Not everything foreign is good

The worst selling vehicle in 2008? The Hyundai Entourage. Why does this not get more press? Everything from the foreign auto makers is not gold. Ford has the best selling car and Hyundai has the worst - who makes better cars? Who responds to consumer demand?

Another Thought on Detroit

This is really just a follow up to the previous post, based on the same Yahoo article. I have often heard that the auto industry forced American's to buy gas guzzling vehicles. Not only do the previous statistics fly in the face of that statement, so do the manufacturers vehicle line ups. All three members of the Big 3 produce cross over vehicles aimed at the SUV crowd with an eye toward gas mileage. Chrysler and Dodge have the Pacifica and the Magnum; GM has the Acadia, Equinox, HHR, and SRX - each with 20+ highway MPG; Ford has the Edge and Flex. But "consumers have not embraced them as the new family car", sales are sluggish or dead. In fact Chrysler and Dodge will no longer be producing either of their offerings. Detroit did respond to the MPG issue, Americans simply did not purchase the vehicles, opting instead to stay with their traditional trucks and SUVs.

And the crown goes to...

As the year winds down, the number crunching beings and auto sales are no different. Recently the unofficial car results were announced. The best seller should not be a surprise - it's been leading the pack since 1981 - the Ford F150. And the number two? The Chevy Silverado. Ford's record stands in stark contrast to those that continue to claim the Big Three forced gas guzzlers down consumers' throats. A vehicle is not the best seller for 27 consecutive years by being forced upon consumers; it is the best seller because consumers demanded and purchased it.

Michael Moore and others of his ilk would like to use the government to force the Big Three to stop making "gas guzzlers." They would be killing the goose that lays the golden egg.

The Recession Hits Home

The good news is, I still have my job. My wife does not and neither do 11 of my colleagues.

For most of the year I have felt isolated from much of the economic turmoil that surrounds us. Often the CFO of my company would state that we are "recession proof". We all knew the numbers were down on both consumer sales and franchise development. I did not think MM would goose-egg consecutive months, but they did. Even as the gloomy numbers rolled in and I read about 3M slashing tens of thousands of jobs, I really did not see it coming to hit me.

For one thing, our department was down a man. Under normal circumstances there are seven of us in my department. One of our number moved onto some better things and we ran most of the year on six. We hired to fill the empty space, but she did not fit with the culture. Another colleague cut back his time to 30 hours so that he could pursue other endeavors. And another was out sick for at least two months. In order to adequately stay on top of our work, we had to hire some part time help whose importance and hours grew as we faced the changing shortfalls. So I considered there to be a surplus in our budget given the fact that we never were fully staffed. Then it happened.

Two full timers and our part time help got let go, along with nine other colleagues. In many respects the cuts made sense given the down economy, the poor numbers, and a tough year ahead. Also, Senior Management targeted the more recent hires in the department - although, not exclusively. Accounting lost their Controller; IT lost two folks, three if you count their intern, one of whom had been with us for quite some time; MM lost two, but really three because one of their number will be transferring to a marketing position; DC lost one, which represented 50% of that department; FD lost three, and the newest hire across brands stayed. As I mentioned, our department lost three counting our invaluable part time help. We are now effectively running at 50%. To make matters worse, one of our managers will be out of the country for the Christmas holiday and will be on maternity leave in May. And then there will be three. It was bad enough when we had one man out for two months. I don't know what it will be like three men down.

I understand the economic realities behind the cuts and even in some ways I understand the depth of the cuts. We are a fairly small place and I estimate we lost something on the order of 10%. I could second guess cuts and ask questions (Wouldn't you want your front line contact to remain fully staffed so no opportunities are missed, especially during the eventual upswing?), but I don't think that will do much good. What I can't understand in the least is the timing and the methodology.

We were two weeks and a day from Christmas. The timing could not have been worse. Everyone's Christmas is now impacted. Can I really enjoy the holiday knowing that my friends and colleagues no longer have work? Is the company really in so much trouble that they could not wait 21 days? I would certainly have let my Christmas bonus pass in order to allow my fellows to work through the season and I am confident many, if not all, of my co-workers would agree with me.

