A later version, “Those Twentieth Century Tribes” opened (If anyone want the rest email me):

During the fifties and sixties the potency of “American know-how” dominated business thinking everywhere. American industry seemed invincible. It’s productive might overwhelmed its enemies during the War and in the post war boom time it was flooding the world with washing machines, radios, food-mixers, motor cars and all manner of consumer goods, as well as the machine tools which made them.

And yet during the seventies ad eighties this Leviathan seemed to crumble before the onslaught of new consumer products designed and developed by the Japanese. Any observer of the fifties would have expected US companies to continue to dominate the world of consumer goods – especially the facsimile and the video recorder and electronics based products. After all Americans had invented them. And yet it was not to be.

Many analysts have focused on the strengths of the Japanese in terms of management and production skills and how the American competition lost sight of quality control and customer service.
But these studies overlook the fact that two major sectors of the American economy withstood the Japanese challenge. The entertainment industry continues to dominate the world and is America’s largest earner of overseas funds, while the high technology companies of Silicon Valley and elsewhere dominate biotechnology, and the leading edge of the software and hardware developments.

During the seventies and eighties our admiration for American know-how was displaced by an equivalent admiration for American Management Marketing skills. American style MBA schools were set up everywhere – and students flocked to enrol in them and companies winningly employed them on graduation.

The standard text of the eighties told these keen student that:

* Technology based companies were beneath contempt; because they were “product driven” rather than market led – a mortal sin.

* The entertainment industry was never mentioned at all or was dismissed for being driven by creative people and its lack of scientific marketing procedures – a grievous heresy.

So the high tech and entertainment sectors were ignored by these MBA courses. And they went from strength to strength – they were immune to the MBA virus and remained robust and well equipped to withstand the Japanese assault.

But did these self-immunised companies sleep-walk their way to victory or did they have particular skills of their own – skills which may be transferable to mainstream business and help ensure its future survival against future competitors?

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Mu understanding (based on reports not my own research) is that while the wages paid by Toyota etc are about the same the difference lies in the fringe benefits, special rates and all manner of other non labour costs of labour which make a huge difference to the productivity per worker.

Probably about as much a factor as the obvious failing in management.
About fifteen years ago I wrote a paper for my MBA students called “What has gone wrong with US big business?” It proved all too prescient.

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BP —- Parse that para again. You missed that I agreed that you had NOT agreed to the bailouts. Perhaps the inference wasn’t clear enough. I said that what you said was True. I try not to be excessively subtle.

Of course, the logical difficulty of the rest of that paragraph is that I DID invert my argument. Not up to my usual standards.

I still regard your refusal to allow NZ to take responsibility for cleaning up its small but real part of the mess as being the very essence of how “Moral Hazard” causes real damages.

What part of this is difficult? A LOT of people are spending your money without your permission. Doing the same with mine. Mostly on stuff I disagree with too (housing policy for starters, wars when I was in the USA) … so the prospect of taking a 1%-2% bite for the future of the human species and actually doing SOME good as opposed to 4% or 5% of outright theft by people who are simply greedy, makes you raise your hackles and spit the dummy because we can’t PROVE that it would be good until you can see the damage occurring ? Cui Bono is a horrible thing on which to base a moral position unless you include your children and their children in the calculations.

BJ

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BP said “Horrible, overpriced cars – the prime example of what happens when you put workers before customers.”

It’s not all the unions, but they are a significant part of the problem. The cost of producing an American car is astronomical, and the industry as a whole aren’t focused on the customer.

I had the displease of driving a Crysler rental recently. The thing was new and it was already falling to bits. Terrible handling, terrible performance, terrible fuel economy, and they were selling it for the same price as a mid-spec BMW. It’s not an isolated case, it’s the state of their industry.

Let the lot go to the wall. They absolutely suck.

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>>True BP… just because bankers and the economists they own and the governments they influence are getting money for nothing doesn’t mean that the environment our kids have to live in should get any consideration whatsoever. You got me on that…Basically the sort of thinking that makes me sick to my stomach.

Please show me where I have agreed to any bailouts?

We do have a duty to look after the environment. But you are not spending my money on actions that make no difference. They might make you feel good, they might forward the Greens political agenda, but if they do not drop the temperature significantly, then forget it.

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The hourly wage rates for US auto workers start at $14 and go as high as $28. When shift allowances and overtime rates are added the average hourly pay is $39. When group life insurance, disability benefits, and Supplemental Unemployment Benefits (SUB), Job Security (JOBS), pensions, unemployment compensation, Social Security taxes, and hospital, surgical, prescription drug, dental, and vision care benefits are added Toyota’s employee costs increase to $48 but GM’s increase to $73. That is what is being referred to as a legacy cost. It is the legacy of the UAW demanding generous pension plans but not demanding that the funds actually be set aside in a jointly GM/UAW administered trust fund.

