Sunday, May 31, 2009

The Power Of Conviction

In a recent post entitled "Obama's Change Can Change Quickly", I pointed out how fickle our dear new president can be. But that's to be expected, he's a politician. Forgive me for forgetting. For eight years we dealt with a president who took a position and stood by it. Whether or not people liked it. That is the power of conviction.

As the poet wrote, you gotta stand for something, or you'll fall for anything. That could be the problem. I understand the presidency is a figurehead position, but it shouldn't be a puppet positionjerked around on the strings of public emotion. It's interesting to see our current, president, stand up at Notre Dame and talk about finding common ground between the pro-life and abortion camps. Especially when, truth be told, this is from a guy who consistently voted an even more militant stancekilling live, breathing babies who survived an abortion, than even other Democratic congressman from the state of Illinois would vote. Sounds like someone on the campaign trail to me. Someone who will say one thing when talking to the crowd in San Francisco, and the complete opposite when talking to the crowd in Iowa. I hope that being a smooth talking liar is not what Americans want from a politician. But I fear.

So here we go again, as our beloved puppet falls for anything, and signs a silly presidential resolution in his first few days, promising to close Guantánamo in a year. Nice. You sure appeased all the people who listened to you on the campaign trail talk about the failed policies of your predecessor, and how wrong it is to detain people without giving them the rights we so dearly cherish. After all, (sarcastically speaking) you needn't be a citizen of the United States to receive the protections of our Constitution. You don't even need to be an illegal alien who manages to have a baby in the United States. You don't even need to be a Colombian drug lord who manages to get arrested in the United States. You don't even need to be in America, you simply need to shoot at an American soldier as he does his job defending freedom overseas. Yes, (sarcastically speaking) that action alone should transport some terrorist from the despot like rule they grew up underinto the utopia of the American Constitution, and defense lawyers. And Obama wants to announce his release of terrorists and other people like that, without ANY PLAN for what to do with them. Maybe we can put them in an American prison. Yay. Good one. Genius. Turns out the Democratic lead congress cant even believe the President, and instead voted not to fund his one year program. Pretty bad when even your friends wont help you out with your bad ideas.

Again and again, Obama's change is changing quickly. Like any good politician, with his thumb in the wind, our puppet reacts to the pulling of the strings. Well at least he does that, at least he's listening. Now all of a sudden it's not a good idea to release pictures the ACLU wants in their witch-hunt of American soldiers doing their best to obtain information from folks who were trying to kill Americans. Obama reverses himself again last week, finally admitting that his policy would cost American soldiers lives. Oh, and now all of a sudden we need a plan of where to put the detainees who, by golly, are trying to kill Americans, and no other country wants to accept. Who would've guessed? Guess it takes more than a little show of signing a presidential directive doesn't it? Oh, and I guess Bush wasn't wrong on the military tribunal thing either. After all the incindiary things Obama said on the campaign trail, he's going to reverse himself, go ahead and do the same damn thing, military tribunals to try folks who attempted to kill American soldiers (as it should be). But will Obama have the grace to apologize for his mistakes and misleading statements?  Well, no. Apologizing is something else Bush did, so it must be bad.   

Dear reader, I guess I live in the real world. In my world, my wife, my family, my employees, and my customers all expect me to say things that I've thought out. Things that make sense. Things that I believe in. They don't expect me to change my mind tomorrow, constantly, on every issue. After all, I only get so many chances to be a father to my daughter. I only get so many chances with my wife before she would lose trust in me. My employees look to me for leadership, and wouldn't respect waffling, vacillating, and thumb in the wind syndrome. And my customers, most of those I only get one shot with.

Our President needs to get off the campaign trail. It's time to shut up and stop the rhetoric.  Less news conferences and more learning about the issues, sir. Charm, charisma and slick speech are not leadership. False flags and red herrings only work for so long. Following the leader as he makes one mistake after another and turns around to "lead" in the opposite direction after all, well, it makes you dizzy.  

Leadership is thinking things through, making a wise decision, and standing by it. Without this, America can fall from her position of moral and economic authority. Our friends, allies and those around the world who look to us as icons, can lose respect. And what happens then?


Wednesday, May 27, 2009

Why You Have to Cut Your Household Budget, and the Government Doesn't.

