A city in ruins…

1/4/2010:

Leftists destroying America?

One Hoboken411 reader sent this great YouTube clip in – showcasing how “leftists” have destroyed the “model city” of Detroit – with state intervention as well as union bullying – and how if the government involvement in private industry continues, America is on a dangerous slippery slope.

He adds: “Let’s see what the dopey liberals have to say about this…”

Leave a Reply

37 Comments on "A city in ruins…"

MidnightRacer
Member
Both corporatism and unionism intervene the government’s favoritism and corruption to alter free market capitalism. Charters of incorporation were originally designed to last for and expire at 10 years as per state’s granting of personhood to corporations – if they could show that they served the public good. They were intended to provide a means of raising funds for large projects beyond the ability of an individual, combing many shareholders’ power to advance construction, technology, and other pursuits, but all for the public good in the state in which they were granted such charter. John D. Rockefeller was the first corporatist to contaminate the whole process by telling the states that he would pay a lot of taxes to them if they would eliminate the 10 year expiration of the charters, and allow his corporation to operate in its own interest even if at injury to the public good of that state. This began the government intervention into the markets which served as intrusion and contamination of free market capitalism to not what it truly is, but how it operates when artificial tampering with the system takes place. What people blame capitalism for is not capitalism, but the corruption of government systems to intrude upon it. Add to that the intention of labor unions was to protect individual workers as a group against redistribution of rewards away from the profit producers and towards bloated bureaucracy. But just as Rockefeller did for corporations entanglement with government favoritism, union leaders did with… Read more »
matt_72
Member
No Ken – it is you who oversimplify. The Big 3 made fine cars, but when you toss in the cost of labor and all the FIXED costs of those retirees, Toyota could make a better car for the SAME PRICE. It isn’t that the Tempo was a crappy car, it is that US built cars like that tend to be overpriced b/c fixed costs that have to be built into the price of the car that have nothing to do with actual cost of making the car. I am sure that most folks would have loved to buy a Tempo if they could have gotten it for a few hundred or so less b/c the cost of UAW legacy liabilities wasn’t built into the price. Then everyone would have just thought it was just such a bargain. And let’s not even go into how the Big 3 cut corners to shave costs so they could cover union related costs (don’t want to confuse you too much – you seem to be the type who probably might get confused easily). Hard to make a good product that is comparable to your competitors when you spend more on retiree healthcare/pension per car than you do on steel and your competitor has none of those costs to deal with. And that is exactly the situation the Big 3 was in. BTW – Ford has innovated fine, fine enough that they managed to not file for CH-11, have the top selling vehicle for… Read more »
KenOn10
Member
KenOn10
2.7mm Americans bought a Tempo? Not hardly. Tempo was a mainstay of the rental fleet, augmenting weak sales in order to “beat” the imports. You may make major purchases based solely on price, but most of us give a rat’s backside about quality. We don’t want a car that gets most of its miles on the back of a tow truck. Quality has been improving at the big 3, but still doesn’t match most imports. As for the bailout, I agree it was handled badly by Uncle Sam. But much of the GM debt was bought on the cheap by speculators, and frankly, I’m not to torn up about it. And as for the money the union got, yup, it isn’t fair. But neither was the money dished out to AIG and Citi. Let’s move on. We will see what happens to the Big 3. My guesses are: 1) with or without the unions, they will not prosper. maybe ford will do okay. maybe. 2) without the unions most (if not all) of the decent paying jobs will also be in China. My opinion: America will be the poorer for it. In response to matt_72 who said: No Ken – it is you who oversimplify. The Big 3 made fine cars, but when you toss in the cost of labor and all the FIXED costs of those retirees, Toyota could make a better car for the SAME PRICE. It isn’t that the Tempo was a crappy car, it is that… Read more »
matt_72
Member
GM debt bought on the cheap by speculators? Oh god, another one of those fools. For every person who bought GM debt on the cheap, there was another who lost a fortune b/c it dropped in value. The more you focus on distractions like this, the more you completely miss the boat. BTW – you know why that debt was so cheap? The company was broke. Bonds of troubled companies tend to be “cheap” because broke companies can’t repay all their creditors. Though I would argue GM bonds are rather overvalued and have been since they popped above 20. In response to KenOn10 who said: 2.7mm Americans bought a Tempo? Not hardly. Tempo was a mainstay of the rental fleet, augmenting weak sales in order to “beat” the imports. You may make major purchases based solely on price, but most of us give a rat’s backside about quality. We don’t want a car that gets most of its miles on the back of a tow truck. Quality has been improving at the big 3, but still doesn’t match most imports. As for the bailout, I agree it was handled badly by Uncle Sam. But much of the GM debt was bought on the cheap by speculators, and frankly, I’m not to torn up about it. And as for the money the union got, yup, it isn’t fair. But neither was the money dished out to AIG and Citi. Let’s move on. We will see what happens to the Big 3.… Read more »
Easy-E
Member
Hell, even I think the unions caused a lot of this. A lot meaning roughly half of it. The other half thanks to the idiots who ran the company and chose the car designs to build. GM for decades made an inferior product, their QA was terrible. Even though imports cost a little more, in the long run they lasted longer, performed better and needed less maintenance. Unions aren’t always such a bad thing, but when they get big and bloated like the UAW, it seems it’s then that they go wrong. In response to matt_72 who said: No Ken – it is you who oversimplify. The Big 3 made fine cars, but when you toss in the cost of labor and all the FIXED costs of those retirees, Toyota could make a better car for the SAME PRICE. It isn’t that the Tempo was a crappy car, it is that US built cars like that tend to be overpriced b/c fixed costs that have to be built into the price of the car that have nothing to do with actual cost of making the car. I am sure that most folks would have loved to buy a Tempo if they could have gotten it for a few hundred or so less b/c the cost of UAW legacy liabilities wasn’t built into the price. Then everyone would have just thought it was just such a bargain. And let’s not even go into how the Big 3 cut corners to shave… Read more »
KenOn10
Member
KenOn10

