Saturday, September 29, 2007
This week's deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition. What's less encouraging is how much this reality-based compromise still contrasts with the policies that unions and their political friends are promoting in the unreal world of Washington, D.C.
Our friends in the AFL-CIO often think we're too critical, but we're not responsible for taking union membership down to 7.4% of the non-government American labor force last year. (See nearby chart.) The reality of a dynamic world economy did that, assisted by the failure to adapt by union leaders and corporate managers. These columns support collective bargaining, and our belief has long been that if a company's workers vote to join a union, they and the company deserve what they get.
The problem with unions is not all that dissimilar to that posed by entrenched management: Once they win comfortable contracts, they often become impediments to the kind of innovation and flexibility essential to success in today's economy.
So in the name of "job security," they undermine a company's -- or a nation's -- competitiveness. The result, over time, is less job security for everyone, especially the union workforce. There's no better example of this than GM, where the UAW now represents about 74,000 hourly workers, compared to 246,000 in 1994. Some security.
The new GM-UAW contract is a belated recognition that the choice has now become change, or Chapter 11. Under the deal, wages are frozen, save for bonuses and some lump-sum payments. GM in turn promises to invest in American plants with UAW workers, though of course it will also keep investing abroad.
In what seems to be the most creative stroke, GM will pay some $35 billion toward a new health-care trust fund to be administered by the union. That's a big initial cash flow, but it means the company can divest itself of some $50 billion in long-term liabilities, which would only have grown as health-care costs rose and retirees lived longer. Investors loved it, driving up GM stock by around 7% for the week.
The UAW now gains ownership of its members' health-care resources, in effect becoming a financial manager of a giant Health Savings Account for auto workers. If the union is creative, it will rethink its coverage plans, using the new generation of consumer-driven health-care options (such as personal health savings accounts) to encourage and reward more careful spending by beneficiaries. UAW President Ron Gettelfinger has told his members the trust fund will last 80 years, and the union's job now is to make sure it does.
A similar arrangement at Caterpillar Inc. didn't work because the money ran out in six years.
This new Treaty of Detroit in the marketplace is all the more notable when you consider how little the union political agenda has changed. The AFL-CIO famously split in 2005 over the priority of organizing over politics. But organized labor's share of the private workforce has kept falling.
We had a friendly visit not too long ago with Andy Stern, the Service Employees International Union President and perhaps the most successful modern labor leader. He is a shrewd man, but his main message seemed to be that union salvation lies in America adopting the work rules and income redistribution of Europe. He says companies need to pass their health-care costs onto government, meaning taxpayers. And while he recognizes that unions can't secede from the global economy, the trade rules need to be changed -- that is, restricted or managed -- so that the pace of change is less disruptive and wealth more equally shared.
With Democrats now running Congress, and ahead in the Presidential polls, Mr. Stern and his union mates are closer than they've been in decades to seeing that agenda implemented. But they also reveal their own lack of faith in the appeal of unions when they support a ban on secret-ballot elections at work sites. And of course they still benefit -- unlike anyone else in American politics -- from being able to coerce the payment of dues.
The larger irony is that Europe is now learning the hard way that Mr. Stern's "social contract" is itself deeply flawed. French President Nicolas Sarkozy was elected this year in part because he acknowledged that even France can't sustain the French model any longer. Health-care expenses represent a huge chunk of the tax burden in France, where restrictive work rules and such union demands as the 35-hour week have led to far higher joblessness and far less prosperity than in the U.S.
Mr. Sarkozy is now pushing American-style reforms precisely when Mr. Stern and Democrats are promoting French policies. Our guess is that economic reality will in the end limit Mr. Stern's political ambitions in the same way that global competition has finally awakened the UAW.
Monday, September 24, 2007
Is this just a move by the UAW bigwigs for the benefit of the union kool aid drinkers?
Or do they REALLY believe that in a global economy
any company can guarantee job security?
