Socialism wins again - Detroit goes Bankrupt!

[Adak]

After 50 years of socialist management, the golden goose has finally dropped dead, and Detroit - at one time our nations 4th largest city, has had to file for bankruptcy.

Hundreds of millions of dollars in debt to the unions, and with just a shell of the city left, Detroit has been judged by the states emergency manager (after they kicked out the Mayor and City Council for incompetence), to have no hope of paying off these debts.

When you raise taxes on businesses - they eventually go elsewhere.

When you raise taxes on individuals - they eventually go elsewhere.

When you don't fight crime in your city - both business and individuals, eventually go elsewhere.

When they leave, they don't come back.

Your city's tax base will take a serious fall in income, and if you keep it up, long enough, your city will be broke.

Next time, Detroit. Try a capitalist fiscal plan, not a socialist one.

[ZenGum]

Adak, the decay of Detroit is classic advanced capitalism. A real socialist (by definitions you have previously argued for) would have seized control of the means of production, set artificial prices for the products (mostly cars) and kept people working, however inefficiently.

It's screwed, but it isn't socialism, and never was.

[Adak]

Originally Posted by ZenGum

Adak, the decay of Detroit is classic advanced capitalism. A real socialist (by definitions you have previously argued for) would have seized control of the means of production, set artificial prices for the products (mostly cars) and kept people working, however inefficiently.

It's screwed, but it isn't socialism, and never was.

That's what happened, but instead of the politicians doing it by themselves, it was mostly done by the unions.

Crippling strikes forced the companies to cave into their demands, and politicians were forced to cave into the demands of their own employees unions. That kept everyone working, but at a cost that neither the companies nor the city, could afford.

[glatt]

Read any tw post about why Detroit failed. It's because American cars sucked for way too long compared to the Japanese. The jobs left, and so did many of the people. No people, no tax revenue.

But you want to blame it on the cops and firefighters because that fits your narrative. Too bad, because you were thinking very clearly in a lot of your recent posts on other topics.

[Adak]

Originally Posted by glatt

Read any tw post about why Detroit failed. It's because American cars sucked for way too long compared to the Japanese. The jobs left, and so did many of the people. No people, no tax revenue.

But you want to blame it on the cops and firefighters because that fits your narrative. Too bad, because you were thinking very clearly in a lot of your recent posts on other topics.

American car makers laughed at the ideas of quality control espoused by William Deming, while the Japanese embraced them whole heartedly, and spent millions implementing them into their factories and plants.

Later, it became apparent that quality control was the only way to go for the US car companies, but the unions resisted many of the changes needed. Also, through a series of crippling strikes, the unions removed a lot of value (money) from the car makers, making it impossible to fully implement the changes needed, to stop the slump the car makers were in.

The big 3 car makers had a management problem, no doubt about that, but the unions were a very powerful force also, at that time.

[BigV]

You don't know what the word "socialism" means, do you?

[gvidas]

As long as we're going line by line pointing out the sweeping inaccuracies:

- The mayor announced the bankruptcy.

- The city council didn't get kicked out (but several of them have left, for convoluted reasons of deflated ego / sideline sex scandal / health problems -- and even then, they weren't kicked out, their pay was withheld for not showing up to work in 4 weeks.)

There is a really serious issue re: the ratio of quality of life : taxes assessed.

[Adak]

Originally Posted by gvidas

As long as we're going line by line pointing out the sweeping inaccuracies:

- The mayor announced the bankruptcy.

- The city council didn't get kicked out (but several of them have left, for convoluted reasons of deflated ego / sideline sex scandal / health problems -- and even then, they weren't kicked out, their pay was withheld for not showing up to work in 4 weeks.)

There is a really serious issue re: the ratio of quality of life : taxes assessed.

There IS a "so called" Mayor of Detroit (Bing), but he has no financial power. It was Kevyn Orr who filed for Detroit's bankruptcy, but Bing did participate along with Orr, in the announcement of it.

The only person who had any power on this issue, was the emergency manager Kevyn Orr, who was put in place by the Governor. Orr was unable to get the unions to compromise on the debt they are owed by the city, although he did get compromises on debts owed from some major corporations (Bank of America, etc.).

Before these compromises were made, the indebtedness of Detroit was estimated at roughly 20 Billion dollars! The majority of that debt is to the unions pensions - which are outrageous.

[DanaC]

Originally Posted by BigV

You don't know what the word "socialism" means, do you?

Bears repeating.

[Adak]

Originally Posted by DanaC

Bears repeating.

