WHO MADE THEM KING?

WHO MADE THEM KING?

James R. Fisher, Jr.
© December 16, 2008

“One of the strongest natural proofs of the folly of hereditary right in kings is, that nature disapproves it; otherwise she would not so frequently turn it into ridicule by giving mankind, an ass in place of a lion.”

Thomas Paine (1737 – 1809), English-American political writer

“Kings wish to be absolute, and they are sometimes told that their best way to become so is to make themselves beloved by the people. This maxim is doubtless a very admirable one, and in some respects true; by unhappily it is laughed at in court.”

Jean Jacques Rousseau (1712 – 1778), Swiss philosopher



FORMER COURTHOUSE TIGER WRITES:

Jim,
Did you write this? (See attached) Merry Christmas.
Phil


DR. FISHER RESPONDS:

Dear Phil,

No, I did not. I’ve attached the article to this that you sent to me because in humor and fun, in tongue and cheek, and in the spirit of Christmas, it points out the obsequious side of our executive led culture, while showing the bountiful retreat into rationality when the walls are falling in on it, the floor collapsing, roof caving in, and yes, as Chicken Little might say, “There are reports that the sky is falling, too.”

None of this of course is true. Depending on who is reporting, the BIG THREE American automakers have 400,000 workers, 230,000 of whom work in the United States making on average $55 per hour in wages and benefits, or $440 per day, $2,200 per week, $114,400 per year. In fairness, foreign automakers in the United States pay on average $45 per hour in wages and benefits, or $360 per day, $1,800 per week, $93,600 per year.

This is pretty good for relatively unskilled workers with high school diplomas against professional people with anywhere from four to eight to twelve years of university or higher education.

These workers don’t have any college loans to pay off, whereas most of these college graduates have loans from $50,000 to $250,000 or more with interest. They will have to spend many years paying on these loans, while they attempt to settle down into professional life, have a family and live in a reasonably comfortable lifestyle. A case could be made that this is a huge sacrifice is time, hard study, surrendering a good part of their youth to prepare for a professional future.

Phil, you were one of the ideal types of my youth, an excellent student, a fine athlete, the youngest sibling of three boys, a good son of two hard working blue-collar employed parents, and one of the original COURTHOUSE TIGERS from the neighborhood.

You used your athleticism to become a Niles Kinnick Scholar at the University of Iowa, and your brains to earn a degree in chemical engineering, and spent your entire career with Dupont. I don’t mean to embarrass you but there was no certainty to your livelihood right out of high school as there has been for many autoworkers for more than half a century.

I don’t imagine you would receive full pay and benefits if you weren't working, as is the case with UAW workers. Imagine making the same amount, sometimes for months, if a line went down for retooling and you were forced to sit it out at home earning as much as if you were working.

When I was a boy, I would spend a month in the summer in Detroit at my uncle’s home including two weeks at Higgins Lake where he had a summer cottage. I would play baseball with kids whose parents, brothers and sisters, uncles and aunts, girlfriends and boyfriends worked on assembly lines in one of the BIG THREE automaker plants.

My uncle was head of the Department of Finance & Commerce at the University of Detroit, a Jesuit university, with two Ph.D.’s (economics and psychology) from the University of Iowa. His home was modest compared to these autoworkers’ homes. In fact, fifty years ago, automakers made a better living than medical doctors with only high school diplomas.

Ironically, executive compensation fifty years ago was a modest 25 to 30 times that of these workers, not 1,000 or more times that it is today. In a strange way, while being totally legal if not ethical, as United Auto Workers (UAW) union were successfully negotiating lucrative contracts for autoworkers, senior management at the BIG THREE started a trend that many other industries picked up, treating themselves as if kings of American commerce, and rightly entitled to a law and compensation unto its own.

Charles Wilson, CEO of GM those many years ago, was confident and most likely right when he said, “As GM goes so goes the America.” He saw himself as king of American Industry, and he challenged anyone to think otherwise.

Fifty years later, it is a different world, but old myths and habits die slowly if at all. The automotive industry is no longer king. It is one of the ironies of American society that we keep building for what was “king” in the past and failing to look ahead to the future. What do I mean by that?

We keep building these massive highways and byways, cementing over some of the riches soil in all the world, soil that is bountiful in what it can deliver in food and sustenance for a world that is starving now, and will be in desperate straits fifty years from now. That is so because we refuse to look ahead. We are always building and developing looking through our rearview mirror.

The world of the future is going to be one massive city with little pockets of land like hot houses furnishing our food.

