BCT Editorial – 11/27/05

This page was last updated on December 17, 2005.

Car wreck, Part 1; Editorial; Beaver County Times; November 27, 2005.

This editorial is full of socialist lingo and slant.

Below is a detailed critique of the subject editorial.

“Business seems to operate without discernable plan, minus grip on reality

“The horrible news that 30,000 more industrial workers will be out of jobs and General Motors Corp. will close 12 plants carried the headlines last week.

“To recap what’s being lost:

· 30,000 jobs, one-fourth of the company’s North American work force.

· Operations in Oklahoma City, Okla.; Ypsilanti, Flint and two in Lansing, Mich.; Spring Hill, Tenn.; Doraville, Ga.; St. Louis; Portland, Ore.; St. Catherine’s, Ontario; and close to home, West Mifflin.

· Reductions in Moraine, Ohio, which will lose its third shift next year, and Oshawa in Ontario, Canada, which will lose a third shift and one car plant.

· Pending another parts processing center closing, to be named later.

“All tolled, that’s a closure of 12 of 77 plants, about 15 percent of the facilities the automotive giant has been operating.

“Why? Because from January to September, GM lost almost $4 billion. Another way to look at it is a $23,121 loss for each of its 173,000 employees. That figure doesn’t account for life in the world of high gas and utility prices this fall.

“Why now? Slower sales and rising health care, the company said.

“Who are they kidding?

“Undoubtedly, the American auto industry has its share of troubles. Slipping sales seem to be the only tune played by American automakers since the muscle cars of the 1960s gave way to the energy crisis of the 1970s and the advent of imports.

“Yet, somehow, the need to rethink and cut back comes as such a shocking surprise that it’s not only necessary to lay off, but it’s necessary to lay off roughly the equivalent of every single resident in Moon Township plus every single person living in Center Township.

“Closing several plants and hundreds of jobs would be bad enough. But to lose thousands of jobs and a dozen operations is utter devastation.

“How could a business get to the point where so drastic a move is required? How could this seem to surprise company executives? How could GM’s daily losses follow any sound business plan?

“How could such an American icon let itself get to this point?”

[RWC] Note how the editorial lays the entire blame at the feet of company management. While company ownership is ultimately responsible for business success or failure, let’s not forget the role of government, union management, and the workers. While company management bought labor union and government peace by agreeing to unsustainable wage/benefit packages, work rules, and other business practices, everyone “whistled past the graveyard.”

Here’s an example of how ridiculous GM’s benefits are. Healthcare insurance premiums alone for RETIRED employees make up over $1,000 of the price of a GM vehicle! According to ABC News, that figure jumps to about $1,500/car when you include pensions. That’s $1,500/car for people who no longer work for GM. The figure goes up about another $500/car when you add in healthcare premiums for current employees.

“If the airline industry serves as the leading example, filing bankruptcy is becoming a routine business procedure, just like voiding contracts with workers or renegotiating terms. The volume of pension bail-outs is eventually going to sink the Pension Benefit Guaranty Corp., the fall-back federal agency.”

[RWC] The airline industry is the leading example? I could be wrong, but I believe the heavily unionized steel industry was the first to go this route. By the way, did you notice a common thread among the domestic steel, airline, and auto industries? All are virtually 100% unionized. It’s not a coincidence.

“The business future looks very dim for American workers and taxpayers, who seem to be held hostage, their financial futures tied to companies headed by executives who can’t seem to form and follow a viable business plan.”

[RWC] There’s no doubt company management deserves blame, but so to do government, union management, and employees.