Mitt Nailed It

[Bud Struggle]

http://www.nytimes.com/2008/11/19/opinion/19romney.html?hp

November 19, 2008
Op-Ed Contributor
NY Times

Let Detroit Go Bankrupt
By MITT ROMNEY
Boston

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

:redstar2000:

[Dean]

The notion that workers are somehow to blame for an of the price increases or economic shuddering is ridiculous, and you well know that.

[Bud Struggle]

The notion that workers are somehow to blame for an of the price increases or economic shuddering is ridiculous, and you well know that.

Either MAKE the Japanese and the Germans GET unions in their American plants (stupid idea) or get rid of the unions for the American automakers. These companes AMERICAN plants DON'T have Unions.

The Big Three need a FAIR playing field.

:redstar2000:

[Plagueround]

The notion that workers are somehow to blame for an of the price increases or economic shuddering is ridiculous, and you well know that.

Very much this. I hate to simply degrade into being vulgar...but fuck Mitt Romney.

[Bud Struggle]

Then let them go out of business. I drive a very high end VolksWagon myself, what do I care? Seriously, throwing money at the problem won't solve anything--these companies need to restructure--and union give aways are part of the restructure process.

Time for the management, the stockholders and the unions to take a step back.

They all failed.

:redstar2000:

[Killfacer]

i say you just let them fail, American cars are shit anyway.

[Bud Struggle]

i say you just let them fail, American cars are shit anyway.

EXACTLY. Union contracts make them a cool $2000 more cost to produce each above equal foreign products. No wonder they are shit.

[Guerrilla22]

EXACTLY. Union contracts make them a cool $2000 more cost to produce each above equal foreign products. No wonder they are shit.

Not true. Remember only a small amount manufacturing is actually done in the US. A large amount of production is done in Mexico where the workers are not unionized and only make about the same amount per hour as the average minimum wage worker in the US with no benefits. After all is said and done, the cost per worker for the big three is equivalent to that of Toyota, whose workers are not part of the UAW. The heads of the big three failed to innovate, it's as simple as that.

[Bud Struggle]

Not true. Remember only a small amount manufacturing is actually done in the US. A large amount of production is done in Mexico where the workers are not unionized and only make about the same amount per hour as the average minimum wage worker in the US with no benefits. After all is said and done, the cost per worker for the big three is equivalent to that of Toyota, whose workers are not part of the UAW. The heads of the big three failed to innovate, it's as simple as that.

No, the overall price per hour of GM workers is close to $75 and Toyota close to $35.

But even if it's the fault of mamagement--the companies should fail. Bad business is bad business. Surely you don't think it would be anything to do with Capitalism to save these loosers?

[Guerrilla22]

The average salary of a US worker from the big three is a little over 16 dollars more than what Toyota pays their US workers. However, a large amount of US automobile production occurs in Mexico where the wages are minescule, which basically evens out the differntial.

No, I don't think there should be a bailout either. It should be kept in mind that when a business fails it's always the fault of those running the business, making the decisions. The big three have a long history of making poor business decisions, people shouldn't lose sight of this.

[Plagueround]

Surely you don't think it would be anything to do with Capitalism to save these loosers?

I'm going to take a queue from Octobox on this one and place the blame on corporatism (which is a part of capitalism in it's current form). At the very least, no matter how much one tries to spin it, there is nothing socialist about this. ;)

[Bud Struggle]

I'm going to take a queue from Octobox on this one and place the blame on corporatism (which is a part of capitalism in it's current form). At the very least, no matter how much one tries to spin it, there is nothing socialist about this. ;)

I'll agree there. Corporatist and Unionist, and they are much the same thing.

[Dean]

I'll agree there. Corporatist and Unionist, and they are much the same thing.

Pray, but don't expect salvation. The end holds nothing but deflation.

[synthesis]

I'll agree there. Corporatist and Unionist, and they are much the same thing.

That just doesn't make any sense, in theory or in practice.

"Corporatism" is simply that element of capitalism that free-marketeers wish didn't exist, as it puts all the holes in the laissez-faire doctrine.

Business and government will always be inextricably intertwined in capitalist society. They need each other.

The philosophy that "the market will prevail" denies the fact that when times get bad, the market usually does not prevail.