Finally, the methodology was completely contra to our culture. There was no warning, not even to department managers in some cases. Even Ford Motor Company gave their office workers notice that on day X cuts would be made based on factors Y and Z. There was none of that. Swiftly executed cloak and dagger. Log off and I will escort you off the premises, escort you off the premises!!. As a legal man, I understand the need for procedure, but I don't understand why the procedure could not have been different. Especially at a place where we welcome folks as "family". Why couldn't there been an announcement on Dec 10 that cuts were coming on Jan 5? Sure it puts a damper on the holiday, but it's better than not having a job for the holiday. And then we would have known it was coming and not felt betrayed. We may still have been surprised by the picks and the depth, but at least we would have been a little prepared.

I am upset and saddened and doing what little I can to help those I care about.

Progeny of Honest Abe

There has been much in the news today about the arrest of Illinois Governor Rod Blagojevich. Gov. Blagojevich succeeded Former Gov. George Ryan who is currently serving a 6 year prison sentence for racketeering and fraud. In Abe's case, the apples have fallen very far from the tree.

How does a state elect a two consecutive criminals to their executive post?

After reading through some of the DoJ press release, which I was grateful to find linked in a news article, I highly doubt Gov. Blagojevich will get out of this. The FBI secured warrants to tap a conference room, his office and eventually his home phone. That is a huge treasure trove of evidence. I hope he doesn't get off with a settlement or light sentence. There is little trust in government already; if the other branches do not police each other properly, this will only slide further.

Illinois, what were you thinking?

America's Youth

At the close of A Christmas Carol, Ebenezer Scrooge gives a boy on the street enough money for the butcher's biggest turkey and and a generous tip. Yet, in today's society, if one were to give someone on the street money to buy and deliver a turkey they are more than likely not going to get their turkey delivered nor see their money again.

Thoughts on the Pulpit

In today's homily, the priest discussed ritual and it's importance to worshiping God. Among other things, he noted that throughout human history we have performed ritual sacrifice. Animal sacrifice is, or was, very common, but he noted that human sacrifice was not as uncommon as we may presume. We may think of they Aztecs or the Mayans, exotic peoples, when we think of human sacrifice; the priest noted that the germanic tribes also practiced this level of sacrifice.

An atheist might say that the widespread nature of human sacrifice shows that Christianity is just one option among many. I would, however, disagree. For me, the fact that other religions fell into the sacrifice of themselves shows that they yearned for a deeper truth than the fragment which they possessed. It shows that outside of the Jewish tradition, and even outside of monotheism, humanity recognizes that what they owe God is more than they can give, that it will require all of them. It is no surprise, then, that Christianity calls us to daily practice self-sacrifice. Nor, moreover, that we find Christ - who as God is so much more than man - required to give all of Himself.

Incompetent Politicians

There is a lot of talk about the Big 3 these days and a lot of it comes from Washington. Take this from House Speaker Nanci Pelosi "We want to see a commitment to the future. We want to see a restructuring of their approach, that they have a new business model, a new business plan." (WSJ 12/3/08 A14) First, what business does not look to the future? Second, I am certain there is nothing a California lawyer can tell the Michigan Auto industry about how to form a business plan or run a business, let alone how to restructure one.

Politicians pass buzz word after buzz word while American manufacturing dies.

Truth in Art

In reading Wild at Heart and Captivating I am struck by the fact that John and Stasi Eldredge find truth in art. Multiple times they cite poetry, movies and music to make their cases regarding masculinity and femininity. Today we seek truth primarily through scientific or philosophical proofs. But Art has a venerable history of communicating important truths from the ancients to Nietzsche. It is wise to rediscover Art as a source and expression of truths.

Activist California Courts

The Citizens of California passed a ballot initiative defining marriage between man and woman. The California Supreme Court then ruled 4-3 that this law was unconstitutional. Just this November, the Citizens of California passed Proposition 8 amending the California Constitution declaring marriage between a man and a woman - thereby over ruling the Court. Now the Court will review the validity of this measure. This is a perfect case of Judicial Activism - the courts stepping in and clearly overriding the Will of the People - even after the people reasserted their position and over ruled the courts!