The industry that we so love, and no one loves automobiles more than Americans, is our libido machine. Early in the twentieth century it became our private place to do lascivious things when no one was watching. But that, too, is dying as the virility of the Americans is suffering a hang over from which it is difficult to see it rallying from its dying libido.

Stated another way, we’re doing everything possible to make our lives more stressful, more anxious, and more impotent through substance dependent, treating leisure as another form of work, and working ourselves to death to find that money tree on the hill. What we call entertainment is vicarious. We watch reality shows as if we are watching ourselves; the same goes for professional sport, or other activities that distance us from ourselves and our own minds, bodies and souls. It is as if we have become superfluous to ourselves. You only have to watch television or surf the Internet to find the proof.

Nobody made the BIG THREE king. They assumed the role and nobody challenged it. This is not unlike how the whole monarchy idea got off the ground a few millennia ago. Since nobody challenged them, they became the model for all industry, the system, if you well, and this remains so to this day.

For their assumptions to hold water, however, auto making must remain the central wheel turning our economy with all other industries only its spokes. Is that true? I don’t think so. We are not primarily a manufacturing society. Even today, as it was from our beginning, our chief exports are agricultural, livestock products, and raw materials, not finished goods.

As the world becomes one massive city, massive transport will be the way to get around, not millions or billions of little gas guzzling machines. The world can’t afford it, but the world will continue to deal with global pollution at the edges as long as it can, and leave these gas guzzlers at the core with ornamental reengineering. That is Machine Age thinking, and it hasn’t left us.

The two scenarios you sent me (see attached) showing how CEOs of the BIG THREE acted before Congress, and what they would have like to have said are all MACHINE AGE dribble. Either way, they show evidence of looking through that rearview mirror.

Do I oppose a bailout of the automotive industry? What do you think? Will I lose sleep if the BIG THREE tank? I’ll let you decide. Am I worried about the autoworkers who have existed in arrested development suspended in permanent adolescence for fifty years? Yes, I am.

They have been programmed in learned helplessness and for that I am deeply concerned. They didn’t fight the system that betrayed them because they were never taught to be self-reliant. They let the system lullaby them to sleep with a pacifier, and now they are paying for it. It is a system’s problem, and the system, which Detroit unwittingly has been its architect, is what is wrong with America today.

Most Americans, I believe, have little idea much less interest in what is going in the rest of the world. Tens of thousands of mainly African children and their parents are suffering preventable blindness because the water that is the substance of their lives is polluted. It is infested with an insect that once it gets into the body kills the sight of its host. These innocent people without safe drinking and bathing water, with the only source to water the fly infested river, are largely if not completely off our radar.

So what is my point? We have created a society of learned helplessness, of counter dependence on those who employ us for our total well being, who only see our own reflection in the water and not the terrible things that happen to those far from us who drink from a similar stream, but it kills, maims or cover their body in sores.

MOTHER NATURE is constantly correcting the excesses of man despite man’s resistance to such corrections. The auto industry is going to become a shell industry not because the BIG THREE executives are bad people, which they are not, not because the American autoworkers working for the BIG THREE are bad people, again which they are not.

Notwithstanding hybrid and fully electrical non-polluting automobiles, individual automobiles will one day be museum antiques. The world is too small a planet for billions and billions of automobiles. The earth has too little surface to construct the required highways and byways. We will eventually run out of space. It won’t happen in my lifetime, but it will. It is inevitable, as the world becomes a single city.

Will anyone pay attention to what I say here? Of course not. Dr. Fisher is just an old foggy whose feet have never touched the ground.

There is some truth to that. I am an idealist who thinks man is capable of so much good, so much love, and so much neighborly kindness. But he fears the future, and always has. He looks for security when that is one of the most foolish notions of all because there is none. We all die, everyone, the good, the bad, and the ugly. There is wisdom, however, in insecurity because it is like removing a giant shroud from the mind. If we could only learn to trust ourselves, there would be little opportunity for us to be duped.

Imagine the Ponzi scheme of Bernard Madoff, a guy who once was chairman of the NASDAQ. He is alleged to have duped banks across the globe, insurance companies, trust funds of such brilliant notables as Nobel Laureate Ellie Wiesel, Mortimer Zuckerman, owner of the New York Daily News, and US News & World Report, and Steven Spielberg – heavyweights! – and thousands of small investors of their life’s savings to the tune of $50 billion.

You know that old saw: “When it is too good to be true, it probably is.” The New York Securities & Exchange Commission, among others, which had invested Madoff earlier in this century – claim “not my error” – for failing to shut him down.

