Unsettled Economy & The Bailout

[matapule]

A Modern Automotive Parable

A Japanese company (Toyota) and an American company (Ford Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people paddling and 1 person steering, while the American team had 7 people steering and 2 people paddling.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were paddling.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the paddling team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people paddling the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the paddlers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices, and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid off one paddler, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated paddler was unable to even finish the race (having no paddles), so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India.

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US.

The last quarter's results:
TOYOTA makes 4 billion in profits while Ford racks up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

(yes, Bob, you can borrow this for your column)

[escondido100]

Re: Unsettled Economy & The Bailout

interesting labor statistics..... Why should we bail out some of the most highly paid workers in the country?

[timkona]

Re: Unsettled Economy & The Bailout

Japanese mfg in America knows the danger of unions. That's why they are not going under.

Unions had their day. And they were good. But the sun has set on that anachronistic concept. Stop clinging to the past.

[Vanguard]

Re: Unsettled Economy & The Bailout

(US) Government reportedly involved in Citi deal

...

[Kalalau]

Re: Unsettled Economy & The Bailout

If it is wrong for auto workers to earn $ 75 an hour, is it right for attorneys to earn $200 an hour? Is it right for American auto executives to earn $17 million a year, and the head of Toyota $1 million a year? How about the $1 billion parting gift to a health insurance company CEO?

America has the highest paid auto workers in the world. It always did. That is never a problem if the product is selling. If the product is not selling thats almost always the executives' doing. Every American made car comes to market incorporating a cost of about $1,200 for health insurance--a cost that is vastly lower in countries with national health care, but America does have to protect that $1 billion insurance company executive, doesn't it? It is so important to protect choice in health care, the choice of insurance companies to drop clients, exclude conditions, just flat out deny payment for covered conditions and wait for the claimant to die.

Why was the country's most prosperous, successful, dominant era when union membership was the highest?

[matapule]

Re: Unsettled Economy & The Bailout

Kalalau, good points one and all and worth pondering. Props!

[escondido100]

Re: Unsettled Economy & The Bailout

there is absolutely nothing wrong with making union wages.....what is interesting is that they are proposing to pay for the bloat on the backs of the average wage earner who makes 25-30 an hour with bennies. doesnt seem right. i charge my time out at 100 per hour but i cant afford health insurance because of other costs associated with my biz and the vagaries of hawaii insurance laws why should i make suire with my taxes that auto workers get to keep theirs?

[Kalalau]

Re: Unsettled Economy & The Bailout

The smaller the pool, the higher the rates.
The larger the pool, the lower the rates. So they say.

Add a few more million auto workers and related workers to the uninsured, no problem. Their costs will just show up someplace else, even as they get sick and die and drop out of the tax base. We can end up being just like what India and China have struggled so mightily to change from being. We can have our cars assembled by child labor at 35 cents an hour, exposed to toxics that kill them before they are old enough to vote--the problem of uninsured workers takes care of itself!

Some how, some way, the health for profit system must be abolished. True, Canada's, France's, England's, Germany's, Japan's, etc health care systems are not perfect but their imperfection is no reason for us to continue to tolerate our failed system. Fewer and fewer people will be able to get health care. Blue Cross now offers Californians bargain health insurance--in Mexico. Medical refugees fleeing America for Mexico! I can imagine people from Hawai'i signing up, too--it could be well worth it to fly to Mexicali or Tijuana for treatment of a covered condition rather than let it fester and kill you in Hawai'i, or pay for it out of pocket. Look into it! Maybe Blue Cross can come up with something like that for our soon to be uninsured auto workers, too, maybe with a Blue Cross Canada program. Its interesting to speculate what the final math will look like--what will the final number of insured people be? And what will their rates be? The smaller the pool, etc. And then, at what point does the cost of the sickness and death of the uninsured collapse the whole system? It will be interesting to find out.

[MyopicJoe]

Re: Unsettled Economy & The Bailout

Haha, China is schooling us now:

http://news.bbc.co.uk/2/hi/business/7766333.stm

[tutusue]

Re: Unsettled Economy & The Bailout

AP study finds $1.6B went to bailed-out bank execs

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

[matapule]

Re: Unsettled Economy & The Bailout

You and I both, Tutu. Where is the oversight?

[timkona]

Re: Unsettled Economy & The Bailout

Why bail them out in the first place? That's the part I don't understand.

If you run your business poorly, then you go out of business. Simple.

Let the banks and the automakers fend for themselves.

[matapule]

Re: Unsettled Economy & The Bailout

Why bail them out in the first place? That's the part I don't understand.

If you run your business poorly, then you go out of business. Simple.

Let the banks and the automakers fend for themselves.

Let me 'splain it to you as Desi said.

It is just not simply the banks or automakers going out of business, it will take down many other businesses (that are well run and well managed) with them. It is the trickle down effect. In fact it could trickle down right to you Tim and you could lose your employment. For example, the automakers are one of the biggest advertisers in the news media. If they go, advertising revenue is lost and advertising jobs are cut. That advertsing employee(s) may have been the one who was purchasing your good or service. Enough of them stop purchasing from you (or your employer) and you, Tim, are now suddenly out of a job.

It is not just the poorly run businesses that will go under, it will take many well run businesses with them that depend on business from those poorly run businesses. We are bailing out the poorly run businesses to keep our economy from going bankrupt. What is needed is better oversight and more regulations on how those bailout funds for those poorly run businesses are spent. Certainly not for corporate jets, lavish retreats, and bonuses for executives.

We are now paying for the lack of regulation fostered by the Bush administration and supported by Democrats Frank and Dodd. There is plenty of blame to go around. Our hope now is that Obama and his administration can fix it. We shall see, the clock is ticking.

By the way, I would like to see Congress cut their salaries and perks by 50% since THEY are part of the problem and another example of a poorly run business!

[timkona]

Re: Unsettled Economy & The Bailout

Trickle Down Economics? I thought that was a bad idea under Reagan.

There are automakers in America who are doing just fine. It's not like ALL automakers are suffering. Some US automakers are building best selling vehicles. There are banks in America doing just fine also.

So if business is suffering, adding more gummint regulation is one way to improve things? You say Congress cannot run themselves, but yet you advocate that they try to run other businesses also.

Cold Kool-Aid, with ice cubes, is my favorite.

[tutusue]

Re: Unsettled Economy & The Bailout

AP IMPACT: Wall Street still flying corporate jets

So why were Wall Street executives spared from the corporate-jet backlash? One reason is that they didn't have to go before Congress to request bailout money, so no one asked how they traveled to Washington.