Surely they know that even though GM, has a surplus of about a 65-day supply cars/trucks that a strike will damage sales and profits?
Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt the company because its new crossover vehicles, the Buick Enclave, GMC Acadia and Saturn Outlook, are selling well and in short supply.
"The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said. "There's not a lot of inventory available to sell down. So they need to keep that pipeline full."
Libby called the Enclave and Acadia a success story for GM because they don't stay on lots for long and they sell at or near full price.
And what about workers making only $200 per week in strike pay?
Worker Anita Ahrens burst into tears as hundreds of employees streamed out of a GM plant in Janesville, Wis., just after the strike began at 11 a.m. EDT.
"Oh my God, here they come," said Ahrens, 39. "This is unreal."
Ahrens has seven years at the plant, where she works nights installing speakers in sport utility vehicles. She waited Monday for her husband, Ron Ahrens, who has worked there for 21 years.
The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.
"This is horrible, but we're die-hard union, so we have to," Ahrens said. "We got a mortgage, two car payments and tons of freaking bills."
Tom Libby, senior director of industry analysis for J.D. Power and Associates, said, "I just think it's going to hurt both sides in the long run."
I agree Mr. Libby, I agree
Quotes taken from; http://www.chron.com/disp/story.mpl/ap/fn/5160480.html
UAW sets 11 a.m. GM strike deadline
September 24, 2007
By KATIE MERX
FREE PRESS BUSINESS WRITER
Saturday, September 22, 2007
Wednesday, September 19, 2007
To clear up some confusion over HB-5194
It was the H-10 version that passed
The version of House Bill 5194 that passed the House of Representatives was the H-10 version. This version REPLACED the original bill and actually CUT!! the income tax to Disabled Veterans by $250.00. This bill did NOT increase the income tax rate for anyone and was effectively a tax DECREASE.
So the H-10 version of HB 5194 did not raise the income tax as it was originally drafted to do. Instead, it only cut disabled veteran's income tax.
Thank you Dan Acciavatti
32nd District for clarifiying this.
HB-5194, As Passed House, September 18, 2007
SUBSTITUTE FOR HOUSE BILL NO. 5194
HB-5198, As Passed House, September 18, 2007
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
An act to provide for the levy, assessment, and collection of
a specific excise tax on the storage, use, or consumption in this
state of tangible personal property and certain services; to
appropriate the proceeds thereof; and of that tax; to prescribe
penalties; for violations of the provisions of this act and to make
This bill includes a tax on our phone service
Well now its up to the Senate to stop the Democrats from raising our taxes
Here's the roll call:
VOTES ON HB 5194
DEMOCRATS VOTING `YES' (52): Accavitti, Angerer, Bauer, Bennett, Bieda, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Dean, Dillon, Donigan, Ebli, Espinoza, Farrah, Gillard, Gon-zales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meisner, Melton, Miller, Polidori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Spade, Tobocman, Vagnozzi, Valentine, Warren, Wojno and Young.
DEMOCRATS VOTING `NO' (4): Brown, Corriveau, Griffin and Simpson.
DEMOCRATS NOT VOTING (2): Cushingberry and Meadows.
REPUBLICANS VOTING `YES' (25): Acciavatti, Ball, Booher, Calley, Casperson, Caswell, Caul, Emmons, Gaffney, Hansen, Hildebrand, Hoogendyk, Rick Jones, Moolenaar, Nitz, Nofs, Opsommer, Pearce, Proos, Rocca, Schuitmaker, Shaffer, Walker, Ward and Wenke.
REPUBLICANS VOTING `NO' (22): Brandenburg, Garfield, Green, Horn, Huizenga, Hune, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moore, Moss, Palmer, Palsrok, Pastor, Pavlov, Robertson, Sheen, Stakoe and Steil.
REPUBLICANS NOT VOTING (5): Agema, Amos, DeRoche, Elsenheimer and Stahl.
