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Businesses can't put employees before profits

posted 20 years ago by dwight_b
45 replies | jump to latest

It's very simple: if companies overpay employees to do what can be done cheaper, then the competition will do it cheaper and put you out of business. I know it sounds cruel because it ignores the 'human' aspect, but it's an undeniable business truth.

The company's point of view:
In this case, if GM continued to overpay for union/Michigan labor (which is more expensive than exporting the jobs and poorer quality than automation) then GM would go out of business and America would lose a LOT more than the 30,000 jobs in Flint. As the vilified GM executive explains in his interview in 'Roger & Me', the business of GM is to make money (and survive) not to be nice. Obviously there is no point in going to extremes here; a happy employee is a more effective worker (hopefully), so businesses should be naturally inclined to take care of their workers. But when union wages force companies to be FAR less profitable, the company has no choice but to export jobs or replace them with automation to be more profitable or stay in business. One could claim that the company could accept being less profitable in order to save jobs and help people. Although this is true, it hinders some of the natural and necessary evolution of the company. If GM can't learn to be more slim and run more efficiently and save up profits for a rainy day when the economy gets tough they would easily be put out of business. You could even argue that GM resisted this evolution for a long time and should've gotten rid of these employees in the late 70s and early 80s to be competitive with the Japanese auto manufacturers. They were nice to the employees and kept them around ten years longer than they should've- finally they were losing the war and had to lay all these people off as a last resort.

The shareholders point of view:
As a stockholder in GM one should expect the company to do everything it can to maximize profits, after all the shareholder essentially loaned them money when they bought the stock, GM owes it to them to make money. If GM refuses to be more profitable the stockholders can just sell their shares and buy stock in a better company (Ford, Toyota, etc.). This essentially loans more money to a company that knows how to work efficiently (by not overpaying for labor) and makes them even more capable of putting a company like GM out of business. What does this lead to... you guessed it, the unemployment of Flint and all GM employees. So in order to please the shareholders and stay in business, GM was forced to evolve and become more efficient, this meant that people lost their jobs, but look its better for 30,000 to lose jobs that hundreds of thousands.

The workers point of view:
As a worker we all should maximize our value. This means that we should get an education, gain skills, or do whatever it takes to make ourselves valuable. When a union steps in and allows people that generally have no skills to get paid as much as those that have skills, there is an imbalance in the labor market. What this means is that someone else is willing to do that same job for far less money (whether that someone else is in another country is irrelevant these days). These imbalances eventually become regulated by competition. A competing company will find a way to use the non union labor, lowering the price of their product and putting the union company out of business. This is happening today between supermarkets and Wal-Mart or Costco. Because supermarkets are paying for unskilled union labor to pack bags and run cash register for $15 - $30 an hour Costco and Wal-Mart have decided to move into those areas and pay far less and then charge customers less. Obviously the customers want to pay less and go to the Costco and Wal-Mart and put the union stores out of business.
As for the employees in Flint; they should have gone to college, picked up skills or asked for lower wages. Instead they put all their eggs in one basket and paid the price.

The consumers point of view:
As a consumer you want to buy the best product for the least amount of money. This is naturally going to push you away from GM in the 1980s. If you want to make a statement for the poor workers of Flint, go out and pay extra for a piece of junk car... I don't honestly expect you to do it and therefore you are just as responsible for the lost jobs.

My point of view:
I feel worse for the rabbits than I do for the people. People have the ability to think for themselves, to do research and realize that taking the 'easy way out' and getting a high-paying job low-skilled job is probably not going to work out in the long run. Rabbits don't have the luxury analysis and foresight; in this case they suffer because of the ignorance of people that should've known better.

[–] OCOKA 20 years ago

In other words, to summarize dwightb, "everyone gets what they deserve".

[–] frojavigdis 20 years ago

I'm just going to re-post what I replied to another similar comment.

After having worked with the auto industry in Germany for three years, I can tell you that there are other ways to run an auto industry that *can* compete with Japan and other country's cost-saving advantages of dumping and other practices. German workers in the automotive industry, from development to assembly line, receive far more benefits than their U.S. counterparts, costing the company much more money but somehow "magically" providing a better product while still making good profit. All this, while having to comply with even stricter, more costly environmental regulations than U.S. companies have. GM set itself up for failure, as many American companies do, by looking at profit-making in the short-term and screwing over their workers while doing so.

Americans workers need to stand up for their rights and get better benefits so that we can slowly see a turnaround in both economics and in the quality of life for the middle class.