Sure, because if management does it, it's instantly recognized as socialist, but if the unions themselves do it - well that's just fine, fine, fine. Couldn't possibly be socialism at work.

[DanaC]

Unions agitating for better pay or working conditions is not the same thing as 'socialism'.

[Adak]

Originally Posted by DanaC

Unions agitating for better pay or working conditions is not the same thing as 'socialism'.

When the Unions control production, most of the politicians, and can force huge wages and benefits for themselves, (far beyond the scale of non-union workers), then it's certainly NOT free market capitalism, anymore.

Unions frequently agitate for better pay or working conditions, but in the case of the Detroit auto companies, the unions were able to take control, by initiating crippling strikes, and ensuring their candidate won the election for the city, through large donations.

After they won, of course, they "owed" the union and gave in very readily to demands for higher wages and benefits to city employees.

We had the same problem in my city, which almost forced us into bankruptcy. Ten years later, we're still facing a huge debt, because of it.

[tw]

Originally Posted by Adak

When the Unions control production, most of the politicians, and can force huge wages and benefits for themselves, (far beyond the scale of non-union workers), then it's certainly NOT free market capitalism, anymore.

When a political agenda is more important than reality, then brainwashing is effective.

Detroit was heavily unionize in the 1950 and 1960s when Detroit was so innovative, became productive, and was profitable. What changed? By the 1970s, all top management was replaced with business school graduates. Top management in Detroit (ie Henry Ford) did not even have a driver's license. Top management was so ignorant that 2x4s were placed under the accelerator of the first Saturn. So that Roger Smith could not press that accelerator. Smith also did not know how to drive a car. So we should blame that on the unions?

Top management technical ignorance in and after the 1970s was so widespread that, for example, no innovation exists in a GM in 30 years unless innovation was required by Federal regulation. GM even had three intermediate sized cars that did not share even one part. Unions did that? Unions stifled design innovation? Business school graduates did. And then blamed the unions, Japanese, unfair trade, taxes, education, environment laws, and virtually everyone else rather than admit who were so anti-American. Their rhetoric and lies are automatically believed by those most easily brainwashed.

An engine that made Honda Accord and Civic the #1 an #2 selling car in America in 1980s (called CVCC) was developed in Ford in 1960 (called stratified charge). A bean counter and anti-American names Henry Ford stifled that innovation because it had three valves per cylinder - would increase costs. A 70 Hp per liter engine that was ready for production in GM in 1975 finally appeared in patriotic American products from Honda and Toyota in 1992.

The new machine tools necessary to make superior innovation was too expensive according to Roger Smith and other bean counters. Many GM cars even today need anti-American V-8 engines. Hate, ignorance, and fear stifles innovation. The dumbest among us then blame others who have nothing to do with those designs - the unions.

Even in the Indianapolis 500, V-8 (obsolete technology) engines are no longer raced. V-8 only exists where people who fear innovation and change (bean counters and wacko extremists) would rather blame others. V-8 is a trophy of those who are most anti-American. And others so brainwashed as to not even know that. The enemies of mankind stifle innovation to protect the status quo.

Why would anyone make a hybrid whose gasoline engine cannot even recharge its battery? Makes no sense to engineers or layman. But makes sense to top management (bean counters) and to others brainwashed by rhetoric. Who do not even have driver's licenses. Unions clearly designed that car? Total nonsense. Only the most brainwashed would recite that stupidity. Corrupt people - bean counters - designed it. And so screwed up the design that it had to be redesigned. Volt took more than 10 years to design. But extremist rhetoric even somehow blames that on the unions. But then knowledge of reality is irrelevant to wacko extremist rhetoric.

How long has this problem existed. We know that William Clay Ford started letting engineers design starting in 2000. Profits started to appear in 2008 and 2010. Ford did not need government loans to survive because, while still losing money massively, William Clay knew products designed by patriots (car guys) would appear some years later.

In 2000, innovators replaced liars (bean counters). We are observe superior products designed by people who have driver's licenses. But that will not change 40 years of hate promoted by bean counters who blame everyone except themselves.

How can Detroit survive when concepts taught in the business schools (communism) and rhetoric believed by the most easily brainwashed (wacko extremists) refuse to admit they are the problem? Why do so many GM products need 2 and 4 extra pistons to do what patriotic cars from Japan, Korea, and Europe do? Unions had nothing to due with people educated in concepts found in communism, mafia, and fear. Reality (and the reason for Detroit's crappy products) is directly traceable to stifled innovation and wacko extremist who would protect such evil.