What you disingenuously call "unionism" is the flip side of that coin. The capitalist government uses "corporatism" to rescue the business owners and "unionism" to pacify the workers - both of whom regularly get fucked by the "free market."

[Die Neue Zeit]

No, the overall price per hour of GM workers is close to $75 and Toyota close to $35.

But even if it's the fault of mamagement--the companies should fail. Bad business is bad business. Surely you don't think it would be anything to do with Capitalism to save these loosers?

Since you've become a social-democrat, I'd like to posit this to you, with my "mainstream cap" on my proverbial head: perhaps the government should buy the workers' pension contracts (so that workers won't get scammed out of their hard-earned pension savings) and THEN decide on whether to bail out the businesses with additional taxpayer money. If those businesses go into bankruptcy as normal, the pension contracts will be scrapped.

[Bud Struggle]

Since you've become a social-democrat, I'd like to posit this to you, with my "mainstream cap" on my proverbial head: perhaps the government should buy the workers' pension contracts (so that workers won't get scammed out of their hard-earned pension savings) and THEN decide on whether to bail out the businesses with additional taxpayer money. If those businesses go into bankruptcy as normal, the pension contracts will be scrapped.

Well, here's my problem with Unions like the UAW. They aren't out there to help workers get fair deals from their employers--they are major businesses in themselves that work hand in hand with company management to loot the car companies out of every cent they can get.

It's just not a workable model for a successful business. And I'm no fan of the management of these companies--those guys make WAY too much money for the crappy job they are doing. I think the current management has to go and the current union has to go and both the new management and the new union have to sit down and work out TOGETHER how best to make GM and Ford and Crystler profitable as companies and yet provide fair and decent wages and pensions for their workers.

It's not all that hard to do. The problem is that these companies are being used as cash cows for all concerned. And that was great when there was no competition--but now there is and somehow the competition--Toyota and Honda and BMW (all make in the US WITHOUT Unions) see do a fine job of taking care of their employees and making good cars. I'm not for getting rid of Unions per se, but there is nothing in the UAW worth saving.

What's at fault here is the crappy business model that the companies and unions have been using all these years.

[danyboy27]

i completly agree with tomk on this one, unions lost their real meaning with time and in some sectors became a threat.

air italia was not able to make their plane take off beccause the union decided to refuse the buisness concession, has a result they didnt had enough money to buy the fuel!

In france, union really mess up the whole transportation sector when they are on strike, often for petty minor detail.

we are talking of big powerful organization with thousand, sometimes million of member, and millions of dollars reaped per year from the worker, they are processing their things the same way a multinational would do:more member, to get more money, to become bigger.

[RGacky3]

About the Unions, blaiming it on the Unions is Morally rediculous and empirically rediculous.

Its morally rediculous because its like arguing FOR slavery because its more competative, which may or may not be true, imagen the argument a british cotton company in the 1800s has with his shareholders "Listen the Americans don't have to pay their workers, they can push out cottom at a much lower price, we need to be competitive.

Its Empirically rediculous because German Auto workers (in Germany at least) have a LOT more rights and the Unions have a lot of power and pull, and their companies are doing ok.

The reason Auto companies are going under is not because the workers are getting to much, its because manegement is playing the market horribly.

That being said I don't nessesarily disagree with Tom in that a lot of Unions are becomming businesses in themselves, but even a somewhat corrupted Union is better than giving the Boss all the control, because at least the union is somewhat answerable to the workers.

Saying that somehow the auto companies will jump back is being unrealistically optomistic, what most likely will happen is the Capitalists will take what they can and then sink the ship, meaning they will be gone.

Any Industry that is too big to fail either should'nt exist, or should be publicly controlled, which means publicly controlled when its doing well, not when its failing. That should have happend a lot time ago.


What you disingenuously call "unionism" is the flip side of that coin. The capitalist government uses "corporatism" to rescue the business owners and "unionism" to pacify the workers - both of whom regularly get fucked by the "free market."

Your absolutely right, however in some countries, especailly European social-democrat ones (the ones that are still clinging on), the Unions have a lot of influence on the government, almost more so than the Capitalist, and actually benefit the workers, in that sense the Unionism is positive, the key to Unions is keeping them democratic.

Also talking about Unions making these companies uncompetitive is one thing, I say bailout the companies and hand it over to the workers, with public oversight, instead of punishing the workers, make the manegement accountable for once.