The Ponzi scheme is a pyramid scheme that is used in many industries. The idea if that you profit by getting others to invest in selling your product. It is not about selling anything but getting people into the works and leveraging them for your profit. Well, with Madoff apparently, he got people to invest in his scheme, and while not making a profit on their investments, kept them quiet by paying them dividends out of the new investors. MOTHER NATURE stepped in with this giant recession and, suddenly, he was found standing naked as the economic tide went out.

Again, fear is the culprit fueled by greed (something for nothing). We want to be rich because we think being rich is important, that people who are rich are different. They are different: they have more money. In every other way, they are the same as all of us. This current Ponzi scheme is another indicator that the rich and famous are not necessarily smart

Elsewhere I’ve written that we have a leaderless society and dissident workers (see CORPORATE SIN 2000) because the system is broke and we have become broken with it. This is not because we are bad people, but because we are inattentive. The difference between leading and following is in degree, not nature. For leaders to lead they must be complete followers; for followers to follow they must be complete leaders. They are not mutually exclusive roles, but rather interdependent functions founded on trust.

British statesman, Sir William Temple (1628 – 1699) once said:

“I have long thought, that the different ability of men, which we call wisdom, or prudence for the conduct of public affairs or private life, grow directly out of that little grain of good sense which they bring with them into the world; and that the defect of it in men comes from some want in their conception or birth.”

It is hard to improve upon that although it was said 400 years ago, yet another reason why I wrote A LOOK BACK TO SEE AHEAD.

Finally, I am proud of you as a friend, as a fellow Clinton, Iowa boy, who grew to be a fine man IN THE SHADOW OF THE COURTHOUSE. I know many others of your stock who have fought the good fight, live the good life, and looked with humor at those who crave celebrity status. It is people such as you that preserve the sanity of an otherwise insane world. Merry Christmas!
Always be well,

Jim

SEE THE ATTACHED!

At Witz' End: What Auto CEOs Should Have Said

Did it occur to anyone else that those oh-so-painful auto CEO/government hearings should have been the other way around?

Instead of the heads of America's three remaining automakers groveling, begging and enduring live public floggings trying to sell their case for government loans to get them past the global economic crisis and credit freeze that government greed, corruption and incompetence has created, shouldn't they have been vein-popping outraged and angry? Shouldn't they have pointed accusatory fingers at that sorry collection of arrogant, auto-ignorant Senators and Congressmen who got them into this mess and demanded their assistance?

Shouldn't they have looked those pompous public-trough pinheads straight in the face and demanded to know why investment firms, banks and big insurance get hundreds of billions of taxpayer bailout dollars no questions asked while what's left of America's once-mighty manufacturing muscle begs for loans totaling 1/28 of that initial $700 billion Wall Street bailout? Where were the public humiliation hearings and newly viable business plans for those guys?

(post continues after the jump)

Here is what I'll bet those long-suffering auto CEOs wanted to say, but couldn't:

"You ignorant morons! How dare you accuse us of building cars nobody wants? We sold 8.5 million vehicles in the US last year and millions more around the world. GM still handily outsells Toyota here, Ford outsells Honda and Nissan, and Chrysler sells more than Nissan and Hyundai combined. H ow many of our new cars have you driven lately? How many quality surveys and plant productivity reports have you reviewed? Have you bothered to check your own EPA's fuel economy ratings?

"Have you paid any attention in the last several years as we've turned our companies upside down, closed dozens of plants, shed hundreds of thousands of hard-working people who did nothing to deserve it, canceled slow-selling models and spent billions of hard-earned dollars redesigning the rest? Are you idiots even aware that we renegotiated our union contracts last year to make our US labor and health-care costs fully competitive by 2010?

"Would you recognize a good business plan if one smacked you upside the head? Have any of you ever run a business, made a business decision or even held a real job? Is there any more dysfunctional organization on the planet, any that more desperately needs a new business plan, than the US Congress? Let's compare our public approval ratings to yours .

"You scold us for using private aircraft? We run global companies flying people, parts and equipment all over the world every day. We use private planes for security and productivity and cost savings over commercial alternatives. If it were not cost effective, we would not do it, and we've been doing a lot less of it lately. Tell us, Ms. Pelosi, how much does that big private 757-200 of yours cost taxpayers to fly you home and back between your tough 3-day weeks?

"For decades, your national energy policy has been summed up by two words: 'cheap gas.' Now you want to punish us for building the big, capable, comfortable vehicles Americans wanted to take advantage of that policy...and for not building millions more smaller, more fuel-efficient cars that, until recently, almost no one wanted, and that we can't make a buck on if we build them here thanks to the high business costs you've imposed upon us through the years.

"You have blocked every avenue of domestