Tuesday, November 25, 2008

those who don't know history.........

Starting with this posting, we will occasionally go back over some history books for parables that work for our time.

Today's tale, how industry, and in particular, the auto industry, handled the early days of the Great Depression.

The following passage is from the book "Franklin D. Roosevelt and the New Deal" by noted historian William Leuchtenburg. It's page 21, if you're reading at home, from the paperback version of this 1963 classic.

"At a time when millions lived close to starvation, and some even had to scavenge for food, bankers like Wiggin (note: Albert Wiggin was the Chase National Bank President, a man who shorted his own stock) and corporation executives like George Washington Hill of American Tobacco drew astonomical salaries and bonuses. Yet many of these men, including Wiggin, manipulated their investments so that they paid no income tax at all. In Chicago, where teachers, unpaid for months, fainted in classrooms for want of food, wealthy citizens of national reputation brazenly refused to pay taxes or submitted falsified statements. (note: here is where it gets interesting, in 2008 terms) In Detroit, the hardest hit of any large city, Henry Ford set the standard for businessmen by shrugging off all responsibility for the welfare of the jobless. Detroit bankers, in fact, insisted that before the city would be granted a loan to maintain relief, it would have to cut relief pittances still further."

Today, while Ford is in the best shape of what once was the Big Three, it still clamors for bailout assistance. History is a wonderful guide, even if there have been moments between 1932 and 2008 that were less divisive for the industry and the workers, it's hard to ignore how Detroit intially responded to the throes of the Great Depression. Let's see what Detroit comes back to Capitol Hill requesting next week, after the Thanksgiving break. Let's just see, shall we?

Thursday, November 20, 2008

planes, trains, and definitely automobiles

Anyone catch that Congressional hearing with the Big 3 automakers on Wednesday?

You know the one I'm talking about. The hearing where each of the three once titanic captains of industry were reduced into the equivalent of a teenager asking for extra allowance to buy beer for a Friday night football game.

Yes, they were that dumb.

The hearing that was attended by just about every House member on the Financial Services Committee, telling anyone who knows anything about Washington that these legislative sharks smelled blood in the water.

The hearing where GM and Ford Presidents Rick Wagoner and Alan Mullaly refused to accept the $1 a year salary offer made by Chrysler President Bob Nardelli, losing a second offer by Congress to see if Detroit's leaders would grab onto a rhetorical lifeline.

The hearing where NYC Congressman Gary Ackerman delivered the line of the month (yes, I heard Obama and McCain on election night, but Ackerman has a clear winner here) with this full-frontal assault on these executives masquerading as 21st Century's three blind mice "There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands saying that they’re going to be trimming down and streamlining their businesses. It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. Couldn’t you all have downgraded to first-class or jet-pooled or something to get here? It could have at least sent a message that you do get it.”

And, yes, the hearing where none of the business bigwigs volunteered to take a commercial flight back home, following the hearing.

Who among us will be enterprising enough to spend some time at the private air terminal at Reagan National Airport, logging the tail numbers on corporate jets in order to see who is still burning company cash on expensive travel.

And this is about cars, the future of American industry, and the American worker? No wonder the Japanese auto industry, and now the Korean manufacturers, continue to lead the way with innovation and design.

Amtrak, anyone?