Rudy Giuliani Trashs Unions

Rudy Giuliani was on Morning Joe this morning and all the Country's ills are due to labor unions according to him. One of his examples was that we own GM and only kept the company afloat to appease the UAW. He then complained that Obama owned the banks and was controlling salaries. What kind of up-side-down world does Rudy live in? First of all -- BUSH bailed out the banks and there were NO salary controls connected to the TARP funds. Secondly -- the UAW took HUGE concessions repeatedly and additional concessions were demanded as a condition of extending TARP to the auto makers. The unions were thrown under the bus while Wall Street fat cats kept their precious.

Giuliani is so dishonest that he makes me mad. Why does the MSM give him a microphone to peddle his lies?

Another Extortion Attempt

Via Commercialappeal.com:

FedEx could cancel contracts for $6.7 billion in American-made planes if Congress makes it easier for unions to organize the delivery giant's workers.

In a Securities and Exchange Commission filing on Friday, the Memphis-based delivery company disclosed that future commitments to buy Boeing 777s are contingent on FedEx Express' continued coverage by the Railway Labor Act.

The disclosure serves as a warning to lawmakers seeking to put FedEx Express workers under the National Labor Relations Act, a move seen as helping the International Brotherhood of Teamsters and rival UPS.

The Seattle Times calls it this way:

FedEx said it may not buy 30 more Boeing 777 freighters if a federal law is changed to make it easier for its employees to join a union.

Following through on those orders and options, with a list price of $7.7 billion, depends on FedEx employees continuing to be under the Railway Labor Act, the company said.

That law, which covers FedEx workers because the company was founded as an airline, requires a national vote if employees want union representation.

Legislation approved by a U.S. House panel March 5 would make it easier for drivers of Memphis, Tenn.-based FedEx to vote locally to join unions, by placing the company under the National Labor Relations Act.

FedEx's larger rival, United Parcel Service, backs the proposed change, saying it would even the playing field. About half of UPS' employees belong to the Teamsters union, while FedEx's only unionized group is its pilots.

The Teamsters have been trying to win representation of FedEx drivers for years.

"If the regulatory and congressional environment remains hostile, there is virtual uncertainty over how we'd proceed," FedEx spokesman Maury Lane said Tuesday.

The change would "stymie competition and create an economic roadblock to recovery," he said.

"FedEx is an important Boeing customer and we understand the company's concerns about the proposed legislation," said Boeing spokesman Jim Proulx.

Did you catch that? UPS drivers have been members of the Teamsters for years. They seem to be able to do business just fine.

FedEx, Boeing, and GE are now resorting to extortion to get their way. I guess they figured lobbying and campaign contributions were no longer effective bribes.

UPDATE 3-26-09
Puget Sound Business Journal is also covering this story.

FedEx Corp. is dangling the possibility of canceling a multi-billion dollar order for new airplanes should Congress help its workers unionize.

The Memphis-based carrier noted in its third quarter filing the with SEC that in January it exercised its option to purchase 15 additional Boeing B777F aircraft and got an option to purchase 15 more.

Apparently that contract had some hefty clauses that were alluded to in the earnings report.

“Our obligation to purchase these additional aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act,” according to the filing.

Get that? They wrote it in the purchase contract! Screw labor!

Sanctimony of Contracts

Obama's top economic adviser, Larry Summers, was on This Week today.

George Stephanopoulos asked him

We learned, overnight, that the insurance giant, AIG, which has received $170 billion taxpayer dollars will start paying out today $165 million in employee bonuses. . . a lot of people simply don't understand, how can this be, especially when these bonuses are going to be going to the financial products division of the company which brought the company down?

Summers responded

George, look, there are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous, what that company did, the way it was not regulated; the way no one was watching, what's proved necessary is outrageous.
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.

Where is all this concern for contracts when it comes to labor contracts like the UAW? How come mortgage contracts are off limits when they talk about "cram downs"? What about the State of Washington's contract with it's workers on pay raises?

Why are bonuses to folks who bankrupted their company so privileged for this contract protection? I'm sick of this class warfare.

UPDATE 3-16-09
Glenn Greenwald has an excellent post about this today. Also, don't miss Aaron Zelinsky's solution to the problem at Huffington.

Romney is (Still) a (Dangerous) Idiot

Former Governor Mitt Romney was on Meet the Press this morning. He again reaffirmed he's an idiot. He said:

... Right now, those companies (General Motors, Ford and Chrysler) suffer about a $2,000 per automobile cost disadvantage. Part of that is labor, part is benefits and part is a legacy cost associated with retirees. As long as that $2,000 disadvantage is on their back, they can't be competitive.

How can this man walk around without assistance? Does he notice that even though the auto companies (including the Japanese and other imports) can't give cars away these days? It doesn't matter if the cars cost $2000 more or less. Price isn't the reason cars aren't selling.

Then he reinforced the BIG lie:

Labor costs, labor costs, legacy costs--labor costs and legacy costs and benefits are $73 an hour.

. At least Governor Grandholm was there to dispute it but David Gregory didn't give her a chance.

