The Cynical Economist

C’mon Mr Keiser! Hundreds Europeans will lose THEIR jobs? The jobs were not theirs. The jobs were “created” by the GM corporation in result of people’s demand for GM’s cars! Why should GM keep the workers now when they do not have use for them? One of the reason GM is broke is exactly those unions. The unions fought so hard and so well for the workers, that maybe the companies couldnt aford them any more…(watch this  sad video). See what happened to Detroit in this video.

I agree wit him, that we shouldn’t have bailed out the charlatans on Wall Street and, that they have turned the NY stock exchange in a Big Casino, but think what would have happened if GM kept those 10 000 workers? The US or the German government, would have been pressured to  give money for a GM/Opel financial bailout(as it already happened inUS), because the company cannot sell cars, but they still have expenses for “doing business” as paying wages and benefits to people they do not need.

And what about the investors? They will lose money too. And if you think – “the hell with them” look at your 401K or pension statement! You probably own a GM stocks as a part of your portfolio…You are investor. As a matter of fact right now every American citizen is an investor in GM because the government bailed them out by purchasing 60 % of the company. Don’t you want to own a company that is making profit? Or you want to loose money, but keep paying sometimes unreasonable wages?

Mr Keiser says, that – “In America do not respect the worker?” But look what Henry Ford did for the worker…Ford astonished the world in 1914 by offering a $5 per day wage, which more than doubled the rate of most of his workers. Using the Consumer Price Index, this was equivalent to $111.10 per day in 2008 dollars or $ 14 per hour. Todays government mandated minimum wage is $7.50…When Ford also started the 40-hour work week and a minimum wage of $5 per day he was criticized by other industrialists and by Wall Street. He proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy….But how the workers repaid him…

Ford was adamantly against labor unions. He explained his views on unions in Chapter 18 of My Life and Work.^[21] He thought they were too heavily influenced by some leaders who, despite their ostensible good motives, would end up doing more harm than good for workers. Most wanted to restrict productivity as a means to foster employment, but Ford saw this as self-defeating because, in his view, productivity was necessary for any economic prosperity to exist.

He believed that productivity gains that obviated certain jobs would nevertheless stimulate the larger economy and thus grow new jobs elsewhere, whether within the same corporation or in others. Ford also believed that union leaders (most particularly Leninist-leaning ones) had a perverse incentive to foment perpetual socio-economic crisis as a way to maintain their own power. Meanwhile, he believed that smart managers had an incentive to do right by their workers, because doing so would actually maximize their own profits. (Ford did acknowledge, however, that many managers were basically too bad at managing to understand this fact.) But Ford believed that eventually, if good managers such as himself could successfully fend off the attacks of misguided people from both left and right (i.e., both socialists and bad-manager reactionaries), the good managers would create a socio-economic system wherein neither bad management nor bad unions could find enough support to continue existing.

To forestall union activity Ford promoted Harry Bennett, a former Navy boxer, to head the Service Department. Bennett employed various intimidation tactics to squash union organizing.^[22] The most famous incident, in 1937, was a bloody brawl between company security men and organizers that became known as The Battle of the Overpass.

In the late 1930s and early 1940s, Edsel (who was president of the company) thought it was necessary for Ford to come to some sort of collective bargaining agreement with the unions, because the violence, work disruptions, and bitter stalemates could not go on forever. But Henry (who still had the final veto in the company on a de facto basis even if not an official one) refused to cooperate. For several years, he kept Bennett in charge of talking to the unions that were trying to organize the Ford company. Sorensen’s memoir^[23] makes clear that Henry’s purpose in putting Bennett in charge was to make sure no agreements were ever reached.

The Ford company was the last Detroit automaker to recognize the United Auto Workers union (UAW). A sit-down strike by the UAW union in April 1941 closed the River Rouge Plant. Sorensen said^[24] a distraught Henry Ford was very close to following through with a threat to break up the company rather than cooperate but that his wife, Clara, told him she would leave him if he destroyed the family business that she wanted to see her son and grandsons lead into the future. Henry complied with his wife’s ultimatum, and Ford went literally overnight from the most stubborn holdout among automakers to the one with the most favorable UAW contract terms. The contract was signed in June 1941.

And the end result after many years of bending over to the unions demands…

Ford United Auto Workers 1946 contract

Ford United Auto Workers 2007 contract (2215 pages)

pictures are from here

Ford almost went under in 2008, but decided not to take bailout money from the government…

Now in 2009 when, Ford Motor Co announced a profit of  nearly $1 Billion, the union thugs are back and demanding more and more from the automaker. Read -The news from Dearborn is sunny, except for the auto maker’s labor relations

Consumer Reports rates the quality of the four-cylinder Ford Fusion higher than the Toyota Camry and Honda Accord, and the Lincoln MKZ higher than its Acura and Lexus counterparts. The Fusion and MKZ are built in a factory without job classifications because it’s in Hermosillo, Mexico, and isn’t represented by the UAW. If Ford targets future expansion in Mexico, the recent contract vote will spell further decline for a union that, like Detroit’s car companies, badly needs cultural change.

The paragraph above illustrates one of the reasons American corporations are exporting jobs overseas…union thugs demanding more for less

Do you get it? Because I have the feeling UAW doesn’t get it at all…and Mr Keiser, I think, you also do not get the whole picture