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| Tuesday, January 06, 2009 |
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How Republican of you, Devyn. I mean that in a good way. |
To add, I feel pretty much the same way. But I’m concerned about the far-reaching impact of the collapse of the U.S. auto industry. It would be hard times for a lot of people. If there is to be a bailout it should be contingent on major concessions from UAW and limits on executive pay. |
This is what happens when you try to “spread the wealth around” — i.e., by enforcing unsustainably high wages via unions. It’s not “good for everybody.” |
btw no one’s really surprised that this request arrived just after the election, are they? this is payback pure and simple for union GOTV efforts. |
Yesterday in two news sources I saw those companies referred to as the “Detroit Three—formerly, the Big Three.” As one who worked as an engineer near Detroit for a few years, though not an the auto industry, I have mixed feelings about this. The current set up is not healthy and should not be sustained for all the reasons Devyn mentions, but I still want manufacturing in the U.S. If GM fails, the government will still end up bailing out their retirees; that will be expensive, but maybe cheaper than propping up the whole company. Besides labor costs, the industry is suffering for a decade of neglecting cars because trucks were where the money was. Except now it’s not. |
#1 - Tom - rather scary isn’t it… #2 - Tom - I think that if the auto companies went Chapter 11, they would be able to break the UAW contracts and reorg into smaller more efficient companies. Some jobs would be lost, but overall the companies could then come back much stronger, if smaller and definitely more competitive. #3/4 moron mentality - yep, paybacks can be nice if you are a union… #5 John Mansfield - I think that Toyota and Hyundai have large manufacturing presences in the US, but they are not unionized. I think that a failure would not mean all jobs are lost, but a Chapter 11 as I outlined in the comment to Tom is a reasonable alternative. |
Outsource them all to Asia. |
queuno - Outsourcing to goreign companies is usually bad for our local economy in the long run. So many US companies operate overseas that it can be difficult for skilled laborers to find full-time positions here. We need to encourage comapnies to stay local and hire more FT employees rather than parsing out FT positions among lots of part-timers. |
I think that they should let them go BK and break the UAW. Its amazing to me how rich the UAW contracts are. It was simply not sustainable. I knew 22 year old guys who worked in a Ford plant in Chicago who made 110K a year back in the mid 1990’s. There are literally more Big 3 retirees then workers now. You could retire at age 52-55 and live for 30-40 years at almost full pay and free healthcare. The market finally caught up with the UAW and a management team that gave in on these contracts and built really bad cars. Lets not forget all the years of bad cars. I drive a Japanese car for a reason. |
PPP - True point, but the Union is what is killing the auto companies. Toyota and Hyundai are successfully building cars in the US, so no reason to off shore bbell - agree completely. I think the UAW is, hopefully, going to meet an untimely death… |
“But I’m concerned about the far-reaching impact of the collapse of the U.S. auto industry.” This is my only concern. From makers of auto parts to TV and radio stations that collect millions of dollars in ad revenue, the impact is much more far-reaching than we probably realize. But in the long run, I think it’s better to let things work themselves out. |
Declaring bankruptcy is not the same as going out of business. And yes, it would be hard times for a lot of people, but it’s already hard times for a lot of people (making far worse wages than those cited above) with unemployment at multi-year highs and the economy in the toilet. Let them declare BK–the stockholders have already been eviscerated, and the bondholders deserve to be for mispricing risk by funding them repeatedly while they were run so poorly. A bailout is just throwing good taxpayer money after bad. But we taxpayers already own an insurance company, two mortgage companies, and chunks of several banks. I guess why not throw some car companies in there. Maybe we can get some restaurants or movie theaters too. |
I personally hope that the UAW falls apart, including the ridiculous chapters consisting of graduate students at places like University of Washington. I find it possible that certain portions of the academic student employee population weren’t being treated quite fairly (mostly those in the social sciences and humanities), but what interest does United Auto Workers have in taking good care of international graduate students, for example? Oh, right, all the money garnished from their wages. |
I’d hate to point this out, but the only reason why the big three give their employees so much money is because of pressure from the UAW, not the corporate leadership. So the better question is, who are we bailing out, the union that didn’t know when enough was enough, or the company that didn’t know how to say no? |