Or don't bail themout but take whatever money the bosses have and make them keep their worker contracts.

[RedKnight]

Well, here's my problem with Unions like the UAW. They aren't out there to help workers get fair deals from their employers--they are major businesses in themselves that work hand in hand with company management to loot the car companies out of every cent they can get.

It's just not a workable model for a successful business. And I'm no fan of the management of these companies--those guys make WAY too much money for the crappy job they are doing. I think the current management has to go and the current union has to go and both the new management and the new union have to sit down and work out TOGETHER how best to make GM and Ford and Crystler profitable as companies and yet provide fair and decent wages and pensions for their workers.

It's not all that hard to do. The problem is that these companies are being used as cash cows for all concerned. And that was great when there was no competition--but now there is and somehow the competition--Toyota and Honda and BMW (all make in the US WITHOUT Unions) see do a fine job of taking care of their employees and making good cars. I'm not for getting rid of Unions per se, but there is nothing in the UAW worth saving.

What's at fault here is the crappy business model that the companies and unions have been using all these years.
Unions like the UAW are what some Communists refer to as the "labor aristocracy"http://en.wikipedia.org/wiki/Labor_aristocracy. These are organised labor which enjoy social privilege, in part by there nation exploiting other nations, through economic imperialism.

[synthesis]

Your absolutely right, however in some countries, especailly European social-democrat ones (the ones that are still clinging on), the Unions have a lot of influence on the government, almost more so than the Capitalist, and actually benefit the workers, in that sense the Unionism is positive, the key to Unions is keeping them democratic.

I didn't mean unionism in general, I was referring to what he labeled as unionism - those organizations which have been vetted and abetted by the bourgeois and whose leaders have interests distinct from the people they purport to represent.

[Dimentio]

Either MAKE the Japanese and the Germans GET unions in their American plants (stupid idea) or get rid of the unions for the American automakers. These companes AMERICAN plants DON'T have Unions.

The Big Three need a FAIR playing field.

:redstar2000:

The thing is that in the USA, the worker healthcare and pensions are paid for by the corporations, while in most other civilised nations, the state pays that through taxation.

I wonder how much money GM, Ford and Chrysler wastes on lawyers to get reasons to not pay for healthcare or retirement?

[RGacky3]

Unions like the UAW are what some Communists refer to as the "labor aristocracy"http://en.wikipedia.org/wiki/Labor_aristocracy (http://www.anonym.to/?http://en.wikipedia.org/wiki/Labor_aristocracy). These are organised labor which enjoy social privilege, in part by there nation exploiting other nations, through economic imperialism

What I don't like about that term labor aristocracy is that it demonises skilled labor, as if they are part of the ruling class, which is far from true. Many people (ehem Maoists) have even gone so far as to say that ALL WHITE WORKERS in America are labor aristocracy and thus, in a way, the enemy.

Now while I'll say that these Unions and those Union officials are essencially pro busienss, to paint a segmant of the working class as a labor aristocracy is wrong, and devisive.

The working class of rich countries may benefit somewhat from third world exploitation (much less than the Capitalists of both countries), but they also will benefit a lot more by being emancipated along with third world workers.


I wonder how much money GM, Ford and Chrysler wastes on lawyers to get reasons to not pay for healthcare or retirement?

Just goes to show how class war sometimes goes beyond pure profit motive, its about power.

[Bud Struggle]

You gentlemen still don't get it. The era of confrontation is over. The rich, the poor the owners and the workers are now all educated and (mostly) thoughtful and intelligent people. We don't need hostilities or fights--we can all discuss together how to make corporations responsible to both management and the workers to produce a GREAT PRODUCT.

Internal fighting and greed by the management and the unions is what is killing the auto makers. I'm not saying the workers shouldn't have collective barganing--but it shouldn't be done in the winner take all style as its been done in the past. It's not productive and it costs EVERYBODY money. It's bad Capitalism and bad Unionism.

These are public companies everybody where $1.50 (that about what a share of GM cost these days:rolleyes:) can get the full financial analysis of where every cent the company makes goes. Everyone can sit down and then figure out what's fair for everyone. The workers can't get $70 and hour and the CEO can't get $70 million dollars pay. The stock holders can't get a $7. return on a $1.50 stock.

