Jim, I don't think it was a shoe factory. I think it was PolarTec a manufacturer of very good insulated clothing. (I have several of their jackets and vests.) Unfortunately they were not able to remain competitive with imports after they rebuilt. Now we can go to WallyWorld and get it cheaper. Not sure you should wear them without a protective barrier though.

My purpose in posting these numbers was not to place blame or understand causes, but to simply state the current condition of the automobile industry. To me this is an example of how EVERYTHING is wrong with the industry. Please remember I was one of the CFO's reporting results for a major manufacturing company. I understand the difference in fixed and variable cost. Direct and indirect labor. Raw Material Cost, Labor Cost, and Factory Overhead. Cost of Sales above the line and General Administrative, Selling, and Interest cost below the line. The one word answer to the question.. Did the U.S. Auto Industry lose over $10,000 on every vehicle it manufactured and sold in 2008? YES.

I was also trying to reduce a very large number that the majority of Americans cannot comprehend. To say that Chrysler lost $16.8 billion last year is just a number to most people. The same people understand the problem when it is restated to $11,561 per vehicle.

Now while on this stump let me rant further on the state of affairs. Most people know what the Balance of Trade is, but do they really understand it's significance? Since 1971, the United States has been a Net Importer of goods and services and has run a negative balance in all but two years, 1973 and 1975. Can anyone remember the Oil Embargo? How much has this negative trade balance amounted to in the last 37 years?
$7.1 trillion dollars ($7,110,309,000,000). How much money is that? $23,428 for each American Citizen, all 303,500,000 of us, every man, woman, and child. This is money that has been transferred from the wealth of the United States to other countries that will never be returned.

It is almost as if we made a decision about 50 years ago that we did not want to be a source of manufacturing. We have transferred those jobs out of the country in an almost systematic manner industry by industry. The steel industry, the textile industry, the apparel industry, the electronics industry, and others no longer have a significant manufacturing base in the United States. Our emphasis has been on our intellect, we are going to make a living with our brains. Our colleges and universities turn out lawyers, accountants, bankers, and others who do not make or manufacture a single product or add anything to the economy.

Oh well that's enough. STILL THE BEST PLACE IN THE WORLD TO LIVE.

God Bless America

Nick

I'm constantly amazed at the information that is available to me as a member of this wonderful site. More info than I have read or seen or otherwise been exposed to in other media's.

Nick, the problem doesn't go back quite 50 years. Until 1970, our balance of trade was positive. The first negative balance occurred in 1971, & the first big one hit in 1977. The really big ones began in 1984, & have continued ever since.

I'm not enough of an economist to connect the dots, but there has to be a relationship between our trade balance & the advent of the neoconservative ideology of uncontrolled greed, & the concurrent application of Reaganomics which had these 3 characteristics: a) cut taxes, b) increase spending, c)borrow to cover the shortfall.

The result of the latter is demonstrated by history: Under 7 presidents post-WW II, our national debt relative to our national income, declined from 117% in 1946, to 33% in 1980; this despite Korea, Vietnam & the cold war. Those 7 presidents all practiced fiscal responsibility.

With the advent of Reaganomics, our national debt climbed from 33% at the beginning of Reagan/Bush, to 67% at the end. It declined to about 59% over the the Clinton years, but with the G.W. Bush tax cuts, it climbed again until it reached about 70% at the end of Bush's presidency.

Google "national debt graph," & you can follow the line. it is fact. You can believe the rhetoric that follows it, or not, as you choose.

In dollars, our national debt climbed from $909 billion in 1980 to nearly $11 trillion at the end of G.W. Bush.

It will continue to climb as Obama invests in infrastructure & human needs neglected in the pursuit of short-term private financial gain over the neocon years..

The Reaganomic fallacy permeated our private lives as well, & a lot of people are hurting from its collapse. How & whether we survive remains to be seen, but I am ever hopeful about the American ship's ability to right itself.

Nick, thanks for making these numbers real to me. And Olroy, I appreciate your comments as well. There are many excellent businessmen in this country still trying to make 'things', but the question I have is "How did we ever let this happen? Didn't anybody see where we were going?". I, too, am hopeful because Americans have the courage and strength to work their way out of this. My last question is, "How many generations will it take?".

General Motors update. First quarter, 2009 losses were $6 billion ($6,000,000,000) on unit sales of 406,770. Loss equals $14,750 per unit. General Motors losses since 2005 now total $88 billion ($88,000,000,000).

You decide if they are turning it around.

Nick

Don't GM's losses include those of subsidiaries like GMAC?

Question and comment......First question - with Chrysler - does that include Dodge....and what will happen with all those extended warranties???

Comment - looks like they need to sell a jet or two....

quote:

Originally posted by noble97monarch:
Most CEOs, accountants, & corporate lawyers I know follow the federal guidelines pretty darn closely. Why? because it's our skin that gets fitted for pinstripes if we're wrong and caught!

