Economic update - auto union, bond auction failure, pirating
Any downturn in posting frequency or depth is due directly and almost entirely to a shortage of available time. There is still a steady stream of new and interesting stories out there and I'm just as opinionated now as I've always been :)
We have some prototype hardware that is not acting as we expect it to and I'm trying to integrate new software onto it. It is killing my peace of mind.
Big news this week is anticipated word of a bailout for the "Detroit 3", General Motors, Ford, and Chrysler. The notion proposed by these three and their proponents is that they have had falling sales and risk going bankrupt, and that if the government doesn't fund them with multi-billion dollar loans they will collapse and cost something like 3 million US jobs between them and their suppliers and support economies. When you hear news about "the failing auto industry", that auto industry is mostly these three, and they are all part of the US United Auto Workers union (UAW).
I've never been in a union. I'm what would be considered a "white collar" worker and there are fewer unions for us as opposed to "blue collar" workers. I've dealt with unions. I've known people who have dealt with unions. I have absolutely nothing good to say about unions. I don't hold any animosity towards them, but I think they reduce the efficiency of a system and hinder its ability to compete with other systems. If you let people vote themselves a pay raise don't be surprised when they do it, and don't get angry at them because they are just playing the game by the established rules. At the same time, don't feel sorry for them when their company collapses because they've impeded the necessary industry progress.
Now lets talk about the UAW.
http://www.ft.com/cms/s/0/ac897bf6-b446-11dd-8e35-0000779fd18c.html
The UAW has decided against concessions to help support their failing companies. These concessions would be things like pay cuts and reduction in health care or retirement benefits. In their statement they reason, "We're here not because of what the auto industry has done. We're here because of what has happened to the economy." I happen to disagree. If it were true, Toyota and Honda, etc. would be just as hard hit and just as desperate.
"Do you know how many hourly jobs GM has laid off from 2006 to July 2008? Take a guess. How about 34,000?"
"How many hourly jobs has Toyota’s American production system laid off in the same time frame? Zero. That’s right. ZERO"
http://edgehopper.com/what-toyota-knows-that-gm-doesnt/
Turns out that Toyota invests in educating its staff while there are lulls in production. So what about the GM and the UAW?
"'We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,' he says. 'Otherwise, I've just sat.' Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union."
http://www.detnews.com/2005/autosinsider/0510/17/A01-351179.htm
And did you know that (according to Forbes) the average cost of employing UAW workers is $30-$40 an hour higher than that of a similar worker in a (United States based) Toyota or Honda plant? That is union power at work. Some people have blamed the car models and mindset as a root cause. I've heard it said that Toyota, etc. have not been hit as hard because they make economical cars instead of gas guzzling SUVs and trucks. I've posted earlier about this, and that the Detroit 3 had considered economical cars but canceled the program because the hourly labor costs were too high to compete with Toyota. Again, that takes us back to unions and the UAW in specific.
Oh, and it isn't just Toyota. Honda (as of 2007 at least) hasn't had a layoff in 30 years. But the UAW wants a piece of that pie as well.
http://www.freerepublic.com/focus/f-news/1900220/posts
It is pretty easy to get mad about this sort of thing (as evidenced by the very vocal and angry crowd posting on related news articles), but I'm not. The UAW played their game, they did pretty well, and now their set to be replaced. This is business evolution at work. I think they will get their government bailout (which is depressing to me), but I still think they will fall, and I think they will contribute to the weakening of the government and the economy.
People might say that letting them fail would hurt more than supporting them, but I disagree. After the first one falls I'd bet good money that the UAW would jump at renegotiating their contracts. And even if one (or all) of them fail I don't see the industry disappearing. They will get chopped up, reorganized, and someone with some money and ambition will come in and buy the good parts to start a new, more efficient company. The Dow Jones Industrial Average is a group of thirty companies used to measure the health of the US economy. When a company falls below a certain standard, it is replaced in the index by another. Only 11 of the 30 have been in the index since 1985. Giants fall and are replaced. That is just the way of things. I hope at least two of the "Detroit 3" fail because I don't think we can handle supporting them as well as the financial industry.
Oh, and if that wasn't depressing enough, Citigroup expected to cut 53,000 more jobs, along with an ever growing list of companies posting major layoffs.
And a bond auction failed for the German government. That means they were trying to raise capital but couldn't get enough investors. Something important to think about when you realize that the United States government is trying to raise its capital for all of these bailouts by selling bonds. How long before investors stop buying the American promise and start looking for something better backed? Iran and the Saudi Arabians have been purchasing billions in gold bullion. LOTS of people are moving money towards growth in China.
http://www.ft.com/cms/s/0/9cbf7d56-b1bc-11dd-b97a-0000779fd18c.html?nclick_check=1
On a more upbeat note (*slight sarcasm*), another series of ships have been hijacked by Somali pirates. There was a Japanese ship about a week ago and recently the Saudi Arabian Oil super tanker. Not to mention the cargo ship about a month ago transporting Russian tanks (the kind with guns and armor, not the kind you use to transport liquids). I actually find this particularly humorous because the United Nations ships sent to protect the merchant vessels have been ineffective (I would guess due largely to restrictions on their ability to engage suspects). If the pirates see a warship they run and there isn't much a UN vessel is allowed to do about it. A British Royal Navy vessel engaged some pirates a little while ago but only because the pirates made the mistake of firing on two Royal Navy assault craft. As far as I know, only the French have shown real aggression, sending commandos in to hit the Somali pirates in port and free captured French citizens. I applaud their move. Pirating has become a major industry in a land where life and weapons are cheap and there aren't many other professions to go into.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aB_AZXf5798g&refer=home
I really wish I had more time to write about all these things, but for now these links will need to suffice.
