Posts Tagged 'saddling the next generation'

Saddling the next generation

When talk of bailing out the auto makers started, which seems like eons ago, I was firmly convinced that it was the right thing to do.  Then I talked to other people.  I changed my mind.  Let ’em eat cake, I thought.  Then I talked to other people.  We can’t let them fail, I thought.  Then I talked to other people.  I was confused.  I decided to get some facts.  Surely there must be a logical solution to this quandary.  Good luck.

For starters I decided to concentrate on labor costs.  Everyone else seemed to be.  The politicians and pundits were beating  up on the UAW and insisting that concessions had to be made.  Those greedy workers at GM were making $73 an hour while the Japanese were keeping their employees in a stockade and starving them at $44 an hour.  I wondered “What if those selfish GM workers simply reduced their pay by the difference in wages…cash flow problem solved.”

Being analytical, I wondered “What percentage of total auto costs does labor represent?  How much of a difference would it make if those greedy workers toed the line?”  I remembered that the auto companies are publicly held and have to publish financial reports.  The information I coveted must be readily available.  Google must know.  I began my search.

Lots of information about negotiations between the UAW and the auto companies.  Lots of blogs with charts and graphs.  But not one pretty pie chart that showed the component costs of a car.  We all buy cars.  We all haggle over price with those dimly lit guys at the dealership.  Cost was king.  I was amazed.  Surely Congress must have the information.  I searched the NY Times, the Wall Street Journal, and the Department of Labor.  Nada, zilch, zero.

I watched the PBS Newshour when Gwen Ifill interviewed Ford CEO Alan Mulally.  Impressive guy.  Smiled all the way through the interview.  I understood everything he said.  I thought…a guy like that should be a big corporate president, which he was.  And then Gwen said “I understand from some sources that labor represents only about ten percent of your total costs…is that right?”  Alan smiled again and changed the subject.  I knew right then and there that the answer wasn’t Googleable.

I decided to broaden my scope.  I thought about the sheer size of the bailout.  The Car Guys want about $30 billion give or take a billion.  We gave $700 billion to the banks and I still have to stand in line at the ATM.  We gave AIG $150 billion and and they won’t renew my earthquake insurance.   We gave Citibank $300 billion and didn’t ask how much their VP of Botched Investments makes.  And, even though they canned 52,000 employees they still get to spend $400 million to name the Mets stadium CitiField and drink booze in sky boxes.

Then I took a deep breath.  And thought about Iraq.  Something most of us haven’t focused on for months.  Depending on whose numbers you like, the war has cost nearly $700 billion (not counting 4,000 lives lost at an incalculable cost.)  And it’s still running at about $300 million per day…or nearly as much as we spend at our Ojai coffee shops.  Quite impressive.

And then I read about the President-Elect’s (still sounds good) plan to spend a gazillion dollars on our crumbling infrastructure…roads, bridges, technology and other trinkets.   I was still undecided about the Car Guys $30 billion when a paragraph in the Times article hit me between the eyes…

Mr. Bush and other Republicans have resisted such an approach in part out of concern for the already soaring federal budget deficit, which could easily hit $1 trillion this year. Borrowing hundreds of billions of dollars today to try to fix the economy, they argue, will leave a huge bill for the next generation.

I couldn’t believe it.  Where have they been for the last six years while we squandered money in Iraq…and saddled the next generation?   But I came to my senses.  It’s a new game.  It’s the President-Elect’s plan, not the President-Who-Was plan.  The Deluder-In-Chief is no more.

So that’s how I made the decision to give the Car Guys what they want.  Hey, we better saddle up together before the horse runs off the cliff.



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