Romney's other big lie was joined by fired and disgraced former TI CEO Carly Fiorina and wined about how the credit markets have dried up.

We have a recession, a deepening recession right now because credit is unavailable.

Bull shit. The problem is that people are scared to spend or buy right now because they don't know if they'll have a job next week. There's money to lend but a lack of credit worthy folks looking to borrow.

Idiot Romney and fired and disgraced Fiorina can whine about high wage workers and how they need a tax cut all they want. They are both a joke just repeating old outdated Republican talking points.

Auto Company Bail Out

I grew up in Detroit and still have friends that work in the auto industry so I've been watching the events surrounding this bail out with a lot of interest. I have so many emotional responses that it's hard to come up with a cognizant solution or overall opinion. Here's some of the facts and issues I'm struggling with:

- The troubles at the auto companies weren't sudden occurrences like the executives testified to this week. They have been on a downhill slide for awhile -- at least 2006.














- The market for auto loan backed securities is still working and hasn't dried up like they said.
- Credit unions started experiencing declining vehicle lending beginning in 2005 so this wasn't a sudden occurrence.

- Imported car sales exceeded domestic auto sales in July 2008 but they had been gaining market share for decades

- GM had the exclusive patent on the hybrid engine and decided in the 90's to license it to Honda and Toyota. We know where that went.

- Since 1990 US automobile manufacturers have spent $59.8 million in lobbying and influencing Congress (including PACs and direct contributions. Add another $198.6 million from auto dealers.

- The GOP 2008 Platform targets and blames unions for our economic problems
and we could see the anti-union/labor commitment from Republican members of the Senate Committee on full display during the hearings.

- The Detroit Free Press describes the impact on the number of workers best (also check out their great interactive map):

The automotive industry directly employs more than 2 million workers in the United States. That is more than 43,000 workers, on average, in every state, and includes employees who engineer, build, distribute and sell both foreign and domestic cars and trucks. In all, those jobs generate $65 billion in income for those workers, or about $29,437 per job. While Michigan is the top state for automotive-related employment, with more than 240,000 workers, even Alaska employs nearly 2,500 workers in the auto industry.

- But I think Daniel Gross interprets the testimony right:

But it almost doesn't matter whether the Big Three file for Chapter 11 protection. To a large degree, the markets are treating the auto companies as if they're already in bankruptcy.

The sad fact is that the U.S. auto industry has essentially failed. Even if car sales come roaring back from their current anemic pace next year, there's no guarantee the Big Three will return to health, that they'll be able to stay current on debt payments and raise capital from tough-minded investors. The executives and union leaders speak as if the bailout money is simply needed to tide them over until the sun comes back out. Exuding and instilling such confidence is a big part of their jobs. But increasingly, it seems that the federal funding they're requesting is necessary to help manage failure, not to stave it off.

So what do we do? Do we have every man, woman, and child in the USA give them $115 so they can dissolve the companies in an orderly fashion? I guess we do -- otherwise we shock the economy into a depression and it may take us decades to recover. This way, for $115 we might be buying some time so these 2 million workers can be absorbed in other industries. A slow death is preferable to the quick death of bankruptcy.

But PLEASE let these CEOs be banned from EVER managing anything ever again.

Spineless Democrats

From AP: "Democratic congressional leaders say they are prepared to return to Washington next month to continue a post-election session and approve federal loans to the automobile industry if automakers submit plans to restructure by December 2.

"Until they show us the plan, we cannot show them the money," said Speaker of the House Nancy Pelosi.

Senate Majority Leader Harry Reid echoed the comments."

What a crock! What skills and expertise does Nancy Pelosi have to evaluate a plan to restructure? If the auto companies had a good viable plan, they wouldn't need the Federal Government to bail them out, there would be investors lined up around the block. What her request REALLY is -- 'please cover our butts to our constituents -- make it look like we're not just caving in.' Meanwhile she's doing the car company's bidding and driving the last nail in the coffin of organized labor. Labor has given up more than their fair share of concessions for the past decade and it was obvious from the testimony of the auto company executives that they are clueless and unmotivated to accept any personal responsibility.

It drives me crazy when the auto executives (and now Senators Levin and Stabenow) try to blame the credit markets for slow sales. Have any of you noticed a line of folks wanting to buy a SUV or other car but can't because no financing is available? No -- banks and credit unions would be thrilled to make good car loans. I heard last week the auto auction market has crashed -- banks can't even unload repo'd vehicles at the auction yards because consumers do not recognize ANY value to a cars currently.

Oh, we'll bail out the auto companies for a few more years but we shouldn't. They should be forced to come up with a REAL reorganization plan. If they did, real investors would be clamoring to invest in these companies. We are feeding and enabling the junkie executives and delaying their need for rehab. Unfortunately, organized labor is going to be the victim here -- all of those auto executives will pillage all they can from their companies and then retire with a HUGE settlement. Meanwhile, the hundred of thousand of workers who agreed to deferred compensation when the auto companies needed them in the past will be reneged on. Pensions and health care plans that were the deferred compensation these hard workers agreed to will be scrapped.

Thank you Nancy Pelosi! May I have another . . .