I think the best possible scenario is a bailout with strings attached: You get the money and get to live another day only if you make some strategic layoffs, reduce wages to competitive levels, and agree to meet certain objectives. Handing them money without such concessions is throwing good money after bad. Allowing them to fail could push an already faltering economy into a full-fledged depression with no end in sight. Also, it’s hypocritical to bailout the banking industry and then tell the automakers to go jump in lake Michigan. Let’s take this opportunity to force the industry to be more competitive. |
Outsourcing to foreign companies is usually bad for our local economy in the long run. So many US companies operate overseas that it can be difficult for skilled laborers to find full-time positions here. We need to encourage comapnies to stay local and hire more FT employees rather than parsing out FT positions among lots of part-timers. Wow. There is so much to say here, on so many levels. I work in outsourcing. I can tell you that in technology, there’s no difference in technical quality between an Indian engineer, an engineer in Texas, or an engineer in Boston. Except generally, the engineer in Boston is most expensive and the engineer in India is cheapest (although, not as cheap as Malaysia). America has always “outsourced” its menial labor, and will always continue to do so. Companies that outsource non-core, “distracting” work will always then have more institutional energy (and money saved) to focus on big problems and their solutions. If the auto industry had killed off the unions (beware: I’m a big union supporter in other contexts, but not the UAW) and did all manufacturing overseas, it would have been able to save itself long ago. There need not be a net loss in jobs, but some of those forklift drivers would be doing other things. What’s the difference between closing an office in Utah or California and shifting the labor to Texas, or shifting it to Mexico? It’s the same principle… (And believe me, my company doesn’t even bother to recruit for certain technology jobs in CA. Because they want 30% more than North Texas, because of the cost of living. And we can’t convince people in MO or PA or FL or OH to move to CA, without a 50-60% increase in pay, which we’re not going to do.) I can tell you that in my time in the outsourcing business, I have NOT seen a net loss in domestic positions at the companies I deal with (and at our own). They are just different positions, focusing on strategic (as opposed to tactical) work. I have, however, seen our overseas positions increase 20-fold. This is partly because (a) we can’t find American engineers in the right cities at the right prices with the right backgrounds and (b) foreign engineers are every bit as good — engineering-wise (that’s a key) — as the Americans. I’m sure my case is different from the thousands of helpdesk people who’ve been laid off. Our American engineers are *more* productive now that we have offshore staff to prevent them from getting called in the middle of the night. (Would you give up 10% of your salary to not get woken up anymore in the middle of the night to fix a problem?) But a good engineer or a good analyst or a good programmer will be able to be a good engineer/analyst/programmer anywhere in America, if they are willing to readjust to the changing responsibilities of engineering in the US, and if they are willing to go to where the jobs actually are in America. Even if we’ve taken the menial technical work and sent it offshore, competent domestic engineers will always do well. Let companies outsource, and outsource freely. Those who do it blindly with no thought, end up bringing back key positions, because you can’t send it all overseas. Just the menial labor. The stuff that can be generally unionized. For a fraction of the cost. And a smart company would reinvest those savings into better (yes, better) products that they can sell for the same prices. I don’t see anything worth saving from the US auto industry. Let it all fail. Take the $25B and put into job retraining programs for Michiganers. If there’s still a market for crappy cars, someone will reinvent it. |
Personally, I love my Korean-designed/American-made. Best car I’ve ever had. Reliable, good gas mileage. I’ve never had a domestic car that comes close. |
#11 Tim J - Fair point - NPR claimed that it could be 3 million jobs, but another professor they spoke with said it was likely 1 million jobs and that assumed the companies disappeared completely which is unlikely, but either way there is going to be significant pain and suffering… #12 woodboy - Great points - you are correct the US taxpayer is effectively becoming shareholders in multiple industries. Soon we will be like a socialist country like Venezuela with everything under government control. #13 Ben Pratt - interesting… I have not really met anyone who thinks the UAW should stay, even my very liberal friends here in Mass. #14 Arlin Fehr - agreed that the UAW put a lot of pressure on the management, but the management is to blame as they caved into the unions demands. |
The government gave AIG billions of dollars and now they are back with their hands out again. When does it end … |
#16 Queuno - amen - I like your assessment. #17 Queuno - I have a Hyundai Sonata from 2000 and it is a gem of a car and the warranty is fantastic #19 - Danithew - NPR had a clip of Barney Frank answering that question - he said once the economy stabilizes - that is NOT comforting… |
