U.S. Senators and Japanese, German and Korean Automobile Manufacturers
What do the following U.S. Senators have in common?
*Bob Corker , Tennessee
*Richard Shelby, Alabama
*Jim DeMint, South Carolina
*Mitch McConnell, Kentucky
1. They are all Republicans
2. They all have Japanese, German, or Korean auto plants in their states
3. They all (except Kentucky) have “right-to-work” laws.
4. They all detest the United Auto Workers union
And, most importantly and interestingly, they all fiercely oppose the proposed emergency loan to save American automakers Ford, General Motors and Chrysler.
A coincidence? Concerned about American car companies? Anxious about American industry? Worried about American jobs? Troubled about the American economy?
In Salon’s “Meet the GOP’s wrecking crew,” the question is posed “Why did a small group of Southern Republicans turn the auto bailout into a demolition derby?”—and perhaps answered.
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co-worker of mine and I were talking about a “bailout” for the Big Three American auto makers. His stance was similar to the senator from Alabama, Richard Shelby. Shelby asked the Big Three CEOs, “Why should we believe your firms are capable of restructuring now when you weren’t able to do it under more begin conditions?” Now, I am not sure if CNN Money got the quote wrong or if the senator from Alabama continues to be as inarticulate and embarrassing as usual. My friend was also embarrassed. I admit I had been prepared for his right-wing stance. However, after reflection, we quickly determined three members of his immediate family could lose their jobs if the American automakers failed. The problem my friend didn’t understand was that Shelby and the state government had been doling out money to the auto industry for years. But the money was for foreign car makers.
I tried to find a quick and dirty amount of money we had spent attracting foreign carmakers to the United States. If you consider Industry Week’s average incentive of about $100,000.00 per job and multiply it by the Federal Trade Commission’s estimate of 35,000 jobs, you quickly get to about three and a half billion dollars. As an engineer, I usually have to give you a statistically based analysis on how confident I am about the three and a half billion dollars. I won’t do that. However, I bet you a nice bottle of single malt I didn’t include a third of the money we have spent on incentives for foreign car makers.
So, Senator Shelby, if you want use rhetoric to make points with your right-wing free market worshiping constituents, go ahead and be a hypocrite. Remember you helped spend 300 million on one foreign plant in Alabama at a cost of $150,000.00 per job. Spending 35 billion on 240,000 American auto maker jobs totals about $145,000 per job. After all, even my right-wing buddy at the water cooler has decided to give it another look.
POST SCRIPT:
It has been pointed out that the incentive money most of the foreign car manufacturers receive is not a loan. Those monies are grants or gifts. The American carmakers are asking for loans.
Americansilentmajority:
This is one viewpoint –a very valid one–I had not heard of, nor considered. I am sure some “no-mercy-for the automakers proponents” will come up with all kinds of esoteric rationale for letting our vital auto industry fail. As our financial/economic crisis then rapidly snowballs into a real depression and perhaps they themselves, their relatives, their friends stand in the 2009 equivalent of our past soup lines, such high-minded clinical analysis will be of little consolation.
And all the Senators from states with American car manufacturing were for the bailout. Why not a snarky post about how they are all willing to throw away billions of dollars of taxpayer money to payback their crooked union supporters?
AR wrote “And all the Senators from states with American car manufacturing were for the bailout. Why not a snarky post about how they are all willing to throw away billions of dollars of taxpayer money to payback their crooked union supporters?”. Please note the section I put in bold and understand what I mean when I say prove it.
test of DISQUS (which SUCKS!)
Sorry, just an assumption on my part. I mean, really, you and Diogenes can go try and find me an honest union leader. Bet you can't.
Unions once served a vital function, bit that was many decades ago. Now they are just corrupt institutions that rip off their members worse than management did.
Once again, prove it. I am just reading more assumptions with no evidence and right wing talking points about how businessmen are so decent and jobs so easy to find that there is no need for a labor movement.
On October 7, 2008 Christopher Ethington, former president of United Auto Workers Local 2926, was charged in U.S. District Court for the Eastern District of Kentucky with one count of embezzling $15,100 in funds from the Shelbyville union. He subsequently pleaded guilty.
On June 30, 2008 Norman K. Brown, former bargaining committee chairman for Local 2911 of the United Auto Workers, was sentenced in U.S. District Court for the Northern District of Indiana to two years probation, including six months of home detention, for embezzling local funds. He also will have to pay $41,478 in restitution and a $100 special assessment. Brown pleaded guilty in March. The Fort Wayne union represents workers at International Truck and Engine Corporation, makers of Navistar Trucks.
On April 21, 2008 Stephen Priest, former financial secretary of Local 516 of the United Auto Workers, was sentenced in U.S. District Court for the District of Delaware to 24 months in prison, fined $100, and ordered to undergo psychiatric evaluation and treatment for embezzling $97,899.19 from the Middletown-based union. Priest, who already has made restitution, pleaded guilty in December. The sentencing comes after an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.