We are still many years away from patriotic American products (with Chrysler nameplates) designed by Italian engineers. We still have no GM products designed by American engineers. After decades of stifling innovation, Detroit is just another trophy of the business schools Wacko extremist rhetoric would blame everyone else.

[Adak]

You bring up two important points:

1) The unions role in the US car makers.

2) The role of the upper management and directors.

I believe it's clear that upper management and directors were incredibly stupid and short sighted, on the whole.

The Ford Mustang for example, was planned to be the Ford "Carnation", and built something along the lines of the old "Cosmopolitan".

If memory serves, it was Lee Iacocca, when he was at Ford, who was able to kill the "Carnation", and bring in the support for the Mustang.

Because he knew cars, and he knew drivers, and what they wanted.

But I was focusing on the role of the unions in the destruction of the US car makers - and to the socialist policies of Detroit, that drove them to bankruptcy.

Originally Posted by tw

Detroit was heavily unionize in the 1950 and 1960s when Detroit was so innovative, became productive, and was profitable. What changed? By the 1970s, all top management was replaced with business school graduates. Top management in Detroit (ie Henry Ford) did not even have a driver's license. Top management was so ignorant that 2x4s were placed under the accelerator of the first Saturn. So that Roger Smith could not press that accelerator. Smith also did not know how to drive a car. So we should blame that on the unions?

In the 1950's, the unions were certainly popular in Detroit, but they weren't that strong. They weren't NEARLY as aggressive, or as organized, as they became in the 1970's and later decades.

Since 1981 the average number of days lost per worker each year to disputes was just over 9% of the number lost in the United States.
http://en.wikipedia.org/wiki/Labor_unions_in_Japan

When the UAW joined with the AFL-CIO, and finally found out they could, through careful targeting and close cooperation with all other AFL-CIO unions, close down ANY car maker that failed to yield to their wage + benefit demands (regardless of the sales and profits of that year), then it didn't matter WHO was the President of the car company.

Even Lee Iacocca, could BARELY keep Chrysler in the black - primarily helped in those years when he had concessions from the unions, AND had a good model car to sell.

When the unions can dictate what their salaries and benefits will be, to management, the company is doomed. Perhaps their greed will be restrained for a little while, but before very long, it will rear up, and swallow the company.

No doubt.

When the unions can strike, and close a business that is vital to the industry or the country, it's time to change the laws regarding unions.

I'm reminded of the FAA flight controllers strike in the 1970's. They were going to shut down every major airport in the country, if they didn't get their demands met. We had just had a disastrous 4 years under the Democrat Jimmy Carter, so our country was a complete mess - gas lines, our Embassy personnel held hostage for a year by Iran, etc.

And now the flight controllers want a raise, or they'll completely cripple airline traffic. Airline mechanics, pilots, etc., wouldn't cross their picket lines, since they were unionized, as well.

So Ronald Reagan fired every one of those flight controllers who wouldn't return to work. Support for them disappeared, almost overnight. Problem solved!

With the city of Detroit, it was their giving into their workers unions, instead of the UAW, but they were all AFL-CIO.

You simply can't give in, and you can't defer payments of the agreed upon pensions, etc. and hope to stay a viable city or company. We've seen that in city after city, and in company after company.

[tw]

Originally Posted by Adak

Even Lee Iacocca, could BARELY keep Chrysler in the black - primarily helped in those years when he had concessions from the unions, AND had a good model car to sell.

Lee Iacocca replaced much of Chrysler's top management. Then let engineers design the cars. He then scrapped most of an existing design subverted by corrupt (bean counter) management. And let the unions design much of a new assembly line. He did what even W E Deming recommended. By eliminating the only problem - top management, then Chrysler repaid all their loans in less than three years. Followed by record profits. He fixed the only reason for financial hardship - top management.

Marchionne did same in heavily unionized Italy. He fired all management in 60 days. And no employees. He quickly made Fiat so profitable that he could buy Chrysler and almost bought Opel.

Extremist rhetoric wants to blame the victims - the employees.

Exactly what happened in Hostess. Unions took wage cuts. Then scumbag management secretly gave themselves record bonuses on top of salaries that were increasing something like 10% every year. After all the purpose of a company is profits to top management.

How did Fox New report those realities? The political agenda often blames the victim. Be it immigrants, gays, women rights, minorities, employees, Muslims ...

Same exists with Martin. A victim is blamed by lies that say he was inside his girlfriend's house boosting he was going to 'get' that creepy ass guy. Another example of blaming the victim for a political agenda. We know where that myth came from because of what Fox News and other extremist propaganda machines (ie Limbaugh) are designed to do. Lie.