If this is all approached reasonably--there should be little or no conflict. And the base line is money in the pockets of the management, the workers and the stockholders should be based on HOW THE COMPANY PERFORMS. Company earnings growth should be the job of every employee and owner of the firm, because everybody's paycheck should be based on profits not pre negotiated contracts.

I do it this way in my business and I make money, my employees make money and our growth rate is wonderful. Nobody is afraid of the boss yelling at them for screwing up--they're responsible for their co-workers paycheck. That's incentive.

[PostAnarchy]

Yea blame the unions for asking for some measly concessions from the big industrlialist!! :rolleyes::rolleyes:

What else is new?

[RGacky3]

You gentlemen still don't get it. The era of confrontation is over. The rich, the poor the owners and the workers are now all educated and (mostly) thoughtful and intelligent people. We don't need hostilities or fights--we can all discuss together how to make corporations responsible to both management and the workers to produce a GREAT PRODUCT.

As long as the few are in control, the few have the money and the power, then its not over, if it IS over all that means is workers becoming willing slaves, you don't get it, Capitalism is a tyrannical system.


Everyone can sit down and then figure out what's fair for everyone. The workers can't get $70 and hour and the CEO can't get $70 million dollars pay. The stock holders can't get a $7. return on a $1.50 stock.

Impossible in a Capitalist system, because Capitalism is'nt fair, and the only way the CEOs will "sit down" with the workers ever would be after a long long struggle.

You ahve to remember whos in control here, the power structures, its the Capitalists.


Company earnings growth should be the job of every employee and owner of the firm, because everybody's paycheck should be based on profits not pre negotiated contracts.

Problem is those profits won't reach the workers without a sturggle or contracts.

You have this notion that Capitalism can be made fair, in cant, because who's gonna make it fair? The Capitalists? No, the government? I doubt it, the workers? They can't without a long long struggle, and ultimately taking over.

[PostAnarchy]

You gentlemen still don't get it. The era of confrontation is over.
.

That "gentleman" is where you are wrong!

We are now entering into a new era of confrontation and class warfare. Living wages have gone down, standard of living has gone down and we have only just begun to enter into a deep, global recession.

Class confrontation on a global scale not seen in decades in the order of the day! :)

[Bud Struggle]

That "gentleman" is where you are wrong! Well, I know that! :lol:
Another lousy Union:

http://www.theonion.com/content/video/attractive_girls_union_refuses_to

[Bud Struggle]

As long as the few are in control, the few have the money and the power, then its not over, if it IS over all that means is workers becoming willing slaves, you don't get it, Capitalism is a tyrannical system. Will all dure respect--you as much as an anachronism as the CEO of GM. GM and Ford AREN'T the business model of the future--if you haven't noticed they are 1930s industries trying to make it in the 21st century. They are dinosour industries with old time unions and old time products. You are trying to spark a Revolution with wet matches when you think there's any future of Captalism OR Socialism in the auto makers.

The companies are a joke and their unions are a joke. Unions are pretty much a thing of the past--it's only old style businesses, like the car makers, that have them.


Impossible in a Capitalist system, because Capitalism is'nt fair, and the only way the CEOs will "sit down" with the workers ever would be after a long long struggle. Then they will be wrestling over the bones of a dead industry.


You ahve to remember whos in control here, the power structures, its the Capitalists. The power has long moved away from these guys.


Problem is those profits won't reach the workers without a sturggle or contracts.

You have this notion that Capitalism can be made fair, in can't, because who's gonna make it fair? The Capitalists? No, the government? I doubt it, the workers? They can't without a long long struggle, and ultimately taking over.But in the end it's not about fair--it's about what works and what doesn't work.

[PostAnarchy]

For a multi-millionaire businessman-capitalist like Mitt Romney it must be very easy to say something like "Abolish all the benefits and concessions that have been won by the unions and working people over the last decades of struggle!" And to announce we have entered a new epoch - the epoch of super exploitation.

The sad news is for millionaire-capitalists like Romney is that they are Dinosaurs and they are doomed. For him however, his material existance predermines his instrinic stance against unionization.

I guess Marx was right when he said: Being determines consciousness.

[RGacky3]

The power has long moved away from these guys.

Nope, they still hae the money, they still have the power, and btw, who are you claiming has the power now.