-LNC
We have some prototype hardware that is not acting as we expect it to and I'm trying to integrate new software onto it. It is killing my peace of mind.
Big news this week is anticipated word of a bailout for the "Detroit 3", General Motors, Ford, and Chrysler. The notion proposed by these three and their proponents is that they have had falling sales and risk going bankrupt, and that if the government doesn't fund them with multi-billion dollar loans they will collapse and cost something like 3 million US jobs between them and their suppliers and support economies. When you hear news about "the failing auto industry", that auto industry is mostly these three, and they are all part of the US United Auto Workers union (UAW).
I've never been in a union. I'm what would be considered a "white collar" worker and there are fewer unions for us as opposed to "blue collar" workers. I've dealt with unions. I've known people who have dealt with unions. I have absolutely nothing good to say about unions. I don't hold any animosity towards them, but I think they reduce the efficiency of a system and hinder its ability to compete with other systems. If you let people vote themselves a pay raise don't be surprised when they do it, and don't get angry at them because they are just playing the game by the established rules. At the same time, don't feel sorry for them when their company collapses because they've impeded the necessary industry progress.
Now lets talk about the UAW.
http://www.ft.com/cms/s/0/ac897bf6-b446-11dd-8e35-0000779fd18c.html
The UAW has decided against concessions to help support their failing companies. These concessions would be things like pay cuts and reduction in health care or retirement benefits. In their statement they reason, "We're here not because of what the auto industry has done. We're here because of what has happened to the economy." I happen to disagree. If it were true, Toyota and Honda, etc. would be just as hard hit and just as desperate.
"Do you know how many hourly jobs GM has laid off from 2006 to July 2008? Take a guess. How about 34,000?"
"How many hourly jobs has Toyota’s American production system laid off in the same time frame? Zero. That’s right. ZERO"
http://edgehopper.com/what-toyota-knows-that-gm-doesnt/
Turns out that Toyota invests in educating its staff while there are lulls in production. So what about the GM and the UAW?
"'We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,' he says. 'Otherwise, I've just sat.' Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union."
http://www.detnews.com/2005/autosinsider/0510/17/A01-351179.htm
And did you know that (according to Forbes) the average cost of employing UAW workers is $30-$40 an hour higher than that of a similar worker in a (United States based) Toyota or Honda plant? That is union power at work. Some people have blamed the car models and mindset as a root cause. I've heard it said that Toyota, etc. have not been hit as hard because they make economical cars instead of gas guzzling SUVs and trucks. I've posted earlier about this, and that the Detroit 3 had considered economical cars but canceled the program because the hourly labor costs were too high to compete with Toyota. Again, that takes us back to unions and the UAW in specific.
Oh, and it isn't just Toyota. Honda (as of 2007 at least) hasn't had a layoff in 30 years. But the UAW wants a piece of that pie as well.
http://www.freerepublic.com/focus/f-news/1900220/posts
It is pretty easy to get mad about this sort of thing (as evidenced by the very vocal and angry crowd posting on related news articles), but I'm not. The UAW played their game, they did pretty well, and now their set to be replaced. This is business evolution at work. I think they will get their government bailout (which is depressing to me), but I still think they will fall, and I think they will contribute to the weakening of the government and the economy.
People might say that letting them fail would hurt more than supporting them, but I disagree. After the first one falls I'd bet good money that the UAW would jump at renegotiating their contracts. And even if one (or all) of them fail I don't see the industry disappearing. They will get chopped up, reorganized, and someone with some money and ambition will come in and buy the good parts to start a new, more efficient company. The Dow Jones Industrial Average is a group of thirty companies used to measure the health of the US economy. When a company falls below a certain standard, it is replaced in the index by another. Only 11 of the 30 have been in the index since 1985. Giants fall and are replaced. That is just the way of things. I hope at least two of the "Detroit 3" fail because I don't think we can handle supporting them as well as the financial industry.
Oh, and if that wasn't depressing enough, Citigroup expected to cut 53,000 more jobs, along with an ever growing list of companies posting major layoffs.
And a bond auction failed for the German government. That means they were trying to raise capital but couldn't get enough investors. Something important to think about when you realize that the United States government is trying to raise its capital for all of these bailouts by selling bonds. How long before investors stop buying the American promise and start looking for something better backed? Iran and the Saudi Arabians have been purchasing billions in gold bullion. LOTS of people are moving money towards growth in China.
http://www.ft.com/cms/s/0/9cbf7d56-b1bc-11dd-b97a-0000779fd18c.html?nclick_check=1
On a more upbeat note (*slight sarcasm*), another series of ships have been hijacked by Somali pirates. There was a Japanese ship about a week ago and recently the Saudi Arabian Oil super tanker. Not to mention the cargo ship about a month ago transporting Russian tanks (the kind with guns and armor, not the kind you use to transport liquids). I actually find this particularly humorous because the United Nations ships sent to protect the merchant vessels have been ineffective (I would guess due largely to restrictions on their ability to engage suspects). If the pirates see a warship they run and there isn't much a UN vessel is allowed to do about it. A British Royal Navy vessel engaged some pirates a little while ago but only because the pirates made the mistake of firing on two Royal Navy assault craft. As far as I know, only the French have shown real aggression, sending commandos in to hit the Somali pirates in port and free captured French citizens. I applaud their move. Pirating has become a major industry in a land where life and weapons are cheap and there aren't many other professions to go into.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aB_AZXf5798g&refer=home
I really wish I had more time to write about all these things, but for now these links will need to suffice.
-LNC