Re: Time to drastically cut autoworker salaries, benefits

Jimmy wrote:
Brent P wrote:
In article <pZKdnVymhdIjlfbeRVn-jA@xxxxxxxxxxxx>, Michael Johnson, PE wrote:



Both of you guys (Brent and Michael) are engineers but you guys are mired in discussing things as they exist today.

A couple of factors I think you are missing. First is the ability of the US government to inflate or deflate the currency as it sees fit. I'd like to point out that in the early to mid 1980's, the Japanese yen was 250-275 yen to the dollar IIRC. Today it is about 108 yen to a dollar. (Figures off the top of my head..but you're all engineers here..."close enough" as most of you say) Japanese goods are much more expensive today than they were in the 1980's, hence Japanese companies have found it cost competitive to build factories for Toyota, Nissan and Honda here in the US.

Today the Chinese Yuan trades at a fixed rate of 8 Yuan per buck. This will not last forever. Eventually either China floats the Yuan or a trade war breaks out and Chinese goods get the *** taxed out of them and the next country (probably India at this point in time, but who really knows...anything can happen...another 9/11....unexpected conflict or major war with China over Taiwan, North Korea, Iran or Syria or major uncontrolled disease pandemic ala avian flu) If (most likely when) Chaia floats the Yuan, Chinese goods will be more expensive in the way Japanese goods have. So trade with China, and eventually India is not *ALL* that bad. I say not *ALL* that bad because China is still communist and still has controlling interest in *ALL* business entities. The communist Chinese goverment owned 51% of most if not all major industries. And here's the rub (simply as I see it...)

Asymmetrical warfare...we may be engaged (even unbeknownst to us) in a war with China, where they finance our insatiable debt (the Japanese are also a major purchasor of our debt). They (our debt purchasors) are financing our housing/real estate boom. So those home equity lines of credit used to finance the purchasing of crap from walmart etc....the free ride is financed by Chinese communists. And while some may think I need to adjust my tin foil hat (AFDB design here - http://zapatopi.net/afdb/ ) the Chinese Peoples Liberation Army (PLA) (you remember them - in 1989 they put down the protest in Tienamen Square) has produced a document in 1999 called "Unrestricted Warefare" by Qiao Liang and Wang Xiangsui.
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Link to PDF version:

http://www.terrorism.com/documents/TRC-Analysis/unrestricted.pdf

Google Unrestricted Warfare Qiao Liang and Wang Xiangsui for similar resilts.....

But getting back to the issue of free trade, and US manufacturing I think free trade is good in some respects but we need to keep an eye out and not sell our souls for cheap toys, shirts and shoes.

IMO, the trade between the USA and the rest of the world will continually adjust and morph as conditions require. It is China that is loosing the "war" with the USA since they are embracing capitalism and running away from the economic models of communism. Ultimately the political side of the country will follow the economic side and they will become a freer nation. Personally, I'm happy to see them take things slow from a political aspect since having a billion+ people running around uncontrolled would be a very bad thing. China is headed to the same place Russia has gone except they are doing it in a slower more controlled manner. China had better stop worrying about the USA and take notice of what India is doing. IMO, India is in a great position to take a huge bite out of China's ass economically. India and China will be competitors for the worlds manufacturing needs and you know what good competition is for a free market. ;)

Still the fact is that we can't keep a high standard of living by manufacturing many of the items we consume. All one has to do is look at the countries that are heavily promoting protectionist policies and see their economic stagnation and high unemployment to know it is not a correct path to take here. If we make sure the playing field is as level as possible between us and our major trading partners then I have no doubt we will be more than competitive.

Interestingly, this months Hemmings Classic Car (#14, Nov 2005) has on its cover "Detroit Goes to War". On page 21 it says:

"In hindsight, the extent of the auto industry's contribution to the war effort [Note - WWII to you youngins] is staggering to contemplate. Consider that between 1918 and 1935, only 35 tanks were produced in the United States. By the end of WWII, the tank production total was more than 88,000. Between Pearl Harbor and the surrender of Japan, nearly 275,000 aircraft were built. But perhaps the most telling impact is this: In 1939, less than two percent of the United States' gross domestic product was devoted to military production. By 1944, the corresponding GDP figure was 40 percent."

We beat the Germans AND the Japanese in less than 4 years of entering WWII (granted with ALOT of help from other Allies - Notably the Soviets and the British)

If all your industrial manufacturing is overseas, the unineteded consequences are devastating to national security. Especially if the Chinese are trying to outmanuver us via whats called Asymetrical warefare (computers, economics, induistrial espionage etc) Move enough stuff overseas there'll be NOBODY here to build the weapons needed to protect us.

You might be right if future warfare were to be fought like the last two world wars were fought. The proliferation of nuclear weapons has made conventional warfare on a world wide scale very unlikely. You want to know the best way to keep the crime rate down? Give everyone a gun. This is what nukes do for countries. Do you think we will invade Korea like we invaded Iraq? No we won't because they have nukes. Why hasn't India and Pakistan had a knock down, drag out war that would have cost millions of lives? It is because both sides have nukes. I doubt we will ever be in a position again where we will need to manufacture massive amounts of arms like we did in WWII. A handful of nukes is all it takes to equalize the playing field militarily. Nukes prevented WWIII between us and the Soviet Union.

In todays world economic strength is as important as military strength. If we force manufacturing jobs to remain here on a large scale then we will weaken economically and become less competitive in the world markets. We will marginalize ourselves and wield far less influence globally. This would cause us to be far less secure than loosing some sectors of manufacturing. IMO, the greatest strength of the USA is ability/freedom we give our industries to react and change to conditions of trade and global economics. If we ever change this then we are going to suffer the consequences.
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