[–] dwight_b 20 years ago

It's difficult to equate the German car market to the American car market since the price-points are completely different. With the average German manufactured car selling for triple the price of the average American car it's much easier to pay workers better wages with better benefits. Since most GM vehicles are 'low price-point' they need to find a way to pump out a large quantity of cars at cheap prices. I gaurantee that the low price-point German cars are not manufactured in Germany by high paid labor. I visited China last summer and in the Mainland all of the Taxi's were VW Jetta's (or a similar VW model). In Mexico the VW beetle was the most prevalent taxi for decades. These cars were not made by high-paid German laborers, but by factories in these third world countries where cheap labor can be used to manufacture the 'low price point' German cars. In this sense the Germans are doing the same thing GM did... farm out the low profit cars to low wage workers. It's entirely possible that Corvettes and Cadillacs (not GM) are made by high wage workers who add better quality to a vehicle and the costs can be re-couped with the higher selling point of the cars. But you can't do the same thing with a Geo Metro or a Ford Escort or with a VW Beetle or Jetta.

If American workers want to stand up for their rights to get better benefits they need to make themselves into a resource. If they have no special skills and have a job that anyone else can do, they don't have much bargaining power (as was the case with the workers in Flint, MI). If I owned my own company and my employees demanded more money than they were worth, I would replace them. It's not greed it's a part of business evolution, if I don't do it my competitor will, and I'll be out of business. One could make the argument that a happy worker (well paid and with benefits) is a more productive worker... but a laborer in Mexico is going to be a hell of a lot happier and more productive making $2.00 an hour (and thats probably a high guess) than an American worker making $25.00 an hour with benefits. Laborers in third world countries accept low wages because they know they can be easily replaced and therefore appreciate any work they can get. Why can't unskilled workers in the U.S. accept this.

[–] rokbom 20 years ago

Looks like frojavigdis got owned.

[–] frojavigdis 19 years ago

No, I didn't. He's talking about VW, which I know nothing about. I worked for Audi, and their primary factory is in GERMANY. I even knew several assembly line workers.

So, no, I'm not "owned."

[–] [email protected] 20 years ago

There's a whole load of nonsense throughout this discussion, and I'd like to refute it for those willing to listen.

Firstly, the race to cut expenses is only a facet of textbook capitalist economics. By that I mean where lively competition causes sellers to reduce costs in order to draw the consumer market toward one business and away from its competitors. Ideally, the sellers make demands to lower costs on the suppliers who pressure producers and the cost goes down. That is part of the basic guideline for the plan of capitalism. But, under a different economic system that could be eliminated. ("From each according to ability, to each according to needs"...)

However, there are real-world interruptions to this model, and not just the monopolies and price-fixing agreements that capitalists seek to achieve. Subsidy from public funds (tax breaks, grants, loans), destruction of resources, (rotting crops, dumping milk, production slowdowns) - these things are not in the capitalist outline. And it would be a difficult assertion to prove that they have aided the general public in the last fifty years. Then there's the stock market, which can cripple nations though only a fraction of the population is involved in it, and not all can benefit from it.

But, even with the innate flaws and actual un-capitalist assistance, the system could still operate more humanely. Because the press to cut corners need not be at the bottom-end. When the Congress wants to decrease its budget, they spend less on social services, but they don't excise the military expenditures (for better or, I'd say, worse), and they definitely don't lower their salaries. Similarly, CEOs don't take home $2 million less that year, they fire 2,000 workers. The argument that the necessary cut is at that end is extremely weak, but a marvelous success of corporate propaganda.

Finally, look at the consequence of our capitalist market: "...GM vehicles... need to find a way to pump out a large quantity of cars at cheap prices." That's a great summation of the principle which is the problem. The capitalist, consumer-based economy that we have relies on the masses buying more and more *things*. And, honestly, most of the things are junk, mere burdens to our lives. I'm not saying "We don't need DVDs, they shouldn't be made"; I don't suggest we manufacture and consume only bare necessities. But there is undeniably a tremendous amount of garbage created (and heavily marketed) for our consumption, not because it will benefit us, but because it will thicken the wallet for some small handful of men. (For example, the "Eternal Sunshine of the Spotless Mind" 2-DVD Special Edition being announced for later release fifteen days after the 1-DVD regular edition had arrived at retailers.)
Moreover, much of the products being sold to us are destructive to our health and, more importantly, our environment.

The primary reason for workers getting low wages is not the lack of the workers' skills or intelligence, or the competition from other producers/sellers, no. It is, unfortunately, simple, ugly GREED.

Because it takes imagination to envision the better kind of world we might inhabit, one should not acquiesce to delusions about the benevolence of our ruling elite.

[–] toadums 19 years ago

It's entirely possible that Corvettes and Cadillacs (not GM) are made by high wage workers who add better quality to a vehicle and the costs can be re-couped with the higher selling point of the cars. But you can't do the same thing with a Geo Metro or a Ford Escort---

I am a former auto worker in Michigan. And first of all, gm makes the cadillac!!GM makes the corvette!!

The plant works like a system where, this part for this car goes through the line for this many hours out of the day, and then it goes to another model.

all parts are made by the average employee. there are no higher ups working on the line. my dad still works at the plant. he troubleshoots problems with steering columns and his own model is in the corvette (99+)
he has his own little work area, or office.
the average pay, in Michigan, was 16 an hour. not 25. the supers would get that much. and there arent that many of them. as compared to the line workers.

If American workers want to stand up for their rights to get better benefits they need to make themselves into a resource. If they have no special skills and have a job that anyone else can do, they don't have much bargaining power (as was the case with the workers in Flint, MI). ---

There are no skills needed for making car parts. none at all. it was my first job in fact, right after i grauated high school, for 5 months, until i got laid off. and was the case with everyone 20 years ago. everyone went to gm for jobs rather than go to college.

the workers in Flint had no choice. The company was SHUT DOWN. no more jobs. they could have protested and did whatever else they wanted to do, but it was a choice made by the company so that they could make more money. Now Flint is a poor almost filing for bankruptcy run down town. Believe me, i've been there many times. I didnt live far from flint at all.

Its sad, but it just goes to show how dependant a town is on its main employer. and what can happen when that stable income is uprooted and taken away, what it can do to a town. thats the point that rodger and me was getting at. it wasnt a hard choice for gm to do, it was all for the money. i hate to bash gm when half my family still works there. and it was what provided for my family growing up.

[–] soad_kat_buddy 19 years ago

GM makes Cadillacs; what's your point? Cadillacs are TERRIBLE vehicles that break down minutes after the warrenty expires. GM sucks; they make terrible cars. What's your point? You're the enthusiastic former auto worker, tell me what that has to do with the bad decisions made by GM? Baka baka baka!

[–] everett3 19 years ago

yeah, you're right, every single cadillac is terrible, all of them break down after their warranties end, in fact they each contain a computer that can detect the warranty ending either due to time passed or due to the owner voiding it, and as soon as the warranty does end the car completely fails, usually by explosion.

thank you for exposing this secret.

[–] superdaveiii 20 years ago

Who the hell gets $15-30 an hour to run a cash counter at Wal-Mart?

[–] SERVOMOORE 20 years ago

There's a big hole in this logic system:

These autoworkers are necessary customers for other businesses, some of which inevitably have employees or managers that are necessary to continue the sale of GM vehicles. Put these workers in a position where they have to rely on welfare, and you cause damage that eventually makes its way back to GM management, even as Roger Smith gives himself two million dollar raises.

The situation in Flint, MI only got worse during the Clinton years, and Flint does not exist in a vacuum.

[–] fiddlejock 20 years ago

I agree. This flawed and one-dimentional logic is the same backwards method of thinking that led Washington to believe that 2 tests are sufficient to assess a school. As an educator, I know that how a student scores on a reading and math test is not necessary indicative of his or her success in the educational system, much less the success of the system as a whole. I'm also glad I work in a school district that believes in a more holistic approach to education, integrating the arts and personalized eduction plans to cater to individual student needs.
Likewise, a growing number of companies are developing a more pragmatic and long-term approach to their business practices. Seeing that they are dependent on their work force, they are operating under the belief that they do owe something to those that make their profits possible, with positive results. The antiquated concept of profit at any cost, as well as the old adage about the customer always being right is being tossed out in favor of employee rights and benefits. Companies are finding that keeping the work force happy keeps the work force from leaving, lowering training costs and increasing productivity, and it is paying off handsomely.
GM would not have gone out of business had it kept its plants in Flint rather than moving to a country with cheaper labor forces. That was an idea to increase profit margins in the short term, but in the long term most likely hurt GM's image, as well as its profits.

[–] dwight_b 19 years ago

Its nice to see that my post stimulated some discussion.

I agree with those of you who present problems with a completely free market capitalism, I never say that unchecked business is the best system. However, what I do advocate is that businesses focus on profits and the government or consumers keep them in check. There is nothing wrong with a business having a conscience, but they must never forget that their primary function is to survive. In addition as a public company their responsibility to the shareholders is to make a profit (hence, the name of my post Businesses can't put employees before profits).

Here are some responses to the comments above:

To veggieguy: My intent is not to acquiesce to the delusions of the ruling elite. I believe that it's very easy to point fingers at GM and say they are evil and thoughtless for causing people to lose their jobs. These days I think the vast majority of Americans consider themselves watchdogs and want to keep the corporate machine in check. I think it's time people stop finding some external power that they can point at to blame their problems on and start thinking about how they can improve themselves. In the case of Flint a lot of people put their eggs in one basket and learned a lesson the hard way. I agree that ultimately GREED is what caused these people to lose their jobs... but by ultimate I mean the GREED of the consumer who wants a bargain (demand is the ultimate step in the process when there are ample suppliers). Try selling a car with the line "Yeah its a piece of junk, but by buying this you will keep someone employed." I am a greedy consumer and I think most of us are. In addition if GM doesn't get greedy, then one of its competitors will and the money will go to them. The American economy is propelled by greed. Once companies stop being greedy American money will just go to the greediest country.
I love your argument about the artificial demand for 'stuff'. I agree that corporations use advertising and our natural desire to have comforts as a way to make us more materialistic, so lets think about what the real 'needs' are. Food, water, shelter and procreation. If we get back to the basics we could eliminate so many industries: computers, entertainment, furniture, aerospace, higher education, medicine, financial companies, (insert where both you and I work) etc. In fact, since a very small percentage of the U.S. economy is food and shelter you could get rid of most businesses. The side effect: a whole lot of people would be out of jobs, including the people of Flint, Michigan who make an artificially demanded item. The desire for 'stuff' and a better lifestyle has driven our economy for years; eliminate that need and 95% of the country would be out of a job.

Toadums: Its nice to get feedback from someone that actually works for GM. I am not surprised that the Corvette and Cadillac are made at the plants where the less expensive cars are made. My point was that since these cars are more expensive GM could manufacture them with higher paid labor and recoup the costs. My opinion is that they could even use this as a marketting tool by advertising that only the most experienced or 'high quality' employees work on these cars. Porsche, for example, manufactures the 'low end' Boxster in Finland and the more expensive cars at their own plant in Stuttgart. Since company image is important on luxury items like these how and where they are manufactured can mean more to the buyers. I agree that it's sad when people lose their jobs, but these things must happen when manufacturing trends change and the economy must evolve. Take a look back at the automobile market during the late '70s and early '80s and you can see how the Japanese cars forced the entire industry to evolve. I don't blame all of this on America's floundering ability as a manufacturing country, alot of blame lies with the management for not seeing the changing trends in advance and failing to prepare for them.

superDaveIII: I think you missed my point. Nobody at wal-mart makes $30 an hour for running the cash register and that is PART of why they are so profitable.

ServoMoore: The interdependence of the management and the employees and the money in our economy and internationally is a very complex economic issue. An intelligent discussion in this arena requires a knowledge of the trade defecit and generally a depth of economic academics that I don't possess.

To Fiddlejock: I fail to see the analogy between my logic and the placement tests in schools.
You are right that some companies operate under the axiom that a happy employee makes a better product, but this will only go so far. In addition the Mexican that gets a job for GM is a VERY happy worker. As for image... when MOST Americans buy products they buy to save money, I see many Americans shopping with a coupon book and not with a list of which companies have a favorable reputation. Obviously there are cases, like Nike trying to lose the 'sweat shop' image, but image seems to matter most on luxury items (where the image is alot of the reason for buying it) and alot less on low price items (this was part of my point with Porsche vs. Geo).

Thanks to all of you (whether you agree with my post or not) for at least applying some analysis to this movie. The reason I started this post was becuase I read the reviews on IMDB and witnessed the droves of Michael Moore cronies that agreed with everything that this movie stood for without investing a braincell into the issue. Don't "acquiesce to the liberals" who are so used to living a life of luxury that they forget that everywhere else in the world it's dog-eat-dog. Worrying about the environment is a luxury that most of the world doesn't have- when you are concerned with feeding your starving family, the dirty rivers and lakes are easy to forget. I'm not advocating environmental unfriendlyness, but we can't forget that if we lose the battle of economics we'll be starving while some other country is concerned about their trees and endangered frogs.

[–] 19 years ago

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[–] Ryb33338 19 years ago

<<<I am a greedy consumer and I think most of us are. In addition if GM doesn't get greedy, then one of its competitors will and the money will go to them. The American economy is propelled by greed. Once companies stop being greedy American money will just go to the greediest country.>>>

You state that you want consumers to have items as cheap as possible. However, if American factories continue to close down and America continues to become even more of a service economy, the value of the American dollar will decline. Once that happens, those cheap goods that you value so heavily as a greedy costumer will no longer be so cheap. Now, possibly you have doubts whether the American dollar will decline. Over the past six years, the Euro has gone from being worth 75 cents to a dollar to almost twice that amount. In other words, the value of the dollar is plummetting because too many Americans are losing good 15-20 dollar an hour manufacturing jobs and replacing them with 7-8 dollar an hour service jobs. The only way to stop that from happening is by lowering the income tax and imposing a tarriff tax. That way American companies get a boost and foreign companies (or American companies who are operating abroad) don't have such an edge over home-based companies.

[–] crazykeyman 19 years ago

This statement is well thought out and It is the example of what makes this country great.

What people need to know is United States is a free country. That freedom allows people to make choices, choices that may benefit others or not. I do believe companies that do their best to keep their employees happy tend to succeed, however in order for this great experiment (capitalism) to work we must have the freedom of choice. This philosophy is at times harsh to those who want to be taken care of, however it is an extreamely successful philosophy over all. This is a philosophy of this country and it goes along part and parcel with freedom.

