Ninja Bear

Let Detroit Go Bankrupt

By Mitt Romney
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

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James Kotecki

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Obama Is Killing the GOP With Kindness

Now that Barack Obama and John McCain met on Monday, it's looking increasingly as though McCain will be offered a position by Obama. Where will Obama's team of rivals idea end? Will Dick Cheney be offered a post as well?

Maybe Hillary Clinton and McCain won't serve in the Obama administration, after all. Bill Clinton's manifold business activities, if that's the right term, may render it too complicated for Hillary to pass muster. And whether she really wants the post remains an open question.

But it's clear that Obama is taking a radically different approach to the presidency than George W. Bush. Where Bush sought to polarize, Obama is taking the opposite approach. He wants to embrace the opposition in order to create his own kind of stealth presidency. Instead of trying to crush an already enfeebled Republican opposition, Obama is seeking to further weaken it by depriving it of an enemy -- himself. Democrats who worry that Obama is selling out to the opposition may have it backwards. His ingenious approach could end up marginalizing the GOP for decades. Tapping Cheney might be going one step too far, but could a post for the Decider himself be far behind?

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Iraqi Premier Defends Security Accord

BAGHDAD — For the first time since his government approved a three-year security agreement with the United States, Prime Minister Nuri Kamal al-Maliki publicly defended the pact in a televised address on Tuesday night, reassuring Iraqis that representatives from all sects had been involved in the negotiating process and that the agreement was the best option available for Iraq.
The 12-minute speech came six days before Parliament is scheduled to vote on the agreement, which governs the presence of American troops in Iraq for the next three years.
In a separate action on Tuesday, the Iraqi cabinet announced that it had set a firm date, Jan. 31, for elections in all provinces except the three that make up Kurdistan and the province of Tamim, which includes the ethnically charged city of Kirkuk.
In his address, Mr. Maliki acknowledged that the negotiations were difficult, but said there were few alternatives to the current pact. “I’d like to say candidly we have our own assessments, but at the same time this is a strong beginning to get back the full sovereignty of Iraq in three years,” he said.
He described the contents of the agreement in broad terms and said, “no detainees anymore, no detention centers anymore, or American prisons for Iraqis, no searches or raids of buildings or houses, until there is an Iraqi judicial warrant and it is fully coordinated with the Iraqi government.”
Mr. Maliki also attacked opponents of the pact for suggesting over the past few days that the bargaining had gone on in secret, apparently a response to politicians who said they were surprised by the contents of the agreement.
“I feel sad that the opponents or even those who agreed with the pact released statements that are far away from reality,” he said.
In a culture deeply imbued with conspiracy, Mr. Maliki repeatedly vowed that there were no secret side agreements to the pact, the text of which was published in local newspapers on Tuesday.
Supporters of the agreement, including most Shiite and Kurdish legislators, are in a delicate position. While they say that they have the majority needed to succeed in Parliament, a simple mathematical victory is not enough; all acknowledge the need for widespread support.
In a statement released on Tuesday, Grand Ayatollah Ali al-Sistani, the most influential Shiite cleric in Iraq, who has advocated national unity consistently since the 2003 invasion, reiterated his insistence that the agreement draw support across sectarian lines.
“Any agreement that doesn’t win national consensus,” the statement read, “will not be acceptable and will be a reason for more suffering for Iraqis.” Shiite lawmakers said that the ayatollah told them on Saturday that he found the final draft of the pact satisfactory, if not ideal, but that his condition of national consent must be met.
Addressing these concerns, Mr. Maliki argued that “the consensus vote in the cabinet on the withdrawal of the forces represents a unified voice.”
The main opposition is coming from followers of the anti-American Shiite cleric, Moktada al-Sadr, who has rejected any agreement with the Americans in principle, and many Sunni politicians, who, while they are open to supporting the deal, are wary of the Shiite-led Iraqi government.
Though Sunni lawmakers are aware that Parliament has no ability to make changes to the agreement, they are seeking certain guarantees before giving their approval. These guarantees, they said, could appear in an appendix to the pact or as supplementary legislation.
Sunni lawmakers spent the day drawing up a list of demands that they intended to hand over to the Americans and the Iraqi government. Some of the demands are specific, like amnesty for the majority of the 16,000 Sunni detainees in the custody of the Americans. Others are more general, like the concern that Sunni groups will be unfairly singled out as targets by the Iraqi and American security forces.
Sunni lawmakers said they had been meeting with Americans, including the ambassador, Ryan C. Crocker, to air their concerns, but added that the Americans had only listened and not responded in any specific way. The Sunnis said that they did want some sort of framework in place after Dec. 31, the expiration date for the United Nations resolution currently governing coalition forces. But they said there could be alternatives to this pact, including an extension of the resolution.
However, a senior American official in Baghdad said that the Iraqi government had “formally and categorically rejected” an extension of the resolution.
“We want to reach a solution,” Alaa Maki, a senior leader in a Sunni party, the Iraqi Islamic Party, said in an interview at his office on Tuesday. “We don’t want to just put obstacles in front of Iraqi progress. But we want things to be put in the right way, so that we build on the right foundation.
“We regard this as the most important issue from 2003 until now,” he added, “because it will put the Iraqi future on paper.”

