Re: [Amc-list] Sins

[Archimedes <Freedom@xxxxxxxx>]

Don Johnson <donjohnson@xxxxxxxxxxxx> said:

>Archimedes writes;
>
>They're all either dead or on life support because Americans don't seem to
>understand that we're not ina  battle for whatever riches we can win today,
>and to heck with tomorrow -- we're in a battle to be economically alive
>tomorrow.
>
>When Executives, Managers, and line workers start to understand that
>multimillion dollar salaries and $50 per hour wages and cushy
>pensions-for-life for assembly line work were an anomaly and cannot be
>supported indefinitely, maybe attitudes will change.  But I doubt it.  It
>seems like the entire culture is unwilling to get off the "give me every
>dime I want, or the factory can "Go To ....".
>++++++++++
>Before we all go badmouthing the American worker, let's do some math.
>In the Fall of 1969 I bought my 70 AMX for $4500.00, not including taxes.
>I could have bought a Corvette for $1000 more but I couldn't afford it.
>So if we say a Corvette was $5500 in 1970 and they're now selling for 10 
>times that or more, then it follows that the $50 an hour worker of today 
>should have been making $5 an hour then. I'm not sure of the wage then, 
>but I'll bet we're not far off.
>Superimpose that wage line with the wage line of management and you begin 
>to see where I believe the problem is.


The problem with that line of reasoning is that we're no longer in a market 
isolated by oceans.  Technology and infrastructure have improved so much in 
the past thirty years that we are no longer in a situation where we're 
competing only against each other; we're now competing against each other 
**as well as** the three billion Chinese, Indian, and Indonesian workers 
who want a piece of our action and are willing to take a tenth of what we 
demand for our labor.

Interestingly, AMC was somewhat ahead of the ball on overseas 
manufacturing.  About the Beijing Jeep operation, AMC brass said that once 
the factory was up and running fast enough to supply the Chinese market for 
Jeeps, they wanted to begin exporting them to the North American market.


>I believe there is no morality in today's boardrooms. I think they believe 
>they deserve the compensation packages that they get. When the workers see 
>what is happening with the bosses pay package, whether the company is 
>doing well or not, they are more than reluctant to give up some of their 
>wages to support that.


Unfortunately, there is always going to be a wide gap between the rank and 
file and the execs.  The execs are rewarded for increasing 
profitability.  The best execs are willing to do whatever it takes to 
hammer costs down and margins up.  There are hundreds of millions of 
dirt-poor peasants who would leap like cats into a chance to earn even $10 
per day in a clean, new factory.  A good exec knows that if he doesn't send 
production there, his competition will, and his company will eventually 
stumble and fall.

The competition from Japan and Korea put Detroit on its knees, beginniong 
in the mid-seventies, and has basically been able to keep it from fully 
recovering ever since.  When the fifty-odd Chinese manufacturers manage to 
get here, Detroit will simply evaporate.


>I read recently that some expert was saying that management compensation 
>should be in the 40 times the average worker wage, but right now it is 
>running near 400 times.
>Now, I'm not saying that management compensation is killing our companies, 
>but I will say that the greed factor exhibited and the lack of leadership 
>by management leads to workers attitudes that end in plants being closed 
>before wage reductions are taken.


I agree that management salaries are way out of line; but I also believe 
that the line workers are being paid way too much given the availability of 
much cheaper labor pools elsewhere.  Auto workers can't simply fast-forward 
the wages of the fifties and sixties to 2007; the only valid comparison 
should be with the current competition.  Granted, American workers are 
*generally* (though not always) more productive than those in other 
nations, but that's only good for a small advantage.

One sure way to kill off your R&D departments budget is to fatten the 
payroll.  Short term gain for the employees, long-term death for the 
company.  I'm sitting here wondering if employee-owned companies have a 
different experience.

At the same time AMC was bleeding itself to death, Japanese companies were 
beginning to build plants here.  They could do it profitably.  Why can't 
Americans?

-- Marc

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