There are other countries that have a different philosophy. Their emphasis might tend to protect the comon worker. This is a valid choice one might make when choosing a country to live in. These countries tend to not succeed in the global market place but their citizens may feel it is better to lose their freedom so that they might be taken care of.

There have been many immigrants to this country that have done well with our philosophy. It seems the only ones that take issue with this are some of the American citizens themselves. I think that instead of trying to change the U.S. and their ideology these people might consider a country that is more like minded to their's. No I am not saying "America love it or leave it ." I am simply stating you might be happier elsewhere.

[–] Ryb33338 19 years ago

<<<What people need to know is United States is a free country. That freedom allows people to make choices, choices that may benefit others or not. I do believe companies that do their best to keep their employees happy tend to succeed, however in order for this great experiment (capitalism) to work we must have the freedom of choice. This philosophy is at times harsh to those who want to be taken care of, however it is an extreamely successful philosophy over all. This is a philosophy of this country and it goes along part and parcel with freedom.>>>

First of all, people are not free to make their own choices, they're free to make any choice they want in the confines of the law. Secondly, the system of economy which is called capitalism was largely based on the writings of a man named Adam Smith. Adam Smith felt that countries had to protect themselves from exploitation of cheap overseas labor by placing import tarriffs. The founders of this country, who decided all this stuff way back when, thought that American workers should be protected from American corporations, which is why most of them, including the most conservative of them (Alexander Hamilton) believed in import tarriffs. Another person who believed in freedom was Abraham Lincoln, who established the Republican party based on two concepts, pro-abolition and pro-tarriff.

What does all this mean? In this film, Michael Moore, who is not my favorite human being, makes a pretty convincing case that the American government should intervene to stop companies from closing down companies in Flint, MI and open them up in Mexico City, paying the Mexican workers 750 percent less than American workers. By placing a tarriff on imported goods, companies would be forced to stay in America if their sole means of sales were American consumers.

[–] crazykeyman 19 years ago

I find it interesting that you say Alexander Hamilton represents the most conservative of our founding fathers. The Federalists, led by Alexander Hamilton, supported a strong central government that favored industry, landowners, banking interests, merchants, and close ties with England. Opposed to them were the Democratic-Republicans, led by Thomas Jefferson, who advocated limited powers for the federal government.

Now I always thought limited government was a conservative stance. Hamilton wanted only landowners to have the vote whereas Jefferson trusted the vote to all men.

It sounds like you are comfortable with being a good Federalists. I guess that would also make me a good Democratic-Republican.

It's fun to look back at history and see how all these different names kept changing places. I mean the names of republican and democrat sure have meant different things through the years

[–] Ryb33338 19 years ago

A conservative in the time of Hamilton is certainly far different from a modern conservative. In Hamilton's time, a conservative would believe that government works best when power is concentrated in the hands of the few (essentially limited government). Hamilton wanted a form of government that heavily resembled the British, minus the king. He basically found that if an economic system works, and certainly the British system worked at that time, then there was no reason the Americans shouldn't immitate it. The key to that equation, though, was that the system had to WORK.

FDR resembled him in many ways. FDR was not ashamed to try something to break the Depression, and if it didn't work, scrap it. People have stopped using this highly involved process of thought. Anyone who looks at America now, the replacement of a self-sufficient manufacturing economy with that of a service economy, should easily perceive that the current system isn't functioning very well.

I have no problem with believing in the concept of limited government, but that has its limits. And if you're talking about government hand-out programs or socialized programs, limited government is important, especially considering the high level of debt America currently has. However, if laissez faire involves American workers competing with Chinese workers who will work for $2 an hour, and an increasing dependence on foreign markets to meet our demand, then you can count me out of the limited government camp. If corporations are tearing apart the American economy for the good of their own businesses, the government has to step in. The most important function of any government is the protection of the country, whether the threat is military or economic, the government has to serve the needs of the country before the needs of corporations.

[–] crazykeyman 19 years ago

I actually don't have an argument with much of what you are saying. I too believe in limited government within certain bounds. In fact with the amount tarriffs that have been placed on us from other countries I find it only fair to place tarriffs on imports.

Tarriffs used to be how we paid for our government before government became as burdomsom as it is today thanks to FDR. Many people credit FDR with bringing us out of the depression. What really helped us was that much of Europe's factories were destroyed in WWII. With the exception of Pearl Harbor we were virtually unscathed. This gave us an enormous advantage. Bottom line we had the factories when no one else did. Because of this boom the public feels that a war will always help the economy and they are always amazed when the opposite is true.

Every President (Republican or Democrat) either takes credit for the economy or blames the adminstration before him when in actuality the President has very little to do with it.

Although it is important that government watches out for corruption in business as Theodore Roosevelt did, for the most part it's best when they stay out of the way.