Queuno-Yes, there is so much to say here. I understand the economic value of outsourcing. As you say, if you can pay a foreign worker less than what you pay an American worker for doing the same job, than why wouldn’t you? Right? You say that outsourcing is good because while we lose jobs in the short term, we’ll gain jobs in the long term. I say B-S. While this had become sacred economic dogma, I think it will be proved as false as the “markets will always correct themselves” doctrine we’ve adhered to these last few decades. Maybe it was true when only manufacturing jobs were outsourced, when only “menial” jobs as you call them were outsourced. And then you could say to someone, “Just get more education and get a more skilled job!” But now even those jobs are being outsourced. Tech jobs, legal research jobs, medical jobs, science jobs…all are being outsourced. There was just an article in the NYT that even jobs that recent MBA graduates would take at financial companies, 200k a year starting pay jobs, are now being outsourced. Hardly menial manufacturing work. So what specifically should a forklift driver who used to be paid $40 an hour do now? And where are these new jobs going to come from? They certainly haven’t been created this year, as we’ve shed 400,000+ jobs so. And if outsourcing is so great why as the standard of living in this country remained stagnant over the last couple of decades? And most importantly, where is outsourcing going to end? There are very few jobs that can’t be done cheaper overseas. So again, where will these new jobs come from? The answer given as I mentioned is always more education…just get more education and get a white collar job! We’ll outsource the basic jobs which will create more tech jobs. Well, first, again, even white collar jobs are being outsourced. The idea pushed by people like Thomas Friedman is that lack of science and engineering education is what is holding back Americans. B-S. At any given time, there are more highly educated scientists, software guys, and engineers than there are job openings in this country. And even if you’re the most highly educated engineer out there, some guy in India is still gong to work for cheaper than you, and corporations are still going to choose him over you. So what’s someone’s motivation exactly? You work in the outsourcing business so you will certainly have one view of the issue. But how many software engineers do you know? I know several and they can tell you that finding and keeping a job is quite difficult. Even when they are employed, every month their companies have layoffs as they move their advanced, well-paying tech jobs overseas. Job security is nil. Finally, not everyone is supposed to go to college. Really. We’ve pushed this idea that college is for everybody and it’s not. There’s no way to make every American college material or the kind of person that would thrive in academia. Even if you could, and let’s say we get every American go to college and even get their masters, what then? Are there enough jobs to go around? Nope. Today only 1/3 of Americans have college degrees. If that was 100%, we could not possibly employ them all in good jobs. So what are non-college educated Americans to do? They used to be able to support a family on a middle-class income by working in a factory…but those days are gone. Those working in Detroit could live a middle-class lifestyle. Without manufacturing jobs, the only jobs we have left are customer service and food service jobs. So now they’re trying to support a family on minimum wage. |
@15 it’s not as easy as it sounds to give cash with strings attached - unless the government actually takes a company into receivership (i.e., becomes a majority shareholder). minority shareholders simply don’t have that much power. @16 totally agree. we are in a global economy, and if companies find it unprofitable to operate in the U.S. they will go elsewhere. econ 101. so if we have high wages and high taxes, why should companies stay here? patriotism?? good grief. @17 the sorry state of American car quality is a bit overblown. The Buick Lucerne was rated just behind the #1 Nissan Maxima in initial (3-month) quality, well ahead of Honda and other such brands. (Reference: http://query.nytimes.com/gst/fullpage.html?res=950DEFDA1131F935A35755C0A96F948260) @18 on 14: you can blame management for giving into union demands, but remember that they hold the power to strike. strikes = assembly-line shutdowns and are extraordinarily costly, so it quickly becomes in the company’s best interest to cave on all but the most outrageous demands. |
Even if reducing amount of outsourcing were a net benefit to the U.S. economy (which it isn’t), there is very little the government can do about it without worse side effects. Moderate tariffs on services might slow the process down a little. Heavy tariffs or equivalent restrictions would invite a repeat of the Great Depression. Smoot-Hawley was a first class disaster. A modern equivalent would be even more destructive. It would likely provoke a trade war, give large companies a compelling incentive to reduce their U.S. operations to a skeleton sales and administrative staff, cause immense capital flight, destroy the value of our currency, cause interest rates to skyrocket, impair our ability to rollover the national debt, and end in hyperinflation and economic ruin. |