VOTES ON HB 5198
DEMOCRATS VOTING `YES' (51): Accavitti, Angerer, Bauer, Bennett, Bieda, Brown, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Cushingberry, Dean, Dillon, Donigan, Espinoza, Farrah, Gillard, Gonzales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meadows, Meisner, Melton, Miller, Poli-dori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Tobocman, Warren, Wojno and Young.
DEMOCRATS VOTING `NO' (7): Corriveau, Ebli, Griffin, Simpson, Spade, Vagnozzi and Valentine.
DEMOCRATS NOT VOTING (0)
REPUBLICANS VOTING `YES' (6): Ball, Calley, Emmons, Gaffney, Hildebrand and Ward.
REPUBLICANS VOTING `NO' (44): Acciavatti, Amos, Booher, Brandenburg, Casperson, Caswell, Caul, Elsenheimer, Garfield, Green, Hansen, Hoogendyk, Horn Huizenga, Hune, Rick Jones, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moolenaar, Moore, Moss, Nitz, Nofs, Opsommer, Palmer, Palsrok, Pas-tor, Pavlov, Pearce, Proos, Robertson, Rocca, Schuitmaker, Shaffer, Sheen, Stahl, Stakoe, Steil, Walker and Wenke.
REPUBLICANS NOT VOTING (2): Agema and DeRoche.
Wednesday, September 12, 2007
Mr. McHugh is a legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.
Summer 2007 Version(Note: Legislative Analyst Jack McHugh has also discussed these ideas in detail in a WJR-AM 760 radio interview.)
In facing budget challenges that are unquestionably daunting, the state’s political establishment has concluded that tax hikes are necessary because it would be impossible to find enough cuts and reforms to close the gap between desired spending and expected revenue.
Not so fast!
Below is a list of ways to achieve $1.9 billion in savings with little heavy lifting. Some of these may take a few years to fully implement, but the total also exceeds the expected deficit for next year. Much of the savings comes from injecting competition into government operations, providing government employee fringe benefits comparable to (generous) private sector plans or eliminating non-core functions.
Change the higher education funding mechanism to a standard "per-pupil foundation grant" in which the money is attached to the students, rather than each university getting an amount determined by legislative maneuvering. As colleges were forced to compete for students, they would "sharpen their pencils," rein in costs and eliminate the kinds of inefficiencies highlighted in recent audit reports. If the effect was that costs fell by just 5 percent, the savings would be: $70 million.
Shift state police road patrols to less expensive county sheriff deputies. With benefits and related expenses it costs more than $100,000 per year to employ a state trooper; most sheriff deputies cost much less to employ. Effect on public safety: Zero. Savings: $65 million.
Adopt the Hay Group report recommendations on rationalizing public school health insurance, including requiring co-pays and preferred provider networks. This could save: $422 million.
Eliminate the Michigan State University cooperative extension service and agriculture experiment station to save: $61 million.
The original version of this list recommended halting the so-called "21st Century Jobs Fund" before it borrowed and spent $400 million. It’s too late for that now: All but $33 million was spent before the 2006 election, and taxpayers will be repaying the debt for decades. At the very least, the bleeding can be stanched — $75 million of what is being characterized as a "$1 billion state deficit" is new borrowing for this boondoggle. Skip it and save: $75 million.
According to a Rio Grande Foundation report, if 5 percent of prisoners are placed in privately-managed prisons, the state saves 14 percent on overall prison spending because government-managed prisons have an incentive to "sharpen their pencils." Savings: $192 million.
Eliminate "History and Arts" subsidies, and cut state library subsidies in half: $35 million.
In 1999 the Citizens Research Council noted that "a number of changes have occurred over the past decade that have reduced the need for intermediate school districts." Let’s help the ISDs catch up by reducing their operations grants: $32 million.
Cut so-called "20j" payments to affluent schools in half. This extra money is a political response to the fact that under Proposal A certain wealthy school districts benefit less from per-pupil state foundation grant increases than other districts. (They still benefit, though.) Savings: $26 million.