The True American's Value of Work

Bail out the auto-industry? Yes, but how?
The American auto-industry is out of date. You can earn a 160K dollar a year by making your hands dirty in the auto-industry, so, that cars have to cost a lot more than the Japanese stuff to produce. Can that make American cars better? They say so, but the right answer is no. If you make Japanese cars, you can’t pay your workers 80 dollars an hour. That will give you a lot of troubles with the union. If the workers strike you can’t make any profit. If you don’t make profit you can’t get the capital to keep your plant rolling. But there’s one shining blessing: an unemployed worker earns nothing, so, he/she doesn’t pay a lot of taxes. To pay as less taxes as possible seems to be one of the primary goals of true Americans. It is very unpatriotic to pay taxes, they say. So, closing the non-profit worthless auto-industry is partly fulfilling the American dream. The unemployed workers don’t pay taxes anymore.
What a relief!
Less government is also on the wish-list of true Americans, so, there has to be no help for the unemployed workers and they starve to death, what will decrease the unemployment numbers. And with the workers dies the knowledge. That’s fine, because without terminal stupid voters the GOP (God’s Own Party) can’t exist so education and knowledge is not what the patriotic fighters for less taxes and less government can use. If you are qualified to do good work and the work is taken away from you, you have to die. Not anybody can win in the competition, even not if you are the best and the most diligent in the world. Without work you are trash and your spouse is trash and your children are trash, perhaps you are black, yellow or gay too. Shame on you! If you die, you go to hell and what option is left? None! If you don’t work, you don’t pay taxes and you have to die. It’s unpatriotic and un-American to provide social care by spreading the wealth. So die, but keep quiet. That’s how the Founders of the Republic want it. There is no hope for you and you have to know that.
Three million people are at work in the worthless auto-industry. It’s 1% of the population. Who cares?
This is what Richard Cohen of the Washington Post has to report:

[Obama] faces an economic catastrophe not seen since the Great Depression. The unemployment rate is still a modest 6.5 percent -- a trifle by Depression standards -- but back then only about 10 percent of Americans owned stock. Now nearly 50 percent do, and 68 percent live in homes they own. They all have been severely hurt. These people may not necessarily be out of work but they are certainly out of optimism and, if they are about to retire, out of their minds with worry.
In the past week, I've spoken with a gaggle of experts, some of them in finance, some in real estate and some in just plain investments. I've interviewed media magnates, both foreign and domestic, an investment banker, a manufacturer, and a former banker. This is what I have to report: Economically, we're in a recession. Psychologically, we're in a depression. The reason: None of these experts knows what to do.
Oh, sure, most everyone thinks some sort of spending plan would be a good idea -- get to work on the infrastructure. Most of them think we've got to thaw the frozen credit system. Schemes come and schemes go, but the suddenness of the collapse -- last year, the head of Goldman Sachs earned $68.5 million; this year, about $68 million less -- has produced a severe loss of faith in what once seemed an economic system blessed by God himself. Something has gone wrong. But what?
The solution is out there... somewhere. But it will take time and trial to find it. Obama knows this. It was one of the things he mentioned on "60 Minutes." But what he might not appreciate is that among his many gifts, the one that might matter most is how close he can come to Rooseveltian enthusiasm -- that optimism, that capacity for empathy that made so many ordinary people love this rich man and stick with him. Lincoln, a sometimes melancholy and somber man, belongs, as Edwin M. Stanton said, "to the ages." Roosevelt belongs to ours.

The other option is Sarah Palin, leading lady of God's Own Party and the solution to all misery: no palling around with terrorists, no abortion, no gay marriage less government and less taxes. Eh... do something? Yeah: pray!

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