It’s hard for me to say. I think all the companies were pretty brain dead about predicting future trends. (i.e. they assumed SUVs were here to stay) That said GM has put forth a fair bit of R&D. The Chevy Volt actually does look impressive. Yet they didn’t have any things else. Ford and worse yet Chrysler were just embarrassing. One big problem is that they don’t sweat the details. When I drive a Nissan or Toyota with few exceptions everything is considered. And those little details add up. Most people I know with American cars regret them. Then there is the car rental business which I’m convinced exists purely to convince people to never buy American. Because after you drive a half dozen different American cars you start to just ask for something Japanese… Should they survive? I have far more faith in what GM can achieve. Chrysler is, in my mind, a lost cause. Ford is on the border. But as others pointed out their big problem were the union agreements in the 80’s. |
I think it is likely that both GM and Ford will survive. They will have to go through Chapter 11 and have their labor contracts rewritten though, or they will likely suffer the fate of the British auto industry, no matter how much money we loan them. |
#15MCQ - absolutely agree - use the bailout to break the union… Katie - while you bring up valid points, I am not sure I agree with you. If your points are valid across industries, then why do employers want to increase the number of H1B visas every year to get more skilled workers? Also why are there still so many technology startups in the US? And as Mark D says, not much the Government can or should do about it. Perhaps it is time for Americans to allow others to improve their standard of living while ours stays stagnant for a time… |
The car companies cannot break their labor contracts in any voluntary transaction. Short of a miracle, Chapter 11 or an extended period of stagnation, layoffs, and re-negotiation are the only options. |
Clark, there are a lot of people you don’t know, though. I drive a Buick–it rocks! I’m biased, Bill works for a Chevy dealership:) |
#21: Well said! I do not a plan. But when I do, at it’s core would not be: end jobs, cut wages, close plants. Unions do some bad things. But getting the small guy a good wage is not one of them. |
I think all the companies were pretty brain dead about predicting future trends. I disagree - car manufacturing is on a multi-year cycle, and the price of gas shot up in how many months? It has dropped from $4 to $2 in just a couple of months. I’d say there’s no way the auto manufacturers could have seen that change coming - recall that even Southwest failed to hedge the cost of fuel to this extent. The real problem is labor costs. Now that Democrats have near full control of the U.S. government — look for surprising turnarounds in the AK/MN/GA senate races — they will have little choice other than to capitulate to the union-controlled industries that in large part helped give them the election. Nanny Pelosi’s tongue bath for the auto industry is just the first step… |
Devyn, thanks for posting this. Those numbers are truly alarming. Do you happen to know if that includes beneits? Incidentally, since the standard work year is 2,000 hours, $73.20 per hour is $146,400 per year. That’s just downright alarming. Let ‘em fail. Down with unions. |
#31: Let the Unions live! Who else is getting HS Grads good paying job? Let the “Military Industrial Complex” fail. Let the Drug companies fail. Let the Humvee fail. Let the SUV fail (unless you can get a permit to own one). Let the Big Three live! Force them to rebuild America’s fleet with “Green Cars” |
Unions can live, as long as the taxpayers don’t have to prop them up. |
#16 “What’s the difference between closing an office in Utah or California and shifting the labor to Texas, or shifting it to Mexico? It’s the same principle…” It doesn’t have the same effect, though. Outsourcing can be good for big businesses but it’s not great for the American economy. When you shift those jobs to Mexico, they’re jobs that are no longer available to US workers. I understand the cost-saving that appeals to businesses to outsource but with our high unemployment rates, US businesses would be well served in the long run to find ways to open up jobs HERE. When our people are employed they spend more money. More money being spent leads to larger profits for companies. Granted US citizens will still buy foreign products but we all need to do something to help the economy improve. “…a good engineer or a good analyst or a good programmer will be able to be a good engineer/analyst/programmer anywhere in America…” This isn’t actally true. And while people *can* move to find jobs, moving every time you need or want a new position isn’t very feasible for most families. And moving to Mexico would be out of the question for most Americans (I don’t know if Mexico would allow it, either). As companies compare costs, they’re less likely to paid a skilled engineer/analyst/programmer what he’s worth in the states because they know they can get it cheaper elsewhere. “…you can’t send it all overseas. Just the menial labor.” So there’s no place for menial labor jobs in the US? Katie (#21) is right. Not everyone is college material (and as a college teacher, I can attest to this fact). By removing all skilled laborer positions from the US, we are basically telling our citizens that if they can’t get a college education, they don’t deserve a job or the ability to support themselves or their families. I used to believe that anyone could go to college if they just “put their mind to it!” but it’s not true. Several of my current students will never become the college grads they want to be because they lack skills or intelligence. So they are forced to either (a) work 60 hours a week at a minimum wage job (and minimum wage has never been a “living wage”) or (b) give up and go on welfare. At least when you move jobs to Texas, people have the option of following those jobs. When you move them to Mexico, people can’t really move there to get those jobs. I’m not an advocate of unions (I’ve been forced to join a union to get a job before and they never did anything but take my money) but we still need to find a way to keep all levels of jobs here in the US (not all jobs but all levels of jobs) and protect workers’ rights. #21 “So what are non-college educated Americans to do? They used to be able to support a family on a middle-class income by working in a factory…but those days are gone.” Thank you. My point exactly. |
