Daily Podcast: It Was a Dark and Stormy Night
A couple of years ago, I expected the United Auto Workers (UAW) to sink The Big Three (as they were known at the time). Scanning the situation at bankrupt parts supplier Delphi, I thought the union would strike rather than accept pay cuts and kill Detroit. Either that or Detroit would pay them off, burn all their cash and die. I didn't envision the creation of a $37b UAW slush fund (a.k.a. a health care VEBA) that would "convince" the bosses to surrender their members' future without a fight. But I did note that Delphi's bankruptcy was a bad omen. If GM's own former division couldn't make money building parts for Detroit, what hope for other suppliers? And if the suppliers went under… As today's Chrysler factory shutdown proves, a chain is only as strong as its weakest link. For decades, The Big 2.8 (as they are now) have beaten-down their suppliers. Their constant abuse has turned "partners" into adversaries. It's this relentless pursuit of profit — at the expense of human decency– that's poisoned Detroit's relationship with its paying customers. And now, as Chrysler faces the consequences of their sour supplier relations, the situation proves an adage that informs all my analysis of Detroit's inexorable slide into bankruptcy: as you sow, so shall you reap. Or, if you prefer, payback's a bitch.
Price is about a race to the bottom. When the average Joe goes into a store, like Wal-Mart, is he looking to pay the most or the least? RF lays it right out. This is not news and everyone saw it coming. Those people could have (and should have) started on an exit plan years ago and sold their homes during the drunken mortgage binge. Now the music has stopped and there are no chairs. All this will fall to the rest of us. Elect certain people in November and we will be paying more for this than Katrina.
You are up to 4 listeners? Wow, you are growing your audience exponentially! Keep up the good work. ;=)
One more thing. The stuff all these workers are going through, and are going to go through, is terrible. However, the workers and other people of Michigan voted themselves into this mess by trying to get a free ride for everyone. TINSTAAFL is the single overriding rule that governs the universe. You cannot eliminate risk! The cost of eliminating risk is a slow, but certain failure. They milked the industry and the American people for too long. They tried to legislate their way to free stuff. No one has to go without in this country, but it is not because of government, it is because of charity. You cannot legislate charity or it ceases to be charity. TINSTAAFL! I really wish someone would go up there and get those people to realize that the ride is over! They need to look at eastern europe and do what those people are doing before it is too late. If they wake up soon enough, they can turn the whole thing around. Take power away from the unions, lower taxes, reduce government power, and just watch the money roll back in! Or, keep on the slow boat to a dark and empty state. TINSTAAFL = There is no such thing as a free lunch.
They flipped the governor a few years ago for a socialist that was all in for the UAW. Every problem that came along was to be solved with another tax increase, mostly on business. While every other state enjoyed booming revenue, MI lost ground. It was the only state not to see a bump in real estate prices. Mix in Crime and Crummy weather and you have a recipe for disaster. Good hunting and camping up there, I might pick up a vacation home in Troy as a launching pad for trips into the backwoods. I hear it's great in July.