Cut transit funding in half. By eliminating protectionist regulations that restrict alternatives, empty buses driven by public employee union members can be replaced by private sector innovations like jitneys, commercial van pools, "call-and-ride" services, car-sharing and more. This will improve service for transit users at a much lower cost: $112 million.
Repeal the "prevailing wage" law that requires above-market rate wages be paid on school construction projects: $150 million.
Schools can realize huge savings by privatizing non-core functions like transportation, food service and custodial. Many have already done so: The Mackinac Center’s most recent survey of school privatization shows that 38.5 percent of school districts already have a competitive contract in place for one of these functions. Some idea of the magnitude of these savings can be seen in the experience of one district that saved the equivalent of $177 per student by contracting out for its custodial needs. Statewide, similar savings would add up to $300 million annually! In the short term, it would not be unreasonable to expect: $65 million.
Reduce the Merit Award Scholarships by 50 percent. Shockingly, at the governor’s request, the Legislature just did the opposite and increased these non-need based college scholarships by $64 million annually beginning in 2010. When families face economic hard times, the first thing they do is cut luxuries. This is a luxury Michigan can no longer afford. $60 million.
The state spends almost $15 billion on Medicaid and welfare, more than $6 billion of which is from state taxes and fees. Medicaid in particular is a command-and-control monstrosity rife with perverse incentives. Reforming it in ways that give recipients an incentive to economize and take better care of themselves could save hundreds of millions of dollars, while actually giving recipients greater freedom and choice. If just 1.6 percent of the expense in these two programs could be reduced in this way, the state would save: $240 million.
Thousands of private sector workers have given back painful wage and benefit concessions to save their jobs. The average state employee receives salary and benefits worth nearly $75,000, compared to approximately $58,000 in the private sector. Comparisons of specific job classifications produce similar comparisons. State workers should be grateful for their much greater job security and benefits, and more than willing to assume some of the burden through concessions. $300 million.
Total: $1.9 billion.
There is a common theme that runs through opposition to every one of these common-sense reforms: "That’s not the way we’ve done it in the past."
That’s not good enough anymore: Michigan has already passed the tipping point of going from relative decline in population and income to absolute decline. Without major reforms there’s nothing to prevent the entire state from going the way of Detroit, with a declining population and an economy that is unable to support a government establishment that believes its residents exist to serve it — not the other way around.
None of the items above would be "devastating" to the state, to "vulnerable populations" or even to any particular interest group. Most people would not even notice that these changes had taken place. The alternative, a major tax hike, will only drive more people out of Michigan and hasten the impoverishment of a formerly rich state economy that in this decade has become a poor one.
Note: This list combines reductions from current budgets, and speculative savings that assume certain policy reforms. It is intended as a plausible illustration of what is possible, not as a precise roadmap.
Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
Monday, September 10, 2007
Friday, September 7, 2007
As the contract talks continue, GM pushes for changes necessary for the financial solvency and future of the company while at the same time "suggesting" that if it doesn't get the needed concessions that it will be forced take its business outside of the U.S.
The biggest concessions on the table are;
- Ford and GM have made it clear that they expect to reduce the hourly cost from $71 to about $50 - a cut of about 30 per cent. The companies are keen not to cut workers' hourly pay, but they insist that other overheads must be reduced. http://observer.guardian.co.uk/business/story/0,,2156191,00.html
- General Motors Corp., Ford Motor Co. and Chrysler LLC have proposed making lump- sum payments to the UAW in exchange for being relieved of liability for much of their collective $90 billion in unfunded long-term retiree health care costs. The union would then set up trust funds, referred to as Voluntary Employees Beneficiary Associations, to pay all future costs from those funds and investment income. http://ap.google.com/article/ALeqM5hZL7LQxsN6ScGxNKD0raqzYCpSZQ
Of course at this point the UAW has to make like tough guys for the "kool aid" drinkers in its membership. However it's to early to tell if its really an act or the delusional death woes of a organization that has become what it was first organized to fight against. I can only hope its an act.