Katie - Obviously not all outsourcing is created equal. But in my experience (dozens and dozens of engagements), there has not been a net loss of jobs, domestically. Let me ask you this — what’s a forklift driver to do if we kill his union job and move the plant to a state like Texas (where the COL is cheaper) and don’t implement a union? Then what? Will he move to Texas, or will he whine and bitch about not having a job in Michigan? I’m a big supporter of certain unions (teachers, firemen, cops). The UAW and the Teamsters give them a bad name. But if you want to save the system, you employ outsourcing. Which may NOT include offshoring. Don’t confuse the two. (My Asia comment was a bit flippant, yes. But the automakers might save money if they didn’t do manufacturing inhouse.) And woodboy is right. Let the unions live, once they become cost-effective. |
But, is the problem the unions? Let’s face it, those CEO’s make a lot of money. The profit doesn’t go to the employees and the car manufacturers have lived high on the hog for a long time. Bill and his co-workers do not belong to a union, but they, from the lowliest detail guy, to the owner depend on GM’s success, to a large extent. These are people who need to feed their families just like anyone else. We don’t have any say about how GM conducts business as far as green cars, etc., we do the best we can to get by every day. Our dealership also relies heavily on used car sales, which is as it should be, but if GM goes down, so do we and Bill, at the age of 61, might have a tough time of it. It’s easy to condemn a huge “company” and not consider the individual. Although, again, I don’t understand why those at the top get paid the most when those at the bottom do most of the work. Even in the dealership, the owners make a bundle and never seem to suffer, while their employees do the majority of the work. It doesn’t make sense to me. I think I sound like a Communist. |
And you know, are you considering minimum wage in your 157% figure? Because that would mean the average employee makes about $21 an hour. What is that, $3200 a month before taxes, insurance, etc. How many of you guys posting here make more than that? It’s not that much money. I’m going Communist, I think the minimum wage should be $20 an hour. |
PPP. Let’s separate offshoring from outsourcing. Outsourcing is basically the practice of paying someone else to do something for you that you don’t want to do yourself. So let me ask this - is there a competitive advantage to the auto industry manufacturing its own cars with the unions? (To answer, you have to factor in cost.) Would Detroit survive if the three of them decided to create some company to handle all of their manufacturing, in a non-union state, and then just paid that company to manufacture the cars at some piece rate? (Again, I’m not talking offshoring, but domestic outsourcing.) |
CEOs make what the market will bear. Yes, it’s obscene. So figure out a way to pass a law that prohibits people from making too much money. Or toughen laws for corporate boards. I’m not unsympathetic to the goal. But I’m not sure how you implement it legally without breaking a whole lot of other things. |
Our dealership also relies heavily on used car sales, which is as it should be, but if GM goes down, so do we and Bill, at the age of 61, might have a tough time of it. It’s easy to condemn a huge “company” and not consider the individual. annegb - The consumers condemned GM a long time ago over price and quality. GM is in the situation they are in because they’ve spent 20 years ignoring the future. For how much longer do they need to be propped up? If there is a market for 5 million new cars a year in the US, people will buy 5 million new cars. Period. It doesn’t matter where they get them from. If GM were to whither away and die, there will *still* be a market for 5 million new cars, that have to be manufactured, sold, washed, maintained, serviced, etc. Foreign automakers are manufacturing cars in the US - I doubt that would change. If GM were to whither away, there would still be a car dealership to employ the same people it employes today. |
#36 annegb “…I don’t understand why those at the top get paid the most when those at the bottom do most of the work.” I understand your feeling here though those at the top usually are paid for a lot more than work. They (usually) take on more responsibilities than a lower-level employee and oversee far more than the smaller “real work” tasks of those beneath them. My husband and I were just joking about his manager’s new “sick time notification” policy. Basically, you can’t send your boss an email or leave a voicemail if you’re going to be out. If you can’t reach your direct supervisor, you must call his/her supervisor continuing up the chain of command until you reach a live human so that someone can let others know you’ll be out. Currently, his direct supervisor and his supervisor’s boss are off site at another location. The next person above them just left the company for unknown reasons which means if my hubby has to call in sick, he has to call a multi-site VP or the President/CEO of the company! Mind you his company employs over 4,300 employees! Not totally relevant but kind of a funny note about company policies… |