[–] Ryb33338 19 years ago

I don't credit FDR with bringing us out of the Depression. Although, his ability to keep us out of WWII as long as possible was essential to ending the Depression. If we had been in from Day 1, I'm not sure the war would have had any financial benefit for us. However, I do give FDR credit for helping people get through the Depression. Many of the government programs begun by Roosevelt were supposed to be revised later on. Unfortunately, the only president with the courage to roll back any of his New Deal was Reagan. Also, I may be getting my history mixed up, however I believe it was Woodrow Wilson who first passed a national income tax law.

As for your statement about government staying out of business, I agree. However, I don't believe passing tarriffs -which it seems you agree and most people agree with me but nobody in Washington is doing a damn thing about it- interferes with business. It just gives American companies an advantage in America- sort of like a government-imposed home field advantage.

[–] crazykeyman 19 years ago

>As for your statement about government staying out of business, I agree. However, I don't >believe passing tarriffs -which it seems you agree and most people agree with me but nobody in >Washington is doing a damn thing about it.

Yeah I know what you mean it probably has something to do with how comfortable politicians are with brief cases filled with green stuff.

[–] 19 years ago

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[–] kudos2kudzu 19 years ago

[–] Ryb33338 19 years ago

There may me more GM jobs in mexico, but that means a larger part of the mexican economy is foreign-owned. GM owns some of Mexico now. Maybe they should put a higher tax on foreign companies to ensure more local companies are built. Maybe not. Don't they depend on foreign investors?

The ultimate goal of trade is to make a profit. America has had a trade deficit for a very long time now. As this continues, money is pouring out of America and it is becoming less self sufficient. Hitler, who despised our Democracy, envied the U.S. because we were the only nation in the world that could be completely self-sufficient. What he basically launched WWII to obtain, we already have and we are squandering it away by outsourcing it to Asia and South America.

Why has this paticular war been so bad for the american economy?

Because wars are bad for the economies of the country that is fighting the war. The reason why WWI and WWII were good for the American economy was that we stayed out of the wars long enough to make a profit from them. The two countries that were in both wars from the start were Germany and England. Both countries' economies were in shambles after the wars were over. America, on the other hand, stayed out of both wars until they had already enough sold weapons to the Allies that we had made substantial gains, basically we had a huge trade surplus. The fact is that America can't profit from the War in Iraq because we can't sell weapons to ourselves, and if we do that isn't true growth, it is just a waste of our natural resources on a cause that will never have any economic benefit for us.

[–] bobwal2-1 19 years ago

I have enjoyed reading all of your posts. I worked at Raytheon in Andover, Massachusetts for two years. I was in the security department but I still recieved a good wage ($15 per hour) and great benefits (top health care for $2 a week). I saw first hand what has been going on in the United States for the past twenty years.

The old timers there would tell stories about what it had been like to work there in the 1970's and 1980's. The management team would walk around the plant every day, getting to know thier workers. All the employees from the janitors to the CFO were treated fairly. If you worked hard you were rewarded with a good job. The workers were dedicated to the company and stayed for a long time, and the company was very productive.

Then in the early 1990's, things began to change. Newer management people would seldom walk around the plant. They were all obsessed with saving money, and began to slowly change nearly all the company policies. Productivity began to suffer becaue all this over management and red tape made it harder to work. Then the workers were cut back and laid off. The bottom line would be a little larger. But two guys would try to do a job that in the past required three people. It took longer, so in effect productivity went down.

The Raytheon company has since moved almost all of its manufacturing jobs to Arizona and Texas. The former CEO Dan Burnham got an $18 Million payday, even though the stock went from $72 a share to $35 a share during his tenure. This type of corporate greed goes on in almost every company in America. The head people try to save money, but end up hurting the company. Workers are less productive because why should they work hard when thier job could go to China or India any minute?

Eventually our economy will really suffer. The middle class is shrinking. People just don't have the money to spend like they used to. Sooner or later all the outsourcing will come back to haunt the CEO's of America.

[–] justlynn 19 years ago

I am currently taking a North American Labour History Through Film course at a university in BC Canada. Roger and Me is one of the films that we have reviewed. One thing that Moore has accomplished as is evident in the posts to this list is that he has provoked people inot discussing issues that are usually not even given any personal thought.

I would encourage all to watch CBC Newsworld tonight Apr. 3/05 The Take is on and it is about plants being shut down in Argentina and how the workers responded. The exact opposite to the GM closures. You can also rent the video.

[–] Joetrevis 19 years ago

can you tell us how the Argentina workers responded?

Thanks.

[–] Idocamstuf 19 years ago

What really disgusts me is that big companies almost never cut their executives multi-million dollar salaries to save the company from a brutal lay-off. There should be a federal law that prohibits the company executives to keep their salaries so high when the company is in trouble.