On December 18, 2008 James Ireland ex-financial secretary for Local 1672 of the United Auto Workers, was indicted in U.S. District Court for the Southern District of Iowa on one count of embezzling union funds in the amount of $3,662.
On October 24, 2007 Willie Haynes, former financial secretary for UAW Local 362, was sentenced in U.S. District Court for the Eastern District of Michigan to one year of probation for willfully making false statements on the union’s annual financial reporting forms during 2001-03. He pleaded guilty in July. In addition to serving probation, Haynes must pay a $2,000 fine and a $25 special assessment. Though he was not charged with embezzlement, he might well have been. He fully repaid by the end of 2004 the $10,201.42 he owed. Local 362 represents workers at the General Motors Powertrain plant in Bay City.
On December 19, 2007 Michael Winchester, former financial secretary for United Auto Workers Local 651, based in Flint, Michigan, was sentenced in federal court to 12 months and one day in prison to be followed by three years of supervised release for embezzling union funds. He also will have to make restitution to a bonding company, Zurich North America, in the amount of $20,401.46 and pay a $100 special assessment. He pleaded guilty in September. The sentencing follows a joint investigation by the Labor Department’s Office of Labor-Management Standards and the Office of Inspector General.
I can keep going………
Shall we list the scandals, lies, frauds, crimes in which U.S. public /government officials have been involved, accused of, indicted for, or setenced for?
Will that make one iota of difference when our country goes into a full-fledged depression because instead of solving problems, people engage in recriminations?
I love this one. It has embezzlement, sexual harassment – you name it.
Plus, if even the Socialists aren't backing your Union, you know you have done something wrong:
World Socialist Website
All German workers in their native countries are represented by unions. Why is it that the foreign companies sucked up to the southern states? If a union workers is killed on the line, would they continue the sales like at Wally World?
The Chain Never Stops
Tell that to the people who work in the meat packing industry.
Workers Assail Night Lock-Ins by Wal-Mart
I am looking forward to a job where I get locked in overnight, and I am sure you are too.
In the same fashion that we have three branches of government whose purpose is to keep each other in check, Unions are there to keep Employers in check, to prevent them from abusing workers and taking advantage of worker's legal and financial vulnerabilities.
Restaurateur Tom Colicchio, Craft Restaurants Violated Federal and State Labor Laws, According to Outten & Golden LLP
As can be seen in the above law suit an employer would never take advantage of their employees and Unions are really unnecessary.
Houston Organization Fighting Ike's Storm of Worker Abuse
There truly is no need for Unions because we all know that G.W. Bush will not be able to go to sleep tonight knowing that such abuses exist and that he will make it a priority for his justice department to find and prosecute those employers who have cheated their workers…
ROTFLMA.
Actually, just one in five German workers is a union member:
The (Parlous) State of German Unions
On the topic of subsides and the Big 3.
Has history been erased?
Do people actually believe that the Big 3 have not been legendary in their extraction of subsidies from all levels of government?
The list is long, so just a few instances.
Poletown:
The facts are straightforward and not in great dispute. The world's largest automobile maker and Detroit's most powerful economic actor, General Motors, wanted to build a new plant and chose a 465 acre neighborhood which included hundreds of homes, 12 churches, 16 schools, 143 small businesses and a hospital as a location for the expansion. In order to obtain the real estate, GM needed the city government to invoke the legal power of eminent domain, a doctrine which allows governmental bodies to take, for a “fair” price, private property for a “public purpose,” traditionally construed to mean such uses as building schools and constructing highways.
In this case, however, the purported public purpose was to be jobs at the GM plant for Detroit residents. Mayor Coleman Young, a former socialist and civil rights activist, fully supported condemning the neighborhood by using the state's new “quick take” law, passed by the state legislature at the request of the city and GM. The “quick take” law permitted the state to take title to private property at once, without having to wait for the judicial resolution of legal challenges. Young organized a package of over $350 million in local, state and federal subsidies as an enticement for GM to locate the new plant within city limits. Negotiations between city hall and GM were initially concealed. When the plans were finally revealed to the public, community opposition arose, stirred in part by Ralph Nader, who sent a support team into the community to help organize resistance to the project. Mayor Young and his staff vilified opponents of the plant, including a local parish priest, Father Joseph Karasiewicz, members of Nader's team and city councilman Ken Cockrel, who tried to promote an alternative site for the plant that would have saved most of the neighborhood from bulldozing.
The cavalier attitude expressed by Mayor Young and by GM President Roger Smith about the destruction of such community institutions as churches was reminiscent of Stalin's wanton razing of Russian churches and the attitude of U.S. policymakers towards Vietnamese villages. (“We had to destroy it, in order to save it.”)