E,

What about corporations that are big and bloated? As I see it, there needs to be a balance between corporations, labor and government. Without the union, who will blow the whistle? Who has the resources to stand up to “the man”?

Just thinking out loud.

In response to Easy-E who said:
Hell, even I think the unions caused a lot of this. A lot meaning roughly half of it. The other half thanks to the idiots who ran the company and chose the car designs to build.

GM for decades made an inferior product, their QA was terrible. Even though imports cost a little more, in the long run they lasted longer, performed better and needed less maintenance.

Unions aren’t always such a bad thing, but when they get big and bloated like the UAW, it seems it’s then that they go wrong.

Easy-E
Member

You don’t need a union to go on strike, to quit and find another job somewhere else if your employer is mistreating you or you want to get paid more or have better benefits.

Unions are antiquated. With the new technology available, it’s easier than ever to prove in court that your employer is up to no good. There are government agencies that are there to help. They once were needed, but now, I feel like they have too much power and artificially inflate the value of what people do.

Of course, I don’t think CEO’s or any executive should be getting paid huge salaries, bonuses and retirement packages regardless of how a company performs over the long term either.

Imagine how much better shape things would be in if all of these people had to rely on the performance of their company over the next 20-30 years as their bonuses and pensions were paid out?

In response to KenOn10 who said:
E,

What about corporations that are big and bloated? As I see it, there needs to be a balance between corporations, labor and government. Without the union, who will blow the whistle? Who has the resources to stand up to “the man”?

Just thinking out loud.

KenOn10
Member
KenOn10

“You don’t need a union to go on strike, to quit and find another job somewhere else if your employer is mistreating you or you want to get paid more or have better benefits.”

Might be true in NY, where there are many other employment choices. People in smaller markets, particularly those people with families don’t have so many choices. I don’t have a lot of faith in government regulators and I’ve read the Grapes of Wrath a couple of times.

In response to Easy-E who said:
You don’t need a union to go on strike, to quit and find another job somewhere else if your employer is mistreating you or you want to get paid more or have better benefits.

Unions are antiquated. With the new technology available, it’s easier than ever to prove in court that your employer is up to no good. There are government agencies that are there to help. They once were needed, but now, I feel like they have too much power and artificially inflate the value of what people do.

Of course, I don’t think CEO’s or any executive should be getting paid huge salaries, bonuses and retirement packages regardless of how a company performs over the long term either.

Imagine how much better shape things would be in if all of these people had to rely on the performance of their company over the next 20-30 years as their bonuses and pensions were paid out?

Easy-E
Member

Welcome to the modern world. It’s pretty much the same story for everyone else, in everyone industry in every part of the world.

If there’s no work, you move to where the work is or you do something else. This should be a familiar theme if you read Grapes of Wrath.

