FedUpUSA

Archive for the ‘Automobile Industry’ Category

Very few things illustrate how dramatically America has been deindustrialized than the stunning decline of the U.S. auto industry.  Once upon a time, the United States literally taught the rest of the world how to make cars.  We were the ones that invented the assembly line.  We were the ones that showed the rest of the world what mass production could do for an economy.  For decades, we produced more cars than anyone else and we sold more cars than anyone else.  Detroit was known as “the Motor City” and our manufacturing prowess dominated the planet.  But now all of that has changed.  Japan makes far more vehicles than we do today.  So does Germany.  As you read this, state of the art production facilities are going up all over China.  Meanwhile, the U.S. auto industry continues to rot and thousands upon thousands of good automotive jobs continue to leave our shores.  The rest of the world is making cars better than we are, they are making them cheaper than we are and they really don’t care that many of our formerly great manufacturing cities are turning into rotting, stinking hellholes.  The U.S. auto industry was once a symbol of American dominance, but now it is just a symbol of American decline.  If we want to remain a great nation, then we need to start becoming great at making things once again.

The following are 17 facts about the decline of the U.S. auto industry that are almost too crazy to believe….

#1 The average age of an automobile in the United States has gone up more than 50% since 1990 and is now sitting at an all-time record of 10.8 years.  The average length of a marriage in the United States that ends in divorce is only 8 years.

#2 Germany made 5.5 million cars in 2010.  The United States made less than half that (2.7 million).

#3 When you add up salary and benefits, the average auto worker in Germany makes $67.14 an hour.  In the United States, auto workers only make $33.77 an hour in salary and benefits.

#4 Back in 2000, about 17 million new automobiles were sold in the United States.  During 2011, less than 13 million new automobiles were sold in the United States.

#5 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts with the rest of the world of $110 billion.

#6 Japan builds more cars than anyone else on the globe.  Japan now manufactures about 5 million more automobiles than the United States does.

#7 In 2010, South Korea exported approximately 12 times as many automobiles to us as we exported to them.

#8 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to new tariffs.

#9 U.S. car companies are spending hundreds of millions of dollars building shiny new automobile factories in China.

#10 In 1970, General Motors had about a 60 percent share of the U.S. automobile market.  Today, that figure is down to about 20 percent.

#11 The combined U.S. market share of the “Big Three” American car companies fell from 70% in 1998 to 53% in 2008.

#12 Detroit was once known as the “Motor City”, but in recent decades automobile production has been leaving Detroit at a staggering pace.  One analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job during 2008.

#13 Today, only Chrysler still operates an automobile assembly line within Detroit city limits.

#14 Since Alan Mulally became CEO of Ford, the company has reduced its North American workforce by nearly half.

#15 Today, only about 40 percent of Ford’s 178,000 workers are employed in North America, and a significant portion of those jobs are in Canada and Mexico.

#16 The average Mexican auto worker brings in less than a tenth of the total compensation that a U.S. auto worker makes.

#17 In the year 2000, the U.S. auto industry employed more than 1.3 million Americans.  Today, the U.S. auto industry employs about 698,000 people.

Sadly, it is not just the auto industry in America that is falling apart.  In fact, almost everywhere you look in our economy (and in our society as a whole) there is decay and decline.

For example, our infrastructure was once the envy of the entire globe.  Today, U.S. infrastructure is ranked 23rd.

Recently, I wrote an article entitled “24 Statistics To Show To Anyone Who Believes That America Has A Bright Economic Future“.  In that article, I discussed many of the long-term trends that are systematically destroying this nation.

Just because we have had it so good for so long does not mean that it will always be that way.

As a nation, our wealth is declining.  A decade ago, the United States was ranked number one in average wealth per adult.  By 2010, the United States had fallen to seventh.

We lived off the wealth created by previous generations for a long time, but that was not enough for us.  We always wanted more.  Eventually we started going into massive amounts of debt so that we could keep this bubble of “false prosperity” going.

Today, when you add up all forms of debt in America, it comes to over 50 trillion dollars.

We are a great nation that is in an accelerating state of decline.

We have got to quit living off of the past accomplishments of previous generations.

We have got to quit being so lazy and decadent and spoiled.

There is absolutely no guarantee that America will always be a great nation.  In fact, when great nations fall, it usually happens very quickly.

I’m still proud to be an American, but the decay and the decline that I see all across this country sickens me.

And it should sicken you too.

The Economic Collapse

Well, I can’t say that I’m surprised by this, but I take no satisfaction in saying ‘I told you so.’ 

Even Obama No Longer Pushing Green Jobs

The Washington Times reports today on a little-noticed aspect of the administration’s latest — and likely fruitless — effort at stimulus: It doesn’t include funding for green jobs.

The long delays typical with environmentally friendly projects — combined with reports of green stimulus funds being used to create jobs in China and other countries, rather than in the U.S. — appear to have killed the administration’s appetite for pushing green projects as an economic cure.

After months of hype about the potential for green energy to stimulate job growth and lead the economy out of a recession, the results turned out to be disappointing, if not dismal. About $92 billion — more than 11 percent — of Mr. Obama’s original $814 billion of stimulus funds were targeted for renewable energy projects when the measure was pushed through Congress in early 2009.

***

Only about $20 billion of the allotted funds have been spent — the slowest disbursement rate for any category of stimulus spending. Private analysts are skeptical of White House estimates that the green funding created 190,700 jobs.