All this in a state whose domestic partnerships gives the rights of marriage, lacking only in name. Clearly, this is not a civil rights issue (in which case domestic partnerships would be enough) but rather an attempt to undermine marriage and the principles that underpin it.

Vatican as Defendant

Reported today in the WSJ is a ruling by the Cincinnati Circuit Court of Appeals allowing a lawsuit to move forward that may implicate the Vatican in the U.S. abuse scandal. My understanding is that the U.S. Bishops are fairly autonomous in matters of this detail, punishing or covering up for clerical abuse, and that the Vatican will not be liable. I see the latest step as simply a move to "go for the money" and I hope it fails.

Detroit in Washington

Today's Wall Street Journal features an article by Gerald F Seib relating the automakers' woes. Interestingly, he notes that UAW political power has been undercut by West coast environmentalism. He notes the number of Californians in power - Nancy Pelosi, Xavier Becerra, and Henry Waxman who ousted John Dingell from the chairmanship of the Energy and Commerce Committee.

I find it sad that the UAW, who consistently assist in sending Democratic Senators to Congress and have helped give Michigan to the Democratic Presidential nomine in the last three elections, has lost to the Greens of the Left. I only laughed at the overzealous envirnmental requirements of the DNC, but apparently they are impacting policy.

UAW

Many commentators are insisting that any money to the Big Three should require that the management be replaced. To cite just one example, a WSJ editorial by Paul Ingrassia on 10 November reasons that if GM, and by extension Ford and Chrysler, are deemed too big to fail then "it's also too big to be entrusted to the same people who have led tit to its current, perilous state and who are too tied to the past to create a different future." I agree that grand restructuring needs to occur and "that will mean tearing up existing contracts with unions" etc. It is not unreasonable to request management changes under such borad restructuring. But is too much attention being paid to senior executives?

All three autos are struggling. All three autos have lost ground to foreign companies. All three autos (and even some of the foreigns) focused on the "gas guzzling" truck market (Toyota Tundra). Yet the managers and executives of these companies are all different. In fact, for a number of years Chrysler was owned by the Germans. If the problem was Rick Wagner or the Ford family, then the companies would be facing different prospects. What is shared in common among the Big Three and none of the foriegns? The United Auto Workers.

To be fair, many commentators, Ingrassia included, are calling attention to the UAW. He notes, the "union stoutly defended gold-plated medical benefits" that consisted of "no deductibles, co-pays or other facts of life." Indeed, the union fought "to protect the 'right' of workers to smoke on the assembly line."

In my estimation, the UAW is much more at fault for the demise of the Big Three. It is the common factor to the auto companies - and the dead weight they are forced to carry. Ingrassia laments that "the current board of directors and management have stuck stubbornly to [an outdated] structure." But the UAW contract, which only in 2010 will equal the pay playing field, has largely limited the auto's ability to shed jobs and restructure in the changing global market. It is the Union, with their inch thick contracts, that has stuck stubbornly to an outdated structure.

I owe thanks to my wife for pointing out the universal nature of the UAW.

The Price of Gas

According to a piece of facebook flair (bad source, I know), the price of gas when President Bush took office was $1.46 a gallon. Gas is now 1.85 in Ypsilanti, Mi. While not back to the original level, a 39 cent increase over eight years is not too bad, approximately 3.3% per year - right near the average inflationary rate.

To me it's more proof that Presidents really don't have that much control over the economy. Remember that the Founding Fathers put the power of the Purse in the hands of the legislature, not the executive. (and even they have limited influence)

We will see if the prices stay depressed coming into January 20.

The Truth about Money

I'm currently enjoying the above book by Ric Edelman. I think it does a good job introducing and defining investment terms. It gives enough explanation without bogging down in details. At some times it seems rather slow, but makes up for it by being an easy and entertaining read.

Thanks to my in-laws for the gift.