So what happened to Detroit? The jobs all moved away and either people moved to where they are or they did something else.

In response to KenOn10 who said:
“You don’t need a union to go on strike, to quit and find another job somewhere else if your employer is mistreating you or you want to get paid more or have better benefits.”

Might be true in NY, where there are many other employment choices. People in smaller markets, particularly those people with families don’t have so many choices. I don’t have a lot of faith in government regulators and I’ve read the Grapes of Wrath a couple of times.

KenOn10
Member
KenOn10

I’m also familiar with the other familiar theme in the Grapes of Wrath – desperate people working for a sub-starvation wage. Thank god the corporate balance sheet is cleaned up… wouldn’t want my CEO, the board and all 62 vice presidents to miss their $3,000,000 bonuses.

In response to Easy-E who said:
Welcome to the modern world. It’s pretty much the same story for everyone else, in everyone industry in every part of the world.

If there’s no work, you move to where the work is or you do something else. This should be a familiar theme if you read Grapes of Wrath.

So what happened to Detroit? The jobs all moved away and either people moved to where they are or they did something else.

matt_72
Member
Let me guess – you are another IT guy who has never read a 10K or 10Q in your life. I am not a management guy, I am a finance guy. I actually cover companies like the ones that have and have not filed for bankruptcy. I have actually read those bankruptcy filings. I have actually met w/ some of these management teams (and that of competitors). I have walked around on the shop floor of some of these factories. And I can tell you with absolute certainty that everyone, even the unions and the US Gvmnt agree that the UNIONS & their union contract bankrupted Chrysler, GM, Delphi, Visteon & dozens of others. The only people who disagree even the slightest is the union and they only disagree in the context that they think that despite the fact that they bankrupted these companies, they should still be paid in full what they feel they are owed (at the expense of all other creditors). But even they know it is their pay & benefits that bankupted those companies. They know it is the cost of labor that made Big 3 cars too expensive relative to transplants for US consumers that led to the massive loss of market share by the Big 3. That is why in the last couple years the unions gave up the jobs bank, transitioned to a VEBA, agreed to a 2 tiered wage structure for new hires, agreed to allow further outsourcing of jobs, agreed plant… Read more »
KenOn10
Member
KenOn10
So now the UAW is the evil empire again? All this flip-flopping is making me dizzy. “…it is the cost of labor that made Big 3 cars too expensive relative to transplants for US consumers that led to the massive loss of market share by the Big 3.” Oversimplification. The Big 3 also lost market share because the vast majority of their products are crappy. Did you ever drive a Ford Tempo or look at the ratings in Consumer Reports? Is this not part of analyzing the auto sector? Your argument suggests that if only the Big 3 could sell their crappy products for X% less, everything would be okay. How about designing a better car? How about some innovation? Furthermore, Big 3 management signed off on every single UAW contract for the cost of labor. If that drove them bankrupt then Big 3 management sucks, too, despite paying themselves very well and apparently producing a hell of a 10K. Keep bashing the UAW (they deserve it)… but you are giving management a free pass to continue their culture of something for nothing at the expense of the shareholder. Kind of like welfare, you know? In response to matt_72 who said: Let me guess – you are another IT guy who has never read a 10K or 10Q in your life. I am not a management guy, I am a finance guy. I actually cover companies like the ones that have and have not filed for bankruptcy. I have actually… Read more »
KenOn10
Member
KenOn10

You seem to think the UAW pushed the big 3 to offshore their jobs. That is so rich! Without the UAW every one of those jobs would have gone out of the US decades ago.

I’m not saying the UAW is blameless, just that they are not SOLELY to blame. Why excuse the executives for a litany of failures? Rick Wagoner’s salary jumped from $9.57 million in 06 to $15.7 million in ’07. Can you seriously call that merit-based? It was hardly the hey-day of GM… but there was Rick, making hay. Kind of like Harvey Hospital. Whatever.

