Corporate Beggars Won't Go Hungry In A "Free" Market

This week, GM annouced it would slash 30,000 jobs and stop production at 12 plants.

In October, Ford Motor announced a quarterly loss of $284 million, and its chairman and CEO, Bill Ford, said the company’s restructuring plan, currently being discussed with the UAW, would include health care benefit changes and “significant plant closings.”

Tacitly alluding to GM and the demand of auto parts maker Delphi, currently under bankruptcy court protection, for wage cuts of up to 60 percent, Ford said, “Our industry is beginning a dramatic restructuring which is sorely needed.”

Brother Can Loan Me A Dime?
And while the pension pit grows at Ford, chief executive William Clay Ford Jr. has collected $53 million over the past three years. At GM, G. Richard Wagoner Jr. got $40.7 million over that period.

In January 2002 Mr. Ford announced a plan to restore the company to strong profitability by mid-decade. His revitalization plan is focused on improving quality, lowering costs and delivering exciting new products to customers. In the first year of the plan the financial performance of the company improved by nearly $5 billion.

"Our quality is up significantly, our costs have been reduced substantially and we are introducing the biggest wave of new products in our history," he says. "But as proud as we are of what we have accomplished so far, we our accelerating our efforts."

Corporate greed math 101
GM's Wagoner and Ford are each being paid approximately $15.5 million each a year. Both companies are on a down hill slide. In 2002, Ford said his company would be profitable by mid-decade -- it ain't. I'm sure I can dig around and find some glamourous quotes by Wagoner about his corporate alchemy skills and ability to turn manure into gold...

Does anybody have a clue why Ford would pay Bill Ford $15+ million annually? He has no experience as a CEO. Wouldn't you think they'd pay a rookie CEO minimum CEO wage? Maybe that could be a clue as to Ford's problem. Ditto for GM.

Last Tuesday, Bill Ford gave a speech in Washington at the National Press Club. He said, "Now more than ever, with the competitive pressures of globalization, America needs to respond to the economic challenges of our time...This is not the moment to stop investing and concede our competitive edge in vital parts of the economy. Just the opposite, we must take the lead and show the world that there is only one, true innovative manufacturing giant. And it has three initials:U.S.A."

You can almost hear the Press Club attendess gagging on their spoons...

Corpoarate welfare state
Ford urged Congress to offer a package of tax incentives to drive innovation in the auto industry that will help make the nation less dependent on foreign oil. He also like tax incentives to convert old plants into high-tech facilities.

Maybe he could get Congress to put caps on the amount of executive pay...

In September, Ford launched a campaign to promote its plans to produce 250,000 hybrids a year by 2010 -- more than 10 times the number currently produced. It says it will produce 250,000 ethanol-capable vehicles in 2006.

Let me see, wasn't it 1974 that we had the first "oil crisis?" That's 31 years ago. The 1966 Olds F-85 I was driving at the time got around 18 MPG. May 2001 Tarus wagon gets around 30 MPG on a recent trip to Denver. When I'm in a parking lot, I'm surrounded by Suburbans, Excursions, Expeditions, F-150 and a host of other American-made gas guzzlers...and this is 31 years after the first "oil crisis." I suppose this is the fault of the American consumer...

Those foreign names like Honda, Nissan and Toyota seem to have plenty of sedans and small SUVs that get excellent gas mileage. In September, I heard a Ford VP on the radio saying the reason Ford dosen't have more hybrids is because the Japanese are hording the technology. Don't they have an R&D department at Ford? Did they cut costs in R&D to increase the marketing budget?

Of course we know who will be taking the hit on this "restructuring" of the auto industry. Actually, it appears that only the American-made portion of the auto industry needs restructuring. How much money have GM and Ford spent on retooling their US facilities? How much have they invested "offshore?"

Ford Goes to Mexico
In 1986, Ford build a new assembly plant in Hermosillo, Mexico. According to the Ford corporate web site, the Hermosillo plant currently building the Focus ZX3, ZX5 and SVT, the plant is expanding to produce Ford's new midsize car for 2006. Not only has the focus of manufacturing changed over the years at Hermosillo, but also the relationship between the assembly plant and the local community.

As a result, Hermosillo attracted workers from farther away, and the employee mix included more older and married workers. Hermosillo officials responded to the changing work force by offering affordable housing to employees.

Employees Need Housing, Tranportation & Schools
"Ford built 500 houses, essentially a new community called Nuevo Hermosillo," said Felix Guillen, Ford director of manufacturing operations in Mexico. "The 600-square-foot homes are rented to employees on a rent-to-own basis. Employees pay a percentage of their salary as rent for approximately eight years. After that, the employee became the owner of the house. Currently, 93 percent of the renters have become homeowners."

All those employees living in all those homes need to get to work, and the Hermosillo plant is also involved in local transportation. The company runs a bus service to the plant, which serves not only as employee transportation, but also relieves some of the traffic burden from the city.

And if a community has jobs, homes, transportation and families, then it also needs schools. Ford and its dealers are only too happy to oblige. Since 1966, Ford and Ford dealers have built more than 200 elementary schools throughout Mexico. Fourteen of those schools were built in Sonora, home state to Hermosillo.

The Heart Has Two Chambers
Sounds like the big part of Ford's heart will be living south of the border...

...Ford's heart north of the border will be applying for a type of health insurance known as corporate welfare. Ford's workers up north are losing their homes and watching their schools crumble. It's all part of the "free" market economy.