I think you actually hit the nail on the head without aiming at it!
I would rather the high level management folks focus on what is morally right vs what the law says is right (for several reasons) –
1) Laws are enacted by Politians (enough said)
2) ‘legal’ loopholes are everywhere – its still the wrong thing to do even if there is no law against it.

Since you got me started…
The second part of the problem is fixation on short term gains. Long term gains and stability are not as easy – short term gains can be fabricated if there is no concern with long term stability.
The third part? Our society rewards risky behavior, in fact more than rewards it, its endorsed through sports, entertainment and the world in general. As far as I can see good old fashion hard work is not considered a plus anymore – in fact I believe that many consider hard workers as ‘dumb’ because they are working hard and not smart (smart is taking advantage of loopholes, short term gains for personal profit and profiting from other misfortunes). ‘Smart’ CEOs can structure their deals so that they are richly rewarded for risky actions that work and not penalized for failing.
The forth part? And this is the one that makes me feel like I am turning the corner to ‘old fart’ membership – it seems that the main product being consumed (and therefore appreciated) by society is entertainment. 30 years ago most folks could name leading scientists (Einstein, Hawkins, and the older ones – Davinchi, Newton, and such), astronauts, architects and people that were creating things for the good of society. Now most younger folks can only name sports starts, rappers and TV/movie stars – basically entertainers. Society does not care about people that ‘make’ or ‘do’ things anymore – society just craves entertainment – and society finds risk behavior entertaining.
OK, enough of my condensed rant…I could ramble on for a lot more….

ccctimtation and T&T&B, I'm sure the results include all subsidiaries and all product lines. The losses are reported on a consolidated basis and are not broken down by subsidiary or product line. For purposes of this discussion I don't think it makes a difference.

I agree that it makes a HUGE difference if you are in management of the company in order to attack the problems at their source. Attacking labor cost would not help if the problem is fixed overhead as an example. My fear in the case of the auto industry is that the the problem is in every component of cost.

Nick

Maybe the real price of our high standard of living is now coming home to roost. For decades, Americans have enjoyed a higher standard of living than almost any other country. It's been based on our compensation being higher than that of other countries. At some point in time, that makes outsourcing to lower cost workers very attractive.

The saga continues. It appears fairly certain that General Motors, or is that Government Motors, will file bankruptcy tomorrow morning.

The latest estimates are a total cost to the government (that's you and me) will be $60 billion. $60,000,000,000.00 General Motors is expected to employ 60,000 people after the bankruptcy. That means it only cost the government (that's you and me) $1,000,000.00 to save each job that will pay about $40,000 a year after the restructuring. We could just give each employee 25 years severance pay and save money.

After the restructuring General Motors will be more than 90% owned by the government and the UAW. I was wondering, if the union goes on strike, will the union be on strike against the union?

Nick

I WAS A DIEMAKER FOR FORTY YEARS.WHAT IS INVOLVED IN MAKING A CAR IS NOT JUST ONE ITEM EACH HAS TO BE MADE IF YOU WANT FOR INSTANCE A AIR CONDITIONER YOU HAVE TO MAKE A DIE FOR IT. A DIECAST DIE RUNS ABOUT 100,000 CASTINGS TIMES FOUR CAVITYS
FOR PIECES PER SHOT TOTAL COST FOR ONE PEICE OF THE AIR CONDITIONER IS ABOUT $120,000 AND THAT IS ONLY ONE DIE YOU NEED AT LEAST 10 DIES TO SUPPLY THAT PART MULTIPLY THAT BY BY HOW MANY CARS NEED AIR.AND HOW MANY PARTS GO INTO A THE AIR CONDITIONER
LENNY

quote:

Originally posted by lenny and judy:
I WAS A DIEMAKER FOR FORTY YEARS.WHAT IS INVOLVED IN MAKING A CAR IS NOT JUST ONE ITEM EACH HAS TO BE MADE IF YOU WANT FOR INSTANCE A AIR CONDITIONER YOU HAVE TO MAKE A DIE FOR IT. A DIECAST DIE RUNS ABOUT 100,000 CASTINGS TIMES FOUR CAVITYS
FOR PIECES PER SHOT TOTAL COST FOR ONE PEICE OF THE AIR CONDITIONER IS ABOUT $120,000 AND THAT IS ONLY ONE DIE YOU NEED AT LEAST 10 DIES TO SUPPLY THAT PART MULTIPLY THAT BY BY HOW MANY CARS NEED AIR.AND HOW MANY PARTS GO INTO A THE AIR CONDITIONER
LENNY

And if you can't sell the pieces for more than they cost---You go out of business!!!!!!!!!!!

Nick

This should stir the pot a little.

Our main problem in this country are MBAs now running the show.