If the UAW is determined to "show management" and even strike it will be the end of American car manufacturing as we have known it at the expense of its membership.
So I think this would be a perfect time to reconsider the issue of Michigan becoming a right-to-work state.
Waiting for a National Right to Work Act.
By Deroy Murdock
Americans will skip work Monday to celebrate what really should be called Leisure Day. But this Labor Day, an estimated 7.2 million privately employed Americans (and even more public-sector workers) could relax more thoroughly if they were not compelled to join labor unions and/or pay union dues as job requirements. That’s why the time is now for the National Right to Work Act.
Congressman Joe Wilson and Senator Jim DeMint, both South Carolina Republicans, have sponsored legislation to restore a woman’s right to choose whether or not to join a union and a man’s right to choose whether or not to pay union dues.
“The National Right to Work Act simply erases the forced-dues clauses in the  National Labor Relations Act and  Railway Labor Act without adding a single letter to federal law,” Wilson told House colleagues as he introduced his measure last January. “Passage of this bill would return to working Americans the freedom of choice that never should have been stripped from them in the first place. Furthermore, passage of the National Right to Work Act would dramatically increase both the freedom and the prosperity of all Americans.” Wilson’s bill features 83 House co-sponsors.
Beyond the boost in individual liberty that Wilson and DeMint advocate, abundant evidence demonstrates that America’s 22 right-to-work (RTW) states significantly outperform the overall U.S. economy, while forced-unionism states trail both.
- For instance, the National Institute for Labor Relations Research found that between 1982 and 2004, manufacturing establishments expanded 4.5 percent in RTW states. While they shrank 5.3 percent nationwide, they shriveled in forced-unionism states: down 9.3 percent.
- From 1995 to 2005, private, non-farm employment advanced 20.2 percent in RTW states, ahead of the 14.5 percent national average and 11.3 percent hike in forced-unionism states.
- RTW states saw $50,571 average, real household income in metropolitan areas in 2002. That year, the $48,310 U.S. figure trumped its $46,431 counterpart in Big Labor states.
- In 2004, 71 percent of households in RTW states owned their homes, versus 69 percent across the USA, and 68 percent in mandatory-unionism states.
- RTW residents more broadly enjoy medical coverage. Between 1995 and 2005, the Census Bureau reports, the number of individuals carrying private health insurance climbed 11.9 percent in those states. The 7 percent national average once again outstripped the 4.4 percent increase in compulsory-unionism states. Meanwhile, the number of children with private insurance rose 9.3 percent in RTW states and 2.9 percent, on average, across America. But in forced-union states, the number of boys and girls with private coverage actually slipped 0.5 percent.
So, do RTW laws catalyze greater prosperity, or are RTW states the kinds of jurisdictions that cut taxes, deregulate, preserve property rights, and otherwise encourage capitalism?
More pastorally, are RTW laws the animal feed that fattens the chickens, or are they the roosters that believe their crowing summons the sunrise?“States with Right to Work laws tend strongly to have other pro-growth policies,” says Mark Mix, president of the National Right to Work Committee. “But Right to Work laws themselves play a very important role in fostering a good climate, both for enacting other pro-growth policies in the first place and for maintaining them in the face of strong opposition from Big Labor.”
Mix adds that in non-RTW states, “union campaign operatives use a huge chunk of the forced dues they grab to elect politicians who are beholden to Big Labor’s agenda of higher taxes, more government spending, and straightjacket regulation of business.”
Conversely, Mix maintains, union bosses in RTW states lack access to compulsory dues, thus limiting their spending and activity to promote statist politicians and policies.
Nevertheless, and especially on this holiday, Big Labor still sings the praises of unionism.
“More than 97 percent of union workers have jobs that provide health insurance benefits, but only 85 percent of nonunion workers do,” the AFL-CIO crows. “Unions help employers create a more stable, productive workforce —where workers have a say in improving their jobs.