By the way, this is the same situation with the airline industry, and I live in an area that is home to TWO major airlines. A large percentage of my stake works in the airline industry. We don’t need to artificially prop up the airline industry. People aren’t going to fly *less* just because AA or SW goes under; they may fly less because of price and service causing AA or SW to go under. If there’s a market, someone will figure out how to serve it and make money at the same time. |
#41 queuno - You said you’re talking about “domestic outsourcing” but you brought up India and Mexico. So I have no problem with domestic outsourcing. If you can find US companies to do your work cheaper, great! Just be sure they aren’t shipping the work overseas. The international outsourcing is what I believe to be detremental to our economy. Regardimg unions: I don’t agree with the clout most unions hold. And I don’t think their choices are always best for the employees who make up those unions, either. Unions have mostly outlived their usefulness in this country. We have laws to protest workers now that weren’t in place when unions were developed. We have minimum wages and limits on the number of hours an employee can work in a day and a week. We have laws about how you can fire people. We have minimum age requirements for jobs. I understand workers want something to bargain with but the bullying of unions usually gets very carried away. Can we say, “Mob Mentality”? |
CEOs make that much money because that is how much the shareholders decide to pay them. It is ridiculous, I agree, but that is what the market supports. >>The profit doesn’t go to the employees Why would it be expected to? The profit goes to the shareholders, those who commit capital and take the risk. Employees are free to become shareholders and share in the profit if they desire. >>What is that, $3200 a month before taxes, insurance, etc. How many of you guys posting here make more than that? That is precisely what I make, with a Ph.D. One can certainly live on it. >>I think the minimum wage should be $20 an hour That would destroy businesses, increase prices, and lead to job losses. |
Katie - while you bring up valid points, I am not sure I agree with you. If your points are valid across industries, then why do employers want to increase the number of H1B visas every year to get more skilled workers? Also why are there still so many technology startups in the US? And as Mark D says, not much the Government can or should do about it. Perhaps it is time for Americans to allow others to improve their standard of living while ours stays stagnant for a time… There was a statistic last year how over HALF of US startups have a foreigner as a founder. HALF. And they aren’t leaving the US to found these companies. My industry both heavily offshores and heavily imports H1Bs. Why? Because there aren’t enough people to do the high-level, high-paying, high-dollar work as it is. So we take the people we *already have* in the US and convert them into high-level, high-paying jobs (where we can — you’d be amazed at how many people have a stupid union mindset and don’t want to improve their skills and make more money) and we send the excess, low-level work overseas for someone to do overnight. We can’t possibly hire any more people in the US than we already try to do — mostly because the employees aren’t there. If you took $25B and used it to retrain forklift drivers, we might not need as many H1Bs. I guarantee it. |
You said you’re talking about “domestic outsourcing” but you brought up India and Mexico. I already agreed to drop that conversation from that subthread because it didn’t have to do with manufacturing. But I have ZERO problem moving the jobs overseas in the right conditions (see my 45). America has always found someone else to do the dirty work, while it focuses on the next big thing. Sometimes, the dirty work is best done offshore. Who cares? Guess what? It doesn’t always work. Look at all the IT companies bringing work back. I’m currently working on an outsourcing contract for a government entity that bars us from sending work offshore. No problem. Here’s the cost to do it here. Oh, looks like we’ll be *hiring* domestically. Now our client can get into the business of having its people do something more productive than what we’re doing for them… I do believe, fervently, tha |
I do believe, fervently, tha Gaack! Meant to say, I do fervently believe that any companies who sends jobs offshore and lays off people to do it should be required to pay for job training. |
Woodboy, what I’m disputing is that GM employees get paid humongous amounts. Yes, you can live on it; but they’re not all going to the Bahamas. I don’t understand all that “minimum wage goes up—economy goes down the drain” rhetoric, but you could be right. I know families who are living on $8 an hour, with a couple of kids. They do it, but could you? It’s outrageous, especially because those who make that kind of money work their tails off cleaning our motel rooms, serving our big macs, etc. I think it’s awful. |
