle work, family and school, which is why it may take longer than four years for them to attain their degrees.At Northeastern Illinois University, a tidy commuter campus on the North Side of Chicago, only 17 percent of students who enroll as full-time freshmen graduate within six years, according to data collected by the federal Department of Education. At Chicago State University on the South Side, the overall graduation rate is 16 percent.
As dismal as those rates seem, the universities are not unique. About 50 colleges across the country have a six-year graduation rate below 20 percent, according to the Education Trust, a nonprofit research group. Many of the institutions serve low-income and minority students.
With high-wage employers like Ford laying off workers, the avalanche effect will see to it that the vast majority of us will be low-income.
Kevin Carey, the research and policy manager at the Education Sector, a nonprofit research organization, said governors and legislatures could make it clear that the presidents’ continued employment hinged on improving graduation rates. “That’s what businesses do,” he said.
“When you have a system where virtually everyone fails,
how is that different from designing a system
in which the point is for people to fail?” Mr. Carey added.
That may already be the case, for the expenses incurred in supporting such an ‘educational’ system would prove to be much less costly, lowering the draw on the governmental budget and providing yet another avenue for Bu$hCo tax ‘relief’. In a self-fullfilling way, the results of years of gutting educational budgets is now being use to justify them further:
Thom Hartmann: Free Public Education; Why We Should Have it, Why the Cons Hate it
September 14, 2006
Alexis de Tocqueville came to America in 1834 to figure out how Americans were making democracy work. Along the way he met with a pig farmer, just a simple country bumpkin by de Tocqueville’s reasoning, and asked him about international politics. And this farmer went into an insightful, knowledgeable rant about French politics.
De Tocqueville’s conclusion was that a well-educated populace
was essential to democracy-
-and that, unlike France in that era, we had one here.
The operative word is: HAD:
- A study in 2003 by a researcher at Yale University revealed that more than 50 percent of first-year college students couldn’t produce papers free of grammatical errors–in simple language, hey can’t write.
- Eighty percent of graduating high school seniors say they will never again voluntarily read another book.
- Only one-third of U.S. students are proficient readers; two-thirds lack sufficient reading ability to comprehend novels, textbooks, and other forms of “complicated writing.”
Education was once considered by the elites so important to democracy in America that Thomas Jefferson founded a college to educate the middle class of Virginia, who at that time had no other access to higher learning:
Jefferson started the University of Virginia to provide free higher education to the yeomanry, which is what the middle class was called back in the 1700s. The state university system grew slowly over the years and really picked up under FDR.
But today’s elites feel that there’s nothing better to educate the uppity masses than by using the lesson of the political champions of the wealthy removing these democracy props:
Governor Ronald Reagan ended free enrollment at the last state university system to offer it, the University of California, in 1966. Today government funding for higher education is at minimal levels, particularly compared with Europe and Japan, where in most cases university educations are free or nearly free.
Tell that to your kid when he loses his job to an offshoring firm!
Under George W. Bush, even the student loan program has been cut significantly, and eligibility for grants to low-income students– called Pell Grants–has decreased dramatically; in 2004 alone, for example, Bush cut eighty thousand students off the eligibility list for Pell Grants.
The assault is now being directed at the primary levels:
Now the Bush administration wants to privatize K-12 education, as well. Bush advocates replacing free public education with ‘tuition vouchers’ good at private schools, including parochial schools and for-profit schools.
His No Child Left Behind Act
set up thirty-seven ways
public schools could fail.A failing school is sanctioned under the act with a loss of funds–so that schools that need the most help get the least. By September 2004, 36 percent of California’s schools had already been put on that list. Instead of being a program to improve public education, No Child Left Behind was designed to kill the public school system.
As de Tocqueville learned, an educated populace is vital to the workings of democracy. Thom Hartmann wants you to know this lesson also:
Democracy requires an educated middle class for its survival. At its most simple level, alone among political systems, democracy requires citizens to vote for the country’s leaders and policies. If you can’t read the ballot, if you don’t know enough math to understand the economic argument a politician is making, if you don’t know the history of the country and our laws, how can you decide how to vote?
By watching Fox ‘Newz’! They will tell you how you are to vote!
Besides, isn’t there a belief being promoted that government support for education is being wasted? That’s the message being sent out by the infamous Ohio Secretary of State Ken Blackwell!
In an email I received from Jesse Taylor of Ted Strickland’s gubernatorial campaign staff, I learned that Blackwell is saying:
Extensive research shows that the best schools spend at least 65% of their money in the classroom. [Matt Naugle on Ken Blackwell’s blog, 14 Sep 2006]
There is documented evidence that Blackwell deserves wearing the dunce cap in the corner:
Unfortunately for the Blackwell campaign, there is no such research.There is, however, a paper by the highly respected Standard & Poor [PDF] which says there is no evidence that spending 65 cents or more in the classroom actually leads to better results.
The people who are pushing Blackwell toward this position apparently know that their textbook is blank:
First Class Education, which is behind the [65 cent] proposal, revealed in a memo [PDF] that there is no conclusive evidence whatsoever that spending 65 cents of each education dollar [in the classroom] results in better test scores:While evidence is decidedly mixed as to whether the amount of money spent per child is a determinant factor in test scores, the rationale for requiring more of current expenditures to be spent on instruction in the classroom is intuitive.
In answer to this assertion, the question is - WHO is going to provide the means to expend? The parents are about tapped out:
Across the country, some schools and education professionals report a growing movement from private to public.Ben and Courtney Nields of Norwalk, Conn., agonized over the issue last year when they moved their daughter Annie from the New Canaan Country School, set on a 72-acre campus, to a public school for first grade. The move was primarily economic — they have twins entering kindergarten this year and faced tuition bills of $22,500 per child.
Damn! That’s a lesson that would make anyone smart - even a Red State Bush supporter!
My wife happens to work in education. A great deal of the time they would much rather spend teaching the kids is instead t doing things that the parents should have been doing - except many of the parents are so busy working two or more low-wage jobs that they aren’t home to do them. We know this from the difficulty involved in contacting them to schedule parent-teacher meetings. One parent recently asked to have such a meeting on Saturday, and we assume that is because she can’t afford to take time off from work. We’re waiting to hear what the school administration has to say about that request.
Maybe if the parents were smart enough not to be convinced by slick advertising that owning an SUV for Mom (and a V-8 turbo-charged diesel extended-cab dual-axle pickup truck with the fancy 30″ wheels equiped with spinner hubs and knobby off-road tires for Dad) was so necessary, they would not be working so many low-wage jobs, and actually have enough time to do the most important job they have taken on: being parents!
If my worst fears are realized, and our economy crashes when China pulls away the ‘Welcome’ mat from the front door of the Democratic People’s Republic Savings And Loan when Uncle Sam comes along with hat in hand once again, maybe then they could find the time to be parents.
No one else will be watching their kids for them anymore.
They will be too busy providing for their own offspring.
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