The Department of Energy estimated that 82,000 jobs have been created and has acknowledged that as much as 80 percent of some green programs, including $2.3 billion of manufacturing tax credits, went to foreign firms that employed workers primarily in countries including China, South Korea and Spain, rather than in the United States.

Whip out your calculators: 82,000 into $20 billion means those green jobs cost about $243,902 each. Let’s hope they pay well. The high cost per job should come as no surprise; despite the hype from green groups and the administration, cleantech jobs generally require enormously expensive subsidies.

For example, back in January, the administration was touting the $2.3 billion in manufacturing tax credits as creating 17,000 jobs — or about $135,294 per job. Even that tally proved to be overly optimistic, given the fact that many of those jobs went to other countries.

Sad really.  Michigan, the state that entered a recession long before the rest of the country because of its shortsighted proclivity to put all its financial eggs in one basket; the state whose economic well-being hinged on the success or failure of the automobile industry has repeated its mistake.   Ironically, both industries owe their ultimate failure to the same thing: government.

The automobile industry had been on an unsustainable path of union submission for years, when government policies allowed them to inflate the costs of automobiles beyond what would be affordable to the average person’s wages.  Easy credit to anyone who could fog a mirror allowed people to purchase cars well beyond their means for years.  (Sound like the housing market?  That’s because it is an identical situation.)  The unions continued to ask for more and the auto companies found it easier to capitulate because of the stupidity of government policy.  They relied on this unsound and untenable strategy until it ran them into the ground.  Then what did they do?  They turned to the government for a bailout of their unviable financial strategy, which bailout was handed out by the government for the ‘good of the unions,’ to all but one notable exception:  Ford Motor Company who so far, has gone it alone in the private sector.  Only time will tell if they are able to work their way out of the situation they got themselves into.

As the automobile industry sat up with their collective hands out, Michigan government was busy trying to jump onto the next stupid federal policy:  green jobs.  The State of Michigan itself, hoping to grasp onto more government cheese, decided to play ball with the new administration’s push of green energy for furtherance of its Cap & Trade policies.  Since that time, we’ve watched as the fraud of that scheme has been exposed from everyone to Al Gore and his Chicago Climate Exchange to the outing of the falsifying of data on the original science of ‘global warming,’ which fanaticism started the prospect of the new Ponzi scheme. 

Despite watching this unfold, Michigan continued to pour money (much of which it didn’t even have in the first place) into investing in green energy jobs.  The cost of such jobs being, as cited above, somewhere around $200,000 each.  That is not to say they PAY that much, but that’s how much the State of Michigan spent to obtain each one.  Over the past two years Michigan has almost exclusively invested its entire future into this federal government-invented scam.

Yes Michigan, you are a sucker.  There is no such thing as a free lunch and continuing to pursue it is nothing less than pure folly.  True wealth lies in production of goods and services that people can purchase at a price sustainable with the wages from own production and hard work – not from that which is artificially maintained with unsustainable government policies.  The entire country is about to get a lesson in what true production means, too bad Michigan had to be the first in line to step up and take the bait.

Left Lane News reporting on the UAW and Ron Gettlefinger:

UAW Chief: Workers Can’t Afford Own Products

By Andrew Ganz

 

United Auto Workers union chief Ron Gettelfinger indicated yesterday that the $14 per hour base wage earned by an entry-level worker building Chrysler, Ford and General Motors products isn’t enough to buy a new car.

The argument comes nearly 90 years after Henry Ford began paying workers $5 per day in hopes that the workers would be able to afford one of their own products, a Ford Model T.

Gettelfinger said that it’s a “fair question” whether or not auto workers can afford the products they’re assembling. An economist for Comerica, Dana Johnson, confirmed Gettelfinger’s comments by saying that a single income UAW worker making $14 per hour probably can’t afford a new car.

But a dual income family? “Then they could clearly afford a new car,” Johnson told the Detroit News.

The UAW negotiated the $14 hourly rate in 2007 and, despite his concern that workers can’t live up to the standard promised by Henry Ford, Gettelfinger nonetheless defended the concessions. More tenured workers earn more than double the $14 hourly rate.

We did what we had to do to get to tomorrow,” Gettelfinger said.

Awwww…..I feel so sorry for them.  Well, guess what?  The REST of us can’t afford your products either and it isn’t OUR fault they’re so expensive.  Ironically, it is the UAW’s fault.  The $14.00/hour for an ENTRY-level position on the line is the SAME wage that my husband, a carpenter with 25-years of experience makes when working for one of the big national builders.  It is just slightly lower than the $17.00/hour he can make with some smaller companies or on his own right now.   Also, it is MORE than my husband is currently making employed in the IT department for Hewlett-Packard. 

That being said, it is the UAW themselves that have played no small part in the precipitous increase in the cost of automobiles that has far surpassed any increase in wages.  However, none of us non-union workers in the private sector can just hog-tie entire industries and force them to cave into our demands, nor can we go cry to Congress and mandate a bailout of our respective industries.

So, to Mr. Gettelfinger I say, it’s just too ironic that the UAW has priced themselves right out of being able to purchase the cars they manufacture.  Welcome to our world.  Those of us out here trying to earn a living without government subsidies and favors and without holding our employers hostage to our demands can’t afford your cars either.  Wonder what happens when the price of cars gets to be so out of whack with incomes that no one can afford them?  The UAW will probably demand more money.  That’s what.