Thanks Doug: US Outsourcing 7 cities

[Jester]

Today's Daily Ticker guest Bob Lutz has nearly 50 years of experience in the auto industry. Most of that career was spent with Ford and General Motors, from which he retired in 2010 as the vice chairman. Known as an outspoken, straight-shooting executive, Lutz is also an unabashed car lover. Now in retirement, Lutz is still as vocal as ever about cars and the auto industry. In his new book, Car Guys versus Bean Counters: The Battle for the Soul of American Business, Lutz documents what he believes was the greatest factor in the demise of the U.S. auto industry.

Actually, that topic and premise was written 25 years ago by the late, great author, David Halberstam's brilliantly written, "The Reckoning". Halberstam demonstrated his admiration for "car guys" and destain for accountants, in particular, those who played accounting games in order to provide false (yet legal) means to report higher income.

One example, was that in order to show an artificially higher profit was to over-produce cars, which could not be sold, and the large number of cars produced reduced the per unit Cost-of-Goods-Sold, as an expense recognized only at the time a car was actually sold. Therefore, cars for which there was not enough demand to sell were parked in vast open fields by the tens of thousands, and allowed to rust away, as they were never sold, and eventually scrapped and written-off. Of course, producing those cars were not free, but the expense did not show themselves on the books until years later as those cars would appear as "inventory" on the balance sheet.

If one is into these type of books, then "The Reckoning" would a great read.

So Reviews Jester.

 

[Kev3188]

America should bring jobs back to our own people and on our own soil. Eliminate onerous government regulations, reduce punitive tax systems, and give businesses the right to set their own wage policies without the government or organized labor artificially changing the market forces of supply and demand and those jobs will come back. Failure to correct these issues will continue to weaken our nearly insolvent nation.

No.

Doing what you propose would be the last push needed towards neo-feudalism.

 

[necigrad]

AS employees in SEA (where the locking out occurred) were *not* offered automatic jobs with the vendor who took over. A few were able to transfer to cargo, some transfered to other cities still staffed, and some took the early retirement. Most hit the street.

Everything I have heard says otherwise, including from SEA AS employees. I looked online, however, and can't find anything either way, I could be wrong. Maybe I'll look into it when I'm drawing unemployment.

I also have to question why is the company allowed to outsource now I thought the contract said after 12/31/2011 in places such as ABQ SNA etc?

Read your contract. Outsourcing has always been there. It is specifically spelled out the conditions that must be met. Your second point is correct but incomplete. The TA allows for outsourcing in specific cities after 2011 at higher flight counts the normal. Basically the "normal" condition is there has to be 14 flights a week or below, the specific cities can be outsourced at 28 flights a week.

 

[CallawayGolf]

No.

Doing what you propose would be the last push needed towards neo-feudalism.

No it wouldn't. It would improve the overall economy of the US and get Americans back to work. Our current system with 9% unemployment, 20% underemployment, 55% taking from the 45% of taxpayers in the form of Social Security or other assistance, and where 10% of the population pays 70% of the total taxes is bankrupting our nation and pushing jobs to nations that don't have the anti-business policies such as we have in the US.

We live in a very different world than when labor unions began their rise to power. Most companies can't just pull in unskilled labor off the street and expect them to perform. With technology and automation advancements have come the need for skilled labor. Those with skills needed by companies have a good deal of leverage when it comes to getting a good wage in return for their work. Any Manager at any company will tell you that recruiting, training and getting a new hire employee up to a basic level of productivity is very expensive. It is far cheeper to retain good workers with good wages and benefits than it is to constantly hire new ones, even at lower skill level jobs. So it is in the company's best financial interest to pay market rates or even premium rates so that they can reduce turnover and lower the cost of recruiting and training.

There is no feudalism involved. Those who want to work hard and improve their skills marketability will have no complaints with a return to a more rational set of business rules and non-punitive tax codes. They will make and keep more than they do today because companies would have less payroll tax and other costly regulatory burdens to maintain so they can pay more in wages and still make a profit. Supply and demand forces are far superior at setting appropriate prices/ wages than any politician or bureaucrat ever could.

