Mitt Romney's Bankrupt Evil Ideas About General Motors and American Workers

The Times ran this greedy republican screed by a management toad and much to my shock a lot of average working class Americans agree with it.

Here is the op-ed and interspersed  are some of my comments and reasons for taking exception to Romney's evil and mean-spirited attack on a the workers of our nation through his attempt to justify union-busting at the worst possible juncture in our history.
New York Times Op-Ed, "Let Detroit Go Bankrupt," By MITT ROMNEY

If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Comment: Scare tactic, Romney has no way of knowing this and big three executives will guarantee the opposite.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
Comment: It is not so easy to do anything drastic and always costs more than gradual. Using suicidal is over the top rhetoric. Turnaround and check are not mutually exclusive.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
Comment: Credentials for his assessment – his love of cars and his father's experience. Last I checked parents' experiences are not genetically transmitted. And gosh – did his father succeed or did he fail? AMC is not around is it?
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
Comment: Management agenda item one – break the unions. Lower wages for all workers. Hey, is that what you want as a working person? I did not think so.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Comment: The whole paragraph is nonsense. Detroit is doing a "remarkable job" and the only problem is the other car "feels like a better product" because lower paid workers made it. Nah. And scare us one more time: "bailout will only delay the inevitable" – the disaster that is.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
Comment: Fire all the managers and bring in Pepsi managers to make cars. Sure if all you want from a manager is to break unions, you need to bring in anyone who can do that.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
Comment: Out-of-context quotation to support the notion that unions just want more money to do less. That's insulting plain and simple. Labor wants a good solid living wage to do a professional job. Workers want security and a sense of pride and ownership in their company. Let's see where Mitt says this.
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
Comment: Profit sharing or stock grants – sounds like he wants to share the company between labor and management. Wow he is progressive, or is he?
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Comment: "Sanity in salary and perks" – another slap in the face of labor. Deliberately confusing corporate management jets with job security and proper benefits and retirement. Nice try Mitt.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Comment: Whoa, the platitudes come tumbling forth like a torrent, now directed at managers. I'm really confused. Whose fault is this mess anyhow – management or labor?
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.
Comment: A sudden shift in direction now – dealers need to be protected from being "crushed."
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
Comment: "Win-win" and "I believe" in "basic research" and "universities" and "research labs" and "rectify" and raise the flag, eat apple pie and honor your mother.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
Comment: No "free pass" for the poor shareholders, many of whom also happen to be the workers.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
Comment: What is the main purpose then? A plan that will "permit the companies to shed excess labor, pension and real estate costs." Screw the workers!
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Comment: "Seal their fate" - pardon me while I go and throw up.This is such a transparent management slanted tirade, I do not see why any hourly worker, any salaried employee in any industry, any manager, any sane and right thinking American would agree that now is the time to break the unions and screw the American worker. It just makes no sense.

Alas I have said before in the blog that I fear the fix is in and that Bush will add to his legacy the demise of General Motors - two big feathers in his cap - the busting of the unions and the murder of the Volt electric car - one reward for the republicans at large and one special gift for the oil companies.


Steve said...

Dear Reb,
I fear you're so busy disliking Romney (an easy thing to do) that you can't hear the sense in what he's saying. I agree with a lot of your critique, but Romney is 100% right that both management and unions are dysfunctional in Detroit. Some of his suggestions make a lot of sense. And both management and unions *need* to experience a very serious kick in the butt in their paychecks.

Both of them (and you too) need to face the fact that Detroit makes inferior cars. Good leadership is entirely lacking, and committed, quality-measured labor is equally scarce. And Romney is right that the fix requires a corporate structure that bridges the divide between management and labor.

No, we can't let the 3 companies collapse, but any bailout must come with serious strings and clearly defined restructuring and product-quality goals.


Andrew said...

Good leadership is entirely lacking, and committed, quality-measured labor is equally scarce. And Romney is right that the fix requires a corporate structure that bridges the divide between management and labor.