#43: #Unions have mostly outlived their usefulness in this country. We have laws to protest workers now that weren’t in place when unions were developed. We have minimum wages and limits on the number of hours an employee can work in a day and a week.” |
$349 That’s your job description. |
The Big Three can not compete until with take Medical coverage off their books. |
“Our dealership also relies heavily on used car sales” It’s the same as most dealerships. In fact, most new car dealers don’t make much at all on new car sales, their profits come from used cars, service, and F&I. |
“I think the minimum wage should be $20 an hour.” Paying someone $20/hr to make a Big Mac or fold pants at Target would be a little insane. And how would these companies make up for the increaded overhead? Passing the cost onto you and I, the consumer. |
#31 DKL - yes it includes benefits but the numbers are frightening, not unlike the police union construction contracts in MASS wherein any cop here makes over $100,000 a year #32 Bob - sure there is a place for unions, but come on they are destroying the big three - look at the wage differential between them and the foreign automakers… If the drug companies fail, you won’t get anymore drugs… #33 woodboy - agreed #34 PPP - You make good points, but, in reality, that is capitalism and there is, little, if anything, that the Government can do without significant global disruptions. |
#36/37 annegb - the major cost differential for cars is labor between the big 3 and Toyota/Hyundai here in the States and the UAW is the problem. Yes, the CEO makes an enormous amount of money, but $5M or whatever amount they make is irrelevant when you times $120K per UAW member times 100,000 employees… I agree the pain could be severe to many, but the current situation is not sustainable… #39 queuno - agree, cut wages to the CEOs, but the devil is absolutely in the details. 341 - PPP - wow that seems like an inefficient policy, but you are right as to the increasing responsibility. The CEO likely works 24/7 and has no personal life. #42 queuno - pure capitalism. Either we embrace it or we become socialists, but, to your point, we can’t have it both ways. |
#48 annegb you are correct, but as my Mission President said “the less manual labor you do and the more brain labor the more you make.” That is the reality of our economy as brain labor is a more scarce resource right now. Someday it could flip… #49 Bob - you are correct that Unions did a lot of good historically, but is that reason enough for them to live today??? |
@56: I agree, the Unions also have to remake themselves in the modern world. The ideal is the little guy gets a voice in the company as to who gets what and why. |
#47 queuno “I do fervently believe that any companies who sends jobs offshore and lays off people to do it should be required to pay for job training.” How so? Do you mean paying to educate workers who have been laid off in the US? I would agree this is a good policy but it doesn’t account for those who have yet to be employed and still need jobs or those who really aren’t capable of doing much more than what they’re currently doing. Either way… Neither option- hiring completely domestically or international outsourcing- can be actually be put into practice %100. I’m just lean more to the side of “Keep American jobs in America.” I know it’s not truly that simple. |
#54: “you won’t get anymore drugs…”. Walmart will get them for me in China. |
Devyn - Your mediation skills make me chuckle… Perhaps if my presidency had had someone to mediate as carefully for us, I wouldn’t currently be “on parole” from that calling! |
#58 “..sends jobs offshore.” I read somewhere, over a 100,000 “computer workers” come into the U.S.daily, do a job, and “leave” for the day. There may be one in your office right now! |
#59 - Bob - you can take the sawdust/melamine/dog dung filled pills from China. I will take mine from US manufacturers #60 - PPP - thanks - kind of what I do all day for work too… |
#62: Sounds like fewer side effects anyway. I remember like things being said about Japanese electronics, and McDonald hamburgers. You must have an empty house if you are not buying foreign stuff. No Ikea?! |
#62: Devyn, Don’t worry about me. I buy all my Drugs directly from “Frank” (American Gangster). He is known for the high quality control on all his products. |
Companies call for more HB1 visas not because there is a shortage of qualified Americans to do the job but because they can pay foreign workers less than Americans. The idea that there is a dearth of qualified American scientists, engineers, and IT workers is a myth, not born out by any statistics. Even this NYT article, the author of which, favors outsourcing admits as much: Scientists on a program on NPR I heard a few months ago said the same thing. And the unemployment rate of IT workers has been rising since 1997, the opposite of what would happen if there was a tech worker shortage. |
PPP-I a teach at a college too….probably why we see eye to eye on the issue. I just don’t know what some of these kids are going to do when the last of the union manufacturing jobs go kaputz. |
@65 not only can they pay them less, but they can treat them like dirt b/c they have to leave the country if they lose their job. hmmm, work 80 hours a week with no overtime, or lose my job? I guess I’ll put up with my inhuman manager. |
Welcome to Alberta… |