 

[Jimmy Neutron]

lets outsource mgmt. first to go is d.p. second to go is scott kirby and so forth on down. I sure hope the ND08 team will get strong language and scope. I also have to question why is the company allowed to outsource now I thought the contract said after 12/31/2011 in places such as ABQ SNA etc? nothing shocks me as to what this circu outfit does anymore. Im just in shock that they are insourcing ATL...for now

Good luck on getting that contract scope language now.....If you haven't noticed....it's too late!!!!

The LAS cuts take place in Dec......and the outsourcing will be in Jan. per that POS SCOPE language in the contract....

 

[Dog Wonder]

55% taking from the 45% of taxpayers in the form of Social Security or other assistance

People collecting Social Security are taking from the taxpayers? You, or your spouse, pay into Social Security to collect it.

Your twisted view of the world serves no one but your self.

 

[LD3]

People collecting Social Security are taking from the taxpayers? You, or your spouse, pay into Social Security to collect it.

Your twisted view of the world serves no one but your self.

Let's see if he is willing to forego collecting his benefits when he reaches retirement age, my guess would be no!!

 

[CallawayGolf]

Let's see if he is willing to forego collecting his benefits when he reaches retirement age, my guess would be no!!

Social Security is a classic Ponzi scheme incapable of being self-sustaining. It's not a savings account where people simply draw back what they put in. It's been talked aout in Washington for decades that Social Security cannot pay retirees with just the payroll taxes collected, especially when the full population of baby boomers become eligible. What employees and employers pay into the system is just another tax and politicians cannot guarantee benefits 10, 20 or more years into the future. I would gladly opt out and keep my earnings for my own investments and never ask the government to do for me that which I should be doing for myself.

Take your paycheck and a calculator and figure out how much you are contributing to Social Security and how much you will contribute in your lifetime. Then figure out how long your contributions will last you into retirement. Then come back and tell me if the math works and if you feel like you can live on the amount you were forced to pay for the amount of time you expect to live post-retirement. If you say you need more than you will contribute, then you are asking other workers to fund your retirement. How is that not a tax and a wealth redistribution scheme? How can the nation's economy survive when the number of people taking from the system outnumber the people who are paying into the system?

Hey, didn't Barack Hussein Obama say that unless the the debt ceiling was raised that Social Security checks might not go out? Why would we need to borrow money to pay Social Security recipients if the people who paid into the system were just getting their own money back? Hmm, seems like a problem to your premise.

 

[robbedagain]

This contract though was written by Randy Canale back in 08 before the ND08 team took over. I just hope that the ND08 team will get the scope and language will be better so that with the new contract cities cannot be outsourced. Its certainly a nowonder that we are the circus airline

 

[Kev3188]

Social Security is a classic Ponzi scheme incapable of being self-sustaining.

...And yet it has a surplus...

I also noticed you didn't answer LD3's question...

It's not a savings account where people simply draw back what they put in. It's been talked aout in Washington for decades that Social Security cannot pay retirees with just the payroll taxes collected, especially when the full population of baby boomers become eligible.

Simple. raise the cap on SSI, and the problem of future funding vanishes almost overnight.

 

[CallawayGolf]

...And yet it has a surplus...

I also noticed you didn't answer LD3's question...



Simple. raise the cap on SSI, and the problem of future funding vanishes almost overnight.

LD3 didn't ask me a question he made a statement about me. I'm not going to speculate on what I will do twenty or thirty years from now and I really don't expect Social Security to exist by then anyway so why speculate? However, since the feds have stolen more than 12 percent of my wages over the course of my career, I'm not sure I want my money going to fund someone else's retirement who didn't contribute as much as I did.

Raising taxes, great idea for further putting the country into economic catastrophe and putting more people out of work. Is that what the president is going to announce next week with his plan for putting people back to work, raising taxes? That would be an almost certain one-term maneuver. Go for it and see how far that way of thinking resonates with the voters in 2012. We sure don't need four more years of this disaster and we sure don't need to add another five or six trillion in debt, which is what this administration is ready to do.

 

[tech2101]

Social Security is a classic Ponzi scheme incapable of being self-sustaining. It's not a savings account where people simply draw back what they put in. It's been talked aout in Washington for decades that Social Security cannot pay retirees with just the payroll taxes collected, especially when the full population of baby boomers become eligible. What employees and employers pay into the system is just another tax and politicians cannot guarantee benefits 10, 20 or more years into the future. I would gladly opt out and keep my earnings for my own investments and never ask the government to do for me that which I should be doing for myself.