[–] Ryb33338 19 years ago

I'd settle for a federal law that economically damages companies that use cheap foreign labor to produce goods sold in America, and lay off American workers in the process. If these companies had to pay for these practices, they'd take care of the multi-million dollar executives and they'd hire responsible executives who would pay American workers to make goods sold in America. BRING BACK THE TARIFF!!! BEFORE IT'S TOO LATE.

[–] 19 years ago

[deleted]

[–] bvaillan 19 years ago

From what I know, you sure can't lump Wal-Mart and Costco together; Wal-Mart is definitely exploiting its employees while Costco pays as much as the "supermarkets" you mentioned. I was in the UFCW while I worked in a Jewel store in the Chicago area, and all I did was pay dues for sub-par wages being paid as a result of a wage concession the union gave to Jewel. At a later job in a non-union supermarket, I never got a raise there, and they thought it was a big deal to give a nickel raise to anyone. Not all of the businesses are the same, nor are the unions. The greatest imbalance of all in most large corporations is the huge compensation package the executives get, even while the company is failing or laying off workers, while the workers make 200-300 times less. It would be better to lay off the executive than the workers; the company could then afford to keep workers, or retrain them, or retool the factory.

Bert V

[–] Idocamstuf 19 years ago

"It would be better to lay off the executive than the workers; the company could then afford to keep workers, or retrain them, or retool the factory."

Or bring their pay/compensation down to a reasonable level until the company begins to boom again. This will ensure the workers job security by cutting the multi-million dollar salaries of the executives and using it to pay and keep the workers that would have been layed off. This way the executives still have more than enough to live on, while all of the hard working folks still have jobs.

[–] dwight_b 19 years ago

Idocamstuff... firing the execs to afford to keep workers is the equivalent to cutting the head off of the body in order to consume less energy. Without the high paid execs a company can't focus, evolve and adapt. Look at the changes Chrysler has made in the last few years to their marketing, looks, style etc. They are now more profitable than ever because of management changes, not because of employees.

[–] dwight_b 19 years ago

If you fire the executives who is going to retrain the workers and retool the factory?

[–] Idocamstuf 19 years ago

I am not suggesting that we fire them, just bring their pay down to a human and reasonable level until the company starts to boom again.

[–] dwight_b 19 years ago

Just in the news:
FRANKFURT (Reuters) - Volkswagen cut could more than 10,000 jobs in Germany in the coming few years to make Europe's largest car maker competitive with its international rivals, a magazine said on Saturday.

Volkswagen wanted to reduce the workforce in west German plants drastically, Spiegel magazine said in a report released before publication, quoting internal VW projections.

Hit by a strong euro and weak sales, VW has been negotiating with its staff about cost-saving concessions in high-wage Germany.

Volkswagen and its main union struck a landmark labor deal in November that freezes pay for staff in western Germany, where it employs some 103,000, until early 2007 in return for job guarantees until the end of 2011.

The magazine said Volkswagen would even go ahead with the plans if it decided to build a new sport utility vehicle (SUV) at its main Wolfsburg plant. The firm is currently evaluating whether to assemble the car in Germany or in low-wage Portugal.

A Volkswagen spokesman said the report was pure speculation. "It makes no sense to join this speculation," he said.

VW's internal product strategy committee has recommended building the SUV in Portugal from 2007 rather than in Germany, saying assembling the model there would cost at least 1,000 euros less per vehicle than in Wolfsburg.

Focus magazine said Wolfsburg looked set to emerge as the assembly plant for the model but staff would then face wage cuts of some 20 percent and longer working hours.

The VW spokesman said no decision had been taken yet.

Chief Executive Bernd Pischetsrieder has warned that the future of car making in western Europe was at risk if manufacturers did not get their production costs under control.

[–] Ryb33338 19 years ago

Dwight_b is right. You can't and shouldn't, at least in a capitalist society, tell private companies what policies they should or shouldn't have. However, you can petition the government to enact policies that are better for the overall standard of living for the people. You can push government to pass laws that give the American-based companies an advantage over the foreign based company. Because, we can't expect American workers to bid for jobs against Chinese, Mexican, and Indian labor. So what you do is simple, it's the idea of what the Republican Party was founded, it's called a Tariff.

This would also help pay off the national debt by generating more revenue for the federal government as they would bring in taxes from the tariff and they would get more income tax money as payrates would be higher. At the same time as you give American companies an edge over foreign competition, you reward consumers by imposing a federal limit on state sales tax. For instance, many states have 6% sales tax, you could make the limit 5% and reward consumers, so although they'd be paying for more expansive American products, they would be getting taxed less on those products.

The problem with people who complain about businesses or corporations is that they direct their anger in the wrong direction. A business or corporation doesn't care what you have to say, they are not in business to make you happy. However, the government's sole purpose is to keep you happy enough not to vote them out of office. If the government was petitioned to change, they would be forced to.