The big three are all guilty of the same foolishness and even if Toyota has done the same thing it has only been doing it for twenty years which explains why those costs only average $19 per worker hour whereas GM’s are $39.

There is a lengthy discussion of the media’s presentation of these “wage” costs here:
http://mediamatters.org/items/200812060002

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Got to agree with you there, Owen. If what you say is true, and both the parties are just begging the government without any real concessions, then they are doomed to fail. “Too big to fail” is indeed a moral hazard.

I wonder who will blink first? What is interesting is that as BJ says, the foreign owned, mostly non-unionised factories pay about the same to workers as the unionised plants. So clearly it’s not a wages issue that makes the big three inefficient. Perhaps it was Bush’s subsidy of SUVs that is/was the ultimate nail in the coffin.

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It is on the record that the Unions have refused to even discuss changing their employment packages to help save their companies because: “We are confident the Government will not let the companies fail and will provide the necessary funding.”

IT’s called moral hazard. IT now seems that the general population are so much against this bail out that they are now boycotting the industry and the collapse will only be faster and taking taxpayers’ money with it.
When both the employers and the employees believe they have some god given right to survive any mismanagement then they are eventually doomed because they stop listening to their customers.

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BP

Frog has it mostly right, you have it mostly wrong. The US Auto Industry has lobbied for and gotten tax breaks on its “most profitable” products which are the largest trucks.

It has favored the largest cars in its engineering efforts, it has given lip service to the goals of efficiency and alternative powertrains. It has pushed the production of economy models into other economies. Short. Sighted. Businessmen. It has geared itself to production levels that would replace every car in the country every 3-5 years. It has suffered at the hands of unions which demand a fair go. Toyota pays pretty much the same level of compensation to its workers that GM workers get. It is structured differently. Most of Toyota’s engineers and workers (in Japan) are provided with health-care as a matter of government policy.

It IS different.

BJ

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BP said “Horrible, overpriced cars – the prime example of what happens when you put workers before customers.”

What a laugh. Didn’t you mean to say; “Horrible, overpriced cars – the prime example of what happens when you give large government subsidies to the auto manufacturers in the form of tax breaks for only their horrible, overpriced models, while you break the unions and export their jobs over the border to Mexico via NAFTA.”

I’m sure my version of the statement is much, much closer to the facts! Laying the problems at the feet of unions is totally disingenuous. I’m sure that the unions are not the ones making the tax breaks or the management decisions.

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flayed alive’o

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As for SHOWING that you make a difference… no, that isn’t required. My moral obligation to pick up my own trash isn’t predicated on the fact that as one person I have no measurable impact on the trash load on the street.

Clearly yours must be, for the logic you apply to NZ and environmental action entails not giving a rats patootie unless you DO make a difference.

This isn’t even an ideology… it is a pathology.

BJ

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True BP… just because bankers and the economists they own and the governments they influence are getting money for nothing doesn’t mean that the environment our kids have to live in should get any consideration whatsoever. You got me on that…

After all there is nothing in that for US….

Basically the sort of thinking that makes me sick to my stomach.

BJ

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Bj

Straw man. Where did I agree with the bail outs?

My point is that if you’re going to spend, on anything, you need to show how you’re making a difference.

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Yep. Let the union infested cra*fest that is the US motor industry go to the wall. Horrible, overpriced cars – the prime example of what happens when you put workers before customers.

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jh

Yes, Owen clearly knows little about this subject.

The unions are largely to blame for the near death of the USA auto industry, the companies do carry some blame but the vast majority of the problems can be traced right back to the way the UAW have raped the big three.

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I forgot about the Unions but wasn’t the big car thing also a factor?

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We should not bail out the US car makers any more than we bailed out all those people who were in the horse and cart industry.
The US automakers are the worst examples of crony capitalism unionism.
How come the Japanese can afford to build cars in America while Americans claim they cannot.

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Should we (they) bail out the US car makers?

Hint: The executives views probably similar to Big Bro and Owen McShanes.

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The problem is that as we try to respond to climate change the costs appear and people say “there must be a better way”, but that doesn’t mean people are being persuaded it is a con or bad science:

“National and international science academies and professional societies have assessed the current scientific opinion on climate change, in particular recent global warming. These assessments have largely followed or endorsed the IPCC position that “An increasing body of observations gives a collective picture of a warming world and other changes in the climate system… There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.”[1]”

http://en.wikipedia.org/wiki/Scientific_opinion_on_climate_change

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