Take your paycheck and a calculator and figure out how much you are contributing to Social Security and how much you will contribute in your lifetime. Then figure out how long your contributions will last you into retirement. Then come back and tell me if the math works and if you feel like you can live on the amount you were forced to pay for the amount of time you expect to live post-retirement. If you say you need more than you will contribute, then you are asking other workers to fund your retirement. How is that not a tax and a wealth redistribution scheme? How can the nation's economy survive when the number of people taking from the system outnumber the people who are paying into the system?

Hey, didn't Barack Hussein Obama say that unless the the debt ceiling was raised that Social Security checks might not go out? Why would we need to borrow money to pay Social Security recipients if the people who paid into the system were just getting their own money back? Hmm, seems like a problem to your premise.

Is that you Governor Perry?

Still want to secede from the union?

 

[BoeingBoy]

...And yet it has a surplus...

The books show a surplus for now, but there is no money behind that surplus. Only IOU's.

Simple. raise the cap on SSI, and the problem of future funding vanishes almost overnight.

That's been done several times, and supposedly solved the problem overnight. To see the problem with that, see above. More money comes in than goes out for awhile, which is borrowed to fund general government spending, and all the SS trust fund has is more IOU's. Not more money to pay benefits.

SS has been a program with problems since the first person started receiving benefits - over her retired years she collected something like $100 in benefits for every dollar she paid in. Because of the way benefits are calculated, a significant portion of SS recipients collect more from SS than they paid in - even if you include what their payments to SS would earn at market rates (which has never been the case anyway). At the other end, those that pay in the maximum get back less than they paid in unless they live well beyond normal life expectancy.

Being among the oldest of the "baby boomers" I use myself as an example of all that's wrong with SS. SS is on the verge of having 2 workers paying in for each recipient of benefits - that's my 2 kids paying in to fund my benefit. SS has "promised" me nearly $17K in annual benefits plus cost of living increases, or $8.5K in payments for each of my kids every year and increasing with the cost of living. That's $700/month each. Throw in medicare, which is funded just like SS and my kids could easily have to pay in $20K or more per year - EACH - just to fund my SS and medicare benefits. You can tell them that they're not paying enough if you want...

Jim

 

[WorldTraveler]

And that, Jim, is true of any defined benefit system of which SS is a type. The difference is that it is also a safety social net system which means many people DO receive benefits above and beyond what they paid in.
.
You need only look to Europe to see where SS will go...Europe's population growth rate slowed years ago and countries are drowning in IOUs they made years ago.
.
Europe has partially solved the problem by annexing most of Eastern Europe and by opening its doors to immigrants... both of which have created enormous social strains.
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The US' best answer to sustain SS is to open our doors to immigrants - or at least making them legal so they can and will stay here and contribute to our retirement systems (SS) - but no one will vote to do it as long as unemployment is as high as it is.
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So you have a situation that can only be corrected by creating a strong enough economy for people not to feel threatened by immigrants, reducing benefit promises for those who have yet to collect them, and incentivizing businesses to create jobs which is all that will make the whole process work.
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I would also bet Jim that your children are also saving for their own retirement outside of the SS and other DB systems.

 

[Kev3188]

LD3 didn't ask me a question he made a statement about me. I'm not going to speculate on what I will do twenty or thirty years from now and I really don't expect Social Security to exist by then anyway so why speculate? However, since the feds have stolen more than 12 percent of my wages over the course of my career, I'm not sure I want my money going to fund someone else's retirement who didn't contribute as much as I did.

Fine. I'll ask. Assuming it's there when you're ready to collect, will you, or will you decline?

Raising taxes, great idea for further putting the country into economic catastrophe and putting more people out of work. Is that what the president is going to announce next week with his plan for putting people back to work, raising taxes? That would be an almost certain one-term maneuver. Go for it and see how far that way of thinking resonates with the voters in 2012. We sure don't need four more years of this disaster and we sure don't need to add another five or six trillion in debt, which is what this administration is ready to do.

People paying in their fair share is absolutely a great idea.