#34 PPP - When you shift those jobs to Mexico, they’re jobs that are no longer available to US workers In the short run that is true, but not in the long run. Shifting jobs to the most productive locations produces benefits for consumers that outweigh the temporary loss to local employees. It is called the law of comparative advantage. Everyone benefits if they work for companies that due to situation, experience, history, etc. specialize in areas where they have the greatest comparative advantage over the competition. If Ford and GM do not have a comparative advantage in car manufacturing, they need radical reorganization. Many of their workers may need to shift to companies that do have such an advantage, retraining if necessary. Propping up a failing company is about as productive as paying people to dig holes in the ground and then fill them back up again. In the long run, we all suffer. |
#69: I agree propping up the failing companies will fail. But I don’t think the more advantaged consumers or new companies will need to be in America. Not all nations pop back. |
“Companies call for more HB1 visas not because there is a shortage of qualified Americans to do the job but because they can pay foreign workers less than Americans. The idea that there is a dearth of qualified American scientists, engineers, and IT workers is a myth, not born out by any statistics.” This is undoubtedly true, at least for scientists. |
#63 Bob - We do buy foreign items, but I think buying food stuff or pharmaceuticals made in China is not smart. I work in the Pharma space and the FDA has halted numerous shipments of drugs from China due to contaminants. I can’t vouch for “Frank” however…. #65 Katie M. - if your statements are true, then why are so many post-doctoral positions going unfilled in the US? #71 woodboy - again not true for post-docs in biological sciences, but true when it comes to academic jobs in the sciences… |
Devyn S- The article I linked to gives some explanation for that. From the NYT: As Daniel S. Greenberg wrote in the Scientist magazine in 2003: “Despite the alarms, no current or impending shortage exists, and never did. Instead, we’re glutted with scientists and engineers in many fields, as numerous job seekers with respectable credentials can attest.” The only “shortage” is of American-born scientists and engineers. But with so many talented foreigners competing for positions here in schools and laboratories, it’s entirely rational for American students to head into fields where their skills are in more demand — and harder to replace with foreign labor. Mr. Greenberg sums up their options nicely: Consider the economic fates of two bright college graduates, Jane and Jill, both 22. Jane excels at a top law school, and after graduation three years later, is wooed and hired by a top law firm at the going rate–$125,000 a year, with a year-end bonus of $25,000 to $50,000. Jill heads down the long trail to a PhD in physics, and after six Spartan years on graduate stipends rising to $20,000 a year, finally gets her degree. Tenure-track jobs appropriate to her rigorous training are scarce, but, more fortunate than her other classmates, she lands a good postdoc appointment–at $35,000 year, without health insurance or professional independence. Three years later, when attorney Jane is raking in $150,000 a year, plus bonuses, Jill is nail-biting over another postdoc appointment, with an unusually ample postdoc recompense of $45,000 per annum. Medicine and business management similarly trump science in earning power. |
#72: If Asia understands they must make better cars, better TVs, better cameras, to sell them in the USA, what will stop them from making better Drugs? I think they understand from watching Americans buying in Canada and Mexico, there is a open market for quality cheap Drugs. Inventing Drugs is hard, making them is not, selling them can’t be stopped. |
Katie - I think you hit it on the head - there are few US born scientists that are sticking. In my class at Harvard Med of 40 PhD students, roughly half were US born. I think maybe 1-2 actually did post-docs, the rest left for consulting, investment banking, patent attorney, etc. So you are absolutely correct. There is a lot of angst now about how the US is paying to train foreign scientists who are taking all of that great training back to their home countries leaving the US holding the bag. For example, China is trying hard to woo US based scientists back to China - that would decimate the US science if a significant number went back… |
>>#71 woodboy - again not true for post-docs in biological sciences, but true when it comes to academic jobs in the sciences… Really? I am a postdoc in the biological sciences. In fact, you and I were in the same graduate program. There are tons of postdocs. The unfilled positions are all in crappy labs, at the NIH (where no one wants to work), or with brand new professors (who are unproven and thus have trouble recruiting). Most good labs turn away a lot of postdoc candidates because they don’t have enough funding or space. My boss in grad school got about 4-5 applications a week–mostly from spammers in China, but lots of legitimate ones too. If you don’t come out of a top program, it can actually be pretty hard to get a decent position. And as a country we produce far more Ph.D.s than the system can absorb, and this, coupled with the disruptions in the labor market from foreign labor, ensures that there are too many postdocs competing for too few jobs. That’s why |