Other powerful institutions were complicit in the community's destruction. The United Auto Workers, the hierarchy of the Catholic church and the local media supported, or refused to actively oppose, the city and GM's actions.
Lacking support from any powerful interest group, Poletown's inhabitants looked to the courts for protection. A local progressive attorney, Ron Reosti, challenged the city's proposed action, but the state Supreme Court upheld the “quick take” law.
GM promised 6400 jobs at this plant. By Dec. 2007 approximately 1000 jobs remained.
Fairfax Assembly, Kansas City:
GM successfully lobbied the city council of Kansas to close a municipal airport and offer the land to GM. Then the race for additional subsidies began in earnest: GM applied for low-interest bonds; the state established an enterprise zone on the airport site, thereby exempting GM from sales, use, property, and ad valorem taxes; and the city agreed to issue $775 million in economic development revenue bonds for the project.
In later years, Kansas City issued an additional $266 million in revenue bonds for the assembly.
Now this was a good investment:
The original program, begun in 1993, aimed to develop affordable cars that got 80 miles to a gallon of gasoline. Vice President Al Gore, its most vocal backer in the Clinton administration, likened the project, known as the Partnership for a New Generation of Vehicles, to the Apollo space program in its technological complexity. In addition to about $1.5 billion in government subsidies, the Big Three automakers — General Motors, Ford Motor and DaimlerChrysler — together spent about $1 billion a year on related technologies.
The carmakers all developed prototype vehicles that got at least 70 miles a gallon, and the project nurtured advances in aerodynamics and lighter composite materials now used in auto manufacturing.
But none of the Big Three came close to commercial production of an 80-mile-a-gallon car. The average fuel economy of cars and trucks for sale in the United States has, meanwhile, steadily dropped, so that this year's fleet — with its growing proportion of sport utility vehicles — gets the worst gas mileage in 21 years, according to the government.
The list goes on and on.
You have Ypsilanti, Michigan which gave GM 1.3 billion in tax abatements only to have GM close the plant and move it to Texas where it received more tax abatements – though Texas was smart enough to include claw-back provisions for their subsidies.
More recently, GM received a 50% tax abatement on property taxes and a 100% tax abatement on equipment through 2033 from Flint Michigan to build the Chevy Volt.
Ford recently received $151 million in state tax incentives from Michigan for plant upgrades.
I am not making a case for or against the present bailout, but let's not pretend that the Big 3 hasn't been subsidized for decades.
What too many people sadly neglect is that parity of the Detroit automaker workers' pay and benefits with that of the vital domestic auto manufacturers (the “transplants”) should have been established _years_ ago, and certainly before the UAW as well as the Detroit Three came to Washington arrogantly and stupidly expecting a bailout (or responding in a similarly arrogant or stupid manner, as in how several lefty cartoons deliberately mis-depicts the bailout situation).
“All German workers in their native countries are represented by unions. Why is it that the foreign companies sucked up to the southern states?”
It made no sense to locate manufacturing in the states with antiquated, stupid union-driven work rules and overpaid work forces. But it did make sense to locate manufacturing here, where if anything it is cheaper than in Germany, which is subject to a militant union that makes the stupid dinosaur UAW seem tame or toothless (I.G. Metall). And the Southern work force does fine work, despite the tales told of some factories that need to issue instructions to workers in the form of pictures rather than words.
Detroit's business and labor model has been obsolete for _decades_. (Why didn't the companies _end_ the money they were hemmorhaging _before_ coming to Washington for a bailout? Don't give us any BS; simply _stop_ it, go to parity in pay and benefits with the modern industry, terminate the pension plans and hand them to PBGC if necessary, and do all that _yesterday_ before even _thinking_ of a bailout. That's how a modern, normal organization would act.) And what about the business climate in places like Michigan and others under the union jack-boot? If people running these states had any brains, they would _already_ have been making these states _cheaper_ and more amenable to business than the South (at one time, they were; the South used to be a Third World country within the USA if you have studied history, which is why the Midwest and even quasi-Midwestern Canada was preferred for business expansion at one time). People here in Michigan and other “Rust Belt” states need to make it extra _attractive_ to new business.
But will they learn? Or will some try instead to make much of the private sector, especially services that won't be subject to relocation, like government, the last substantially unionized part of this country other than dinosaurish Detroit, for which “Card Check” would be the means at hand?
“If a union workers is killed on the line, would they continue the sales like at Wally World?”
I suppose we'll find out one day when Wal-Mart offers $5,000 (actually, leased would be more likely, or on E-Z credit payments) Dongfeng or Chery automobiles, which is something logically we can expect sometime in the next 10-20 years. (The cheap Chinese vehicles, that is; don't know if Wal-Mart and everything else besides government will be unionized or not.)
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