”These are appealing arguments. Union bosses should have enough faith in themselves and what Big Labor offers that they can attract U.S. employees through persuasion rather than coercion.That is all the National Right to Work Act asks.
© 2007, Scripps Howard News Service— Deroy Murdock is a New York-based columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution.
Wednesday, September 5, 2007
GM gains surprise analysts while Toyota posts rare decline
Last Update: 5:41 PM ET Sep 4, 2007
GM posted a surprisingly strong 6.1% increase in car and light truck sales in August, nudging the seasonally adjusted annual rate of sales to 16.3 million, according to Autodata, easily topping Thomson Financial estimates of 15.9 million.
The data raise questions about whether the industry has reached a turning point, or whether GM's upbeat report and Ford's rosy outlook will succumb to increasingly harsh economic realities -- realities that last month knocked seemingly invincible Toyota
Ford was the first to report and gave an early glimpse of what was shaping up to be the worst stretch for the automotive industry in almost a decade, reporting a 14.4% decline, slightly worse than the 13.2% drop analysts had expected.
Ford takes biggest lumps
Truck sales fell 2.4%, with the flagship F-Series pickup showing a 9.9% decline.
In the luxury division, which is currently being shopped around, Land Rover sales surged 32.2% while Jaguar and Volvo both logged double-digit declines.
GM posted a 6.1% increase in light vehicle sales to 385,529 cars and trucks from 363,521 a year earlier. Analysts, on average, were looking for a decline of about 4%, according to Thomson Financial. Total sales, including heavy trucks, rose 5.3% to 388,168.
Still, GM cut its third-quarter production forecast by 2% to 1.05 million vehicles. For the fourth quarter, GM said it is looking to build 1 million cars and trucks.
Lexus passenger car sales rose 7.7% to 19,789 vehicles from 18,376 a year earlier. Light-truck sales rose 2% to 97,964 from 96,034 a year earlier.
Car sales increased 11.7% to 91,448 from 81,868, while truck sales fell 3.6% to 66,894 from 69,385. Honda division sales totaled 141,906 in August, up 6.7% from 132,990, a year ago. Sales at the Acura division fell 10% to 16,436
By Martin Miller
Los Angeles Times Staff Writer
September 5, 2007
Among the nearly two dozen television DVDs slated for nationwide release on Sept. 11 is the second season of "Bones," the third season of "Grey's Anatomy" and the miniseries "The Starter Wife" that aired earlier this year. Not on the list on that day or any other in the near future is last year's highly controversial "The Path to 9/11."
The $40-million, five-hour ABC miniseries, which recently received seven Emmy nominations and drew a combined two-night audience of more than 25 million viewers, is for now on the path to nowhere. Its Amazon page reads: "Currently unavailable. We don't know when or if this item will be back in stock."
With no date for the release, questions are being raised about whether political pressure is behind its current status as a stalled or discarded DVD project. The reasons are murky, but the miniseries' writer, Cyrus Nowrasteh, believes it's crystal clear: Powerful forces are out to protect Bill Clinton's presidential legacy and shield Sen. Hillary Rodham Clinton (D-N.Y.) from any potential collateral damage in her bid for the White House.
Nowrasteh, also one of the miniseries' many producers, said he was told by a top executive at ABC Studios that "if Hillary weren't running for president, this wouldn't be a problem."..... read entire article here: http://www.latimes.com/entertainment/news/homeentertainment/la-et-path5sep05,1,1332927.story?coll=la-headlines-entnews&ctrack=1&cset=true
And this article was in the LA Times!
Well I think we should contact ABC inquiring when
we can purchase "The Path to 9/11?"
And just to make it convenient for you all,
here is ABC contact information
My e-mail letter to ABC;
I want to purchase on DVD your excellent mini-series "The Path to 9/11?"
Why is it being delayed?
Sept. 11 is fast approaching and it is a perfect time to sell and own this movie
PLEASE RELEASE IT ASAP!
My name here
My city, state here