matt_72
Member
Ken, if you were right then Toyota & all the other non-US companies that have built factories in this country never would have built their factories here. They never would have brought all their suppliers with them and had them build entire complexes of factories to supply those auto plants. Plenty of companies have moved their production TO the US and built NON-UNION plants to supply the US market with millions of cars. The only companies losing auto related jobs in a wholesale manner in this country are UNIONIZED. Trust me, you are dead wrong. Even GM, Chrysler, Ford, Visteon, Delphi, Dura, JCI, TRW, etc….. disagree with you. Even the UAW disagrees with you. And you know why you are wrong? Between lead times, shipping costs, JIT inventory & other factors, it makes next to no sense for any company to move most auto production outside the US. Only a few types of parts like wire harnesses are almost universally made outside of the US. But the car itself, the engine, the interiors, the seats, the frame, axle, in fact most of the car is almost entirely made in the US no matter who makes the car. No, those jobs never were all going to leave. Even most of the transplants make the majority of their cars in the US (google it if you don’t believe me). Some of the cars with the highest level of US content are made by Toyota & Honda. Those UAW jobs only disappeared b/c… Read more »
KenOn10
Member
KenOn10
#24 “..I never said the unions were solely to blame – just mostly to blame… “. Huh? Did I misread #4? “… you don’t get that the entire reason Detroit is in decline is that the unions have crippled the US Auto Industry…” Also, “…their bankruptcy petitions …cite the union contracts … as one of the main reason they filed for bankruptcy” Surprise, surprise. Were you expecting executive management to man up and take any shred of responsibility? The buck stops far away from my well-deserved Learjet! In response to matt_72 who said: Ken, if you were right then Toyota & all the other non-US companies that have built factories in this country never would have built their factories here. They never would have brought all their suppliers with them and had them build entire complexes of factories to supply those auto plants. Plenty of companies have moved their production TO the US and built NON-UNION plants to supply the US market with millions of cars. The only companies losing auto related jobs in a wholesale manner in this country are UNIONIZED. Trust me, you are dead wrong. Even GM, Chrysler, Ford, Visteon, Delphi, Dura, JCI, TRW, etc….. disagree with you. Even the UAW disagrees with you. And you know why you are wrong? Between lead times, shipping costs, JIT inventory & other factors, it makes next to no sense for any company to move most auto production outside the US. Only a few types of parts like wire harnesses… Read more »
oceanbloo
Member
oceanbloo

I agree totally with this. It is not just the unions, not by a long shot.

Was it the union’s fault that I when I was looking to buy a domestic car, the only options for me were SUVs or fuddy-duddy sedans? There was nothing in the line-up to suit my demographic, so I had to (very reluctantly) buy foreign (not Japanese). It’s not the union’s fault that the Big 2 or 3 or whatever couldn’t come up with a product that people wanted to buy.

In response to KenOn10 who said:
You seem to think the UAW pushed the big 3 to offshore their jobs. That is so rich! Without the UAW every one of those jobs would have gone out of the US decades ago.

I’m not saying the UAW is blameless, just that they are not SOLELY to blame. Why excuse the executives for a litany of failures? Rick Wagoner’s salary jumped from $9.57 million in 06 to $15.7 million in ’07. Can you seriously call that merit-based? It was hardly the hey-day of GM… but there was Rick, making hay. Kind of like Harvey Hospital. Whatever.

KenOn10
Member
KenOn10

Unions are a convenient whipping boy.

Big 3 management signed off on those unsupportable contracts, too. No protests from the “independent” board of directors, either. Neither group wanted to jeopardize their bloated paychecks. Strangely, they escape any blame for the failure of the companies they “led” and for Detroit.

A day doesn’t go by without news of another CEO enriching himself while the company founders. Check out the Fortune article about Chesepeake Energy CEO McLendon. Payment based on merit is a great idea if implemented from the top down, with no exceptions.

matt_72
Member
You whip out the convenient whipping boy of the overpaid CEO but how much in cash does an overpaid CEO get compared to the rest of the work force? And how much in tax dollars went to management vs. the UAW? Did the US Gvmnt prop up the pension plans of any CEOs over at the Big 3? I think not. If you were to add up the cash pay of all the top execs over at the Big 3 over the entire history of the US Auto Industry, it still wouldn’t come close to the tens of billions we spent bailing out the very union that bankrupted the US Auto Industry (and yes – I mean the industry – almost every heavily unionized company in the auto sector has either gone belly up over the last decade or shut down most of their UAW factories and moved them outside of the US or to right to work states). Even the ones that filed for bankruptcy said, “screw it, we are moving our plants to Mexico” because we are fed up w/ the UAW. (by the way – you really can’t even talk about Ford – they didn’t take a penny, so stop saying Big 3 when it is only 2 who took the money – Ford also moved some of their production to Mexico and has threatened to move much more there) Anyway, as to management, I don’t call getting fired, having your stock, wiped out and having many… Read more »
wpDiscuz