If anything they have more power than they had before, because Capitalism has become global and more centralized.


Will all dure respect--you as much as an anachronism as the CEO of GM. GM and Ford AREN'T the business model of the future--if you haven't noticed they are 1930s industries trying to make it in the 21st century. They are dinosour industries with old time unions and old time products. You are trying to spark a Revolution with wet matches when you think there's any future of Captalism OR Socialism in the auto makers.

The companies are a joke and their unions are a joke. Unions are pretty much a thing of the past--it's only old style businesses, like the car makers, that have them.

You right new style business has sometimes managed to get rid of the unions, but that does'nt make it better, all it means is that Capitalists are getting more power and workers are getting less

Also people still buy cars :P.

In your opinion, what is this new Capitalism your talking about, this new business, and where is it?


But in the end it's not about fair--it's about what works and what doesn't work.

Its about what works ... FOR WHO! Thats the question Capitalists never seam to care about.

[danyboy27]

and what about an alternatives to union?

we are all talking about getting rid of union or enforcing them, but so far nobody talk about alternatives.

beside the salary, unions are fighting for dental care or healthcare right?

make universal healthcare.
pass a laws allowing every person who earn below 30 000 per year to get free dental coverage and free glasses coverage.

make working contract obligatory for every profession.
Allow to the people who ask for it free services of a state lawers in order to read their contract before they sign.

[RGacky3]

There is no alternative to Unions, or some type of worker based democratic organization (i.e. Unions), you can't put it in the governments hands, why would you? They've never been out for the workers, also thats not a solution, because you won't be able to get the government to do that, if you do, the Capitalists still ultimately have the power and will stop it or remove Capital.

The answer HAS to be from the workers themselves.

[danyboy27]

There is no alternative to Unions, or some type of worker based democratic organization (i.e. Unions), you can't put it in the governments hands, why would you? They've never been out for the workers, also thats not a solution, because you won't be able to get the government to do that, if you do, the Capitalists still ultimately have the power and will stop it or remove Capital.

The answer HAS to be from the workers themselves.

its on issues like that you and me could argues for hours beccause of our fundamental differences of perception of the world.

i hate when it happen.

[Charon]

Unions are the worst capitalists of them all. They corrupt the workers into accepting and worse, participating in capitalism. USA auto manufacturers are 20 years behind the rest of the world in technological ability, they only started using fuel injectors in the last 5 years. The only thing worth keeping in any restructuring would be the workers therefore the government should bankrupt the existing companies and use the money to assist start up companies. Companies that make cars that don't look like the concept came from the doodle on the back of a 3rd grader's maths book, there is no accounting for bad taste. I get the feeling that when Tom says "a very high end Volkswagen" he means a Porsche.

[RGacky3]

Unions are the worst capitalists of them all. They corrupt the workers into accepting and worse, participating in capitalism.

Yeah, so whats your alternative. Unions, are the only organizations that organize workers to fight against capitalists, the good ones at least.


its on issues like that you and me could argues for hours beccause of our fundamental differences of perception of the world.


I would'nt say that, your understanding of the world is very limited.

[danyboy27]

I would'nt say that, your understanding of the world is very limited.

seriously fuck it.

insulted twice a day is like the maximum i can endure.

[PostAnarchy]

Unions are the worst capitalists of them all. They corrupt the workers into accepting and worse, participating in capitalism. .

I'm sorry but this makes no sense - Unions do not "force" workers to participate in capitalism, they already do! If you're not a primitivist, which I hope you're not, you will cede the point that when you live in a capitalist society, participation of it is mandatory regardless of how much you despise it.

Unions can act as a powerful bulwark giving workers important concessions against the worst of exploitation in a capitalist society before the revolution does away with it for good.

[jake williams]

Didn't read. Mitt Romney has never been correct about anything in his life.

[Labor Shall Rule]

GM doesn't want to provide the capital to provide fuel injectors and other 'modern' automobile improvements - it's not profitable for them. It's ridiculous how the blame is falling on the unions, even if they do not dictate how the company operates.

[Bud Struggle]

GM doesn't want to provide the capital to provide fuel injectors and other 'modern' automobile improvements - it's not profitable for them. It's ridiculous how the blame is falling on the unions, even if they do not dictate how the company operates.

GN should die. Fine with me.