If you are anything like the average American these days, you are counting your pennies. The average American is taking a pay cut, their working hours have been cut, jobs have been lost. Unemployment is rampant, some counties here in South Carolina are way over the 20% unemployment mark. Foreclosures are up, people are losing their homes, their cars are being repossessed, its not pretty. The stock market tanked, 401k's are decimated, its official, we are in a recession.
So, the average folks, wise beings that they are, are reacting. They are being smart, paying off credit cards, eating out less often, and going without. Americans are buying less expensive clothes, cutting the cable bill to the cheapest service, and canceling yard care expenses. Americans get it, times are tough, its time to spend less, and save more.
Except for our do nothing, Democrat led Congress. While average Americans are taking pay cuts and cutting costs, the Congress voted themselves a pay increase for this year. Nice. I see you guys get it. Oh, and thanks for voting yourselves a significant increase in the amount you are allowed to claim as "expenses". Americans should not only give you a raise, but buy you lunch and limo rides more often. That's awesome. I wish I could vote myself a raise, and a bigger expense report too. Hell, I wanna limo ride too, if Im paying for you to take one.
And Obama? While he is living it up in limos and servants, does he keep it real to the street, and pay tribute to the little guy? Nope. Screw the little guy. While Americans scrimp and save to get by, Obama raises the federal budget from $2 trillion to $3.6 trillion, increasing spending and the deficit hugely. In other words, while most Americans don't have money to shop, Obama goes on a spending spree. While most Americans are desperate to pay of their credit, Obama is running America's credit with foreign governments up. Nice, I see you get it too.
And who gets to pay for this giant spending increase? Why of course, you, the little guy. I wish I could vote myself a nice new credit card and have you pay for it. And pay for it we will.
Why do Obama and his cronies in the Congress do this? Because they were trained to. In all the public service textbooks, only one solution is pointed to, when there is a budget shortfall. The textbooks only list one action when government spending gets higher that what the American taxpayer is providing. And what is that answer? Raise taxes. The textbooks never say to cut spending. So YOU, dear reader, should cut spending when you make less money, in fact you HAVE to. But the government should NEVER cut spending, sarcastically speaking.
So about Obama's plan that he learned, does raising taxes make more money for the government? If history repeats itself (and I hear it does), the answer is no. California raised taxes a few years back, and did that make California more money? No. Instead large numbers of businesses left California, and now California has a $40 billion budget shortfall, because as all these businesses left, all their tax revenue left too. Ditto New Jersey, read up and educate yourself on that one. The same thing happens not just to states, but to federal governments. Enter the exodus of American manufacturers, who can easily set up shop in Mexico, China or Eastern Europe. But I mean hey, if Obama and his henchmen in Congress are trying to drive more American businesses overseas, they have the right plan.
The point is that Obama simply cannot nearly double the federal budget without raising taxes. If you need a car, and you only make enough money, dear reader, to buy a $10k used Honda, you simply cannot go out and buy a $18k used Mercedes. Well you can, but there's a name for that. Foolishness.
And I fear that's we have in our current crop of elected leaders.

Friday, May 8, 2009

How the Unions Screwed the Auto Companies (And Will Continue To)

 In our brave new global manufacturing world, those who travel the globe have an interesting perspective to manufacturing and the costs associated. For instance, warehouses in Mexico, China, India, Hungary and the USA all look remarkably alike. They all use the same yellow forklifts, made by the same company. They all have some form of green and orange painted steel pallet racking, where pallets of automotive parts are stacked all the way to the ceiling. The concrete floors are nearly identical, as are the steel roll up dock doors, and the trucks that are parked as they are unloaded. The folks that are driving the forklifts, and doing the work may look different, but they are much the same, and they do much the same job.

The massive disparity is only seen when you go outside the factory, and you see the houses in which the workers live.

For instance, in Mexico, the government builds housing outside of the maquiladoras (factories) for the workers. In an effort to draw companies to Mexico, modern looking concrete tenements are in place outside of many of the factories, and many folks have cars and some of the trappings of the Western world.  

 Not so in China where few own cars, and most take public transportation to the ghettos of corrugated aluminum housing where they live. Some are lucky enough to have dormitory like housing in the factory where they work.  

In India, many ride bicycles to the huts constructed of mud that they call home.  

In Hungary, the wood from the discarded pallets thrown out of the back of the factory as trash, can be seen in the construction of the houses where the workers live. 

In South Carolina where I live, the average forklift driver wage is in the $9-$12 an hour range. Folks may have older cars, and often live in single wide trailers out in the country.

All these folks do the same job as the union autoworkers. So how do the autoworkers live?

Let's take Randy for an example. He's been with the union 14 years. His aggregate salary is $76 an hour, when all benefits and perks are included. In some cases he's paid overtime after working only five hours in a single day. He lives in a 2500 ft.² brick house, has a summer cottage up north, a nice 23 foot boat, a nice motorcycle and drives an Escalade. In another 16 years, at the age of 48, he will be able to retire with nearly a full income, and full medical and dental benefits at little or no cost to him. Like most of his coworkers who have retired, he is likely to take a job to "supplement" his income. If he is caught being late repeatedly, showing up drunk or high at work, has low production, makes a lot of mistakes, his company cannot fire him. He gets raises regardless of his production or performance,  and if his company goes through hard times  and needs to lay him off, he will likely draw full benefits and wages.  Hard for an automaker to save costs in tough times that way. 

When it comes time for his company to negotiate new wages, he will vociferously fight to retain or even gain more compensation than he already has. He will likely cite Henry Ford as saying that the workers should be able to afford the vehicles they make. No matter if Henry was referring to an Escort rather than an Escalade.

All this, when Randy has a high school diploma, and no more education or ability than the workers doing the same job in other parts of the USA or the world.

Non-US auto companies, and manufacturers of all kinds across the USA, are paying fair wages (aggregate $20-$30 an hour) to folks who are doing the same work as Randy is for $76 an hour. In Mexico the same kind of worker makes four dollars an hour. In China, four dollars a day. And Randy is campaigning and complaining about his $76 an hour.   

In other companies competent managers push for higher productivity and increased pay to incentivize good workers. But the unions do not allow such "nonsense", instead pushing for less production for the same pay, setting limits for production during an full workday and forcing promotions for even low producing workers. In other companies employees buy into productivity, quality products and competition, in the union making it to retirement with as little work as possible is the motive, and your job pays the same if you make a quality product or not, and whether you make a lot of it during your eight hours or not. 

Which brings up the issue of productivity.  Truck drivers to deliver to union auto plants become frustrated by the obtuse regulations that govern how slowly the UAW can do its job.  At most non-union facilities, you pull your truck with him into a loading dock, and a forklift driver will look at your paperwork, quickly and efficiently unload your truck and sign the paperwork. The process should take no longer than an hour, by one person.  

But in the union plant there are hoops to be jumped through to ensure that all sorts of people who don't have anything to do are given a piece of the pie. A truck driver will first have to find the office where the paperwork should be turned in. Usually this paperwork person is on break, so the truck driver has to wait 15 minutes to an hour just to find out what dock they should pull into. When the truck is finally in the dock, a forklift driver may not unload the truck. You see, the dock plate is hydraulic, and is operated by pushing a button. This complex task can only be accomplished by an "engineer" from the electricians union. And guess what, the "engineer" is on break. Another 15 minute to an hour wait while the "engineer" is located, and comes cruising up slowly on his three wheeled bicycle. His work is easily accomplished in 30 seconds, he pushes and holds the green button that lowers the hydraulic dock plate into place. This complex job being done he wheels away to sit in an office and do nothing until someone else needs him.  

Now finally after all this time a forklift driver is allowed to enter the truck. But does this forklift driver move quickly? No, there is no incentive for him to move quickly. The slower he goes the better off for him. I have quite literally seen forklift drivers creep at a slow crawl that enables them to stretch a one hour load into four hours. When asked why, they will honestly answer that they are paid by the hour and there is no point in going faster. Now comes the charade of the "engineer" being summoned to make the 15 minute trip from across the plant to do his thirty second job again. And of course the paperwork person who is required to sign off what the forklift driver unloaded is on break for lunch again. Four to eight hour waits are not unusual for truck drivers delivering to union auto facilities, an infuriating fact for those who are paid by the load, not by the hour, and know that an hour at most is needed.

Extrapolate this small picture of UAW inefficiency on one truckload of materials being delivered, into hundreds of trucks per day.  Or into thousands of vehicles made on assembly lines using this slow unproductive approach by frankly lazy union workers desperate to keep and protect their job rather than to keep their company productive and profitable.  How can I stretch the four hours of work I have, into the eight hours it needs to be so I can keep my job? 

Look, the unions had a good effect on the system 75 years ago when low wages and worker abuse were the norm. No one disputes they were necessary then. There was nothing wrong with Americans leading the way to a prosperous and happy middle class.

So its high time now that they take a look at the reality felt across the rest of the world now.  The UAW workers should understand the incredulity and anger toward the UAW that all the other Americans have across the USA who do the same damn thing for a living. They should understand that there are many Americans who have little or no sympathy for this whining of the union workers who are now being forced to give "concessions" that "lower" them to a new level of employment still far above most American workers. Really, who do these uneducated folks holding $76 an hour day labor jobs that should pay $12 an hour thing they are?

Other companies are slashing workforce, cutting salaries and benefits, and asking workers for more production in an effort to be profitable. But the UAW provides a foolish charade that they are making "concessions". What deep cuts are they taking? That overtime be paid after 40 hours a week on site, like all other Americans. Oh, wow, like, that was really a big one, good job guys. Lets see some serious cuts brought to the table, wage reductions bringing them into line with  what Americans in the rest of the country make, lets see some serious effort at incentivized pay for quality and production. Instead its more complaining about how bad they have it. Well go to India dude, and let me know how that makes you feel to see the same job done, with far better quality control than you have done, for so much less. If you want to make $76 an hour, go to college and make something of yourself. Be real.

In the Obama administrations view, the right thing to do is continue and empower this disastrous UAW model by turning 50% of Chrysler and GM over to the very entity that strangles it. Over the last 15 years, GM and Chrysler have been loaned over $36 Billion of cash by average Americans, and this has subsidized the losses caused by the UAW. Now the Obama administrations view is that all these people should walk away from the cash they put into Chrysler and GM, and just give it to the union workers. What insanity.

Until the UAW brings itself and its pay structure into line with reality, the companies it strangles will continue a slow choking death. Lets hope there is some change....