[–] dwight_b 18 years ago

Just wanted to post an update after reading that GM will be cutting 30,000 jobs in North America.

Today's economy is changing. Americans need to realize that we are now competing with the rest of the world; gone are the days where a household could have a single income and have the world's best standard of living. If you don't want your job to be "downsized" or "off-shored" you need to make yourself a valuable resource! Get an education, stay in school! India and China are putting out more college graduates than the U.S. They actually respect engineering and the sciences (unlike the U.S. where there is nothing worse than being a nerd). If America wants to maintain itself as the leading economic power (thats a big If), then it's up to Americans to get off their butts and take education and hard work seriously.

Unions have done a wonderful job at scaring businesses out of the U.S. They are losing their ability to earn people more money than they deserve... don't count on them to ensure that you can do an unskilled job and make good money. Take it upon yourself to solidify your future. For facts and figures read the recent Fortune magazine cover-story called "America: The 98 lb. Weakling?"

Yes, I may seem a little bitter, but look around. I saw a bumper-sticker today that said "My kid beat up your honor student". That's great. In America it is better to be cool than smart... well, the cool kids will be getting laid off by GM while the smart kids will be starting companies and advancing technologies that help America thrive. Unfortunately we are all in this economy together and if everyone has that "be a slacker" mentality I will be stuck living in a crappy economy with everyone else.
OK, enough with my tirate. Go read "Atlas Shrugged"... I personally don't agree with a free-market economy, but I think that Rand's overall point is somewhat in line with what I am saying.

[–] Idocamstuf 18 years ago

"In America it is better to be cool than smart... well, the cool kids will be getting laid off by GM while the smart kids will be starting companies and advancing technologies that help America thrive."

That is funny how everybody says that, but in reality it is rarely the case. I have seen most "smart" kids grow up to be simple hard working middle class Americans. On the other hand, I have seen many "cool" kids/high school dropouts become multi-millionaires. It really isn't as simple as "Get a good education and become rich or drop out of high school and become a bum". Trust me, many of the richest people I know never even finished high school.

[–] usafa93 18 years ago

So, after taking careful observation, as you apparently have, what is your formula for success?

[–] Idocamstuf 18 years ago

Of course, there is no given formula. There is really no way to just draw out a plan for the future and have everything happen exactly that way. That is just not how life works. There are too many different variables in life to predict the future.

[–] philip_jp 18 years ago

To blame Unions for cutting jobs is stupid. America used to have massive unions until the government and corportaions attacked them and now we have not many left and they are not political like they are in most countries.

Most rich countries have lots of unions and have a unions day that they all celebrate once a year. And they are political. almost all other governments have a labour party but we dont. So please talk about reality and stop watching corporate propaghanda about unions.

I hear everyone talk about free market captialism and we cant have government interference. Well thats nice and good on papaer and thats what they say on tv and in school. But in reality we have a huge state-corporate system. Or Corporate wel-fare. The governments gives ton of the tax-payers money and tax breaks to big corporations so all this garbage about we cant have government interferences with the economy is lies and is not what our systme does.

And tons of these corporations illegally find ways to not pay taxes using bogus companies oversees and investing in bogus investments which in returns sends the money back to america with hugh tax breaks. So lets not pretend that all these corporations even give a lick about the common american. And the IRS Is a joke ask any irs official and they will say they are overwhelemed and underfunded its a joke. mostly they go after us for not paying one yeras taxes of a couple thousand while the guys who dont pay millions get away happily.

There is always many ways to run a economy effectively and healthy. What you here on the mainstream is mostly lies and you will hardly here about the other ways. Most of the mainstream media is part of conglomerates who have intrest in having only certain news get out thats just the way it works.

[–] usafa93 18 years ago

Actually, corporations are the only entity that pays taxes twice, despite your incorrect assertions to the contrary.

Corps pay at the entity level, and when they distribute gains to owners, the same gains, the exact same, are taxed again. Corporations are the only entity that suffer the dual-taxation.

I could say some crap about the liberal press and propaganda and schemes to undermine business, blah, blah, blah, but I'll leave that sort of conversation to folks on a different level. Next.

[–] RikkyRicardo 18 years ago

im not sure if i fully agree with ur statement that businesses cant put employees before profits.
the way GeneralMotors went about gaining more profit in this movie wasnt a good way.yes they may have saved money by setting up in mexico,but it damaged their reputation,and created a lot anger towards the business,that could ultimately damage it a lot more than the profits it gained.
i dont mean to contradict myself,but yes businesses shud be more worried bout profits than employees,but they do need to find a balance between the two,instead of just worrying bout profits.finding a balance would have made GeneralMotors an extremly successful business,and would have guaranteed its success in the future.

when you f00k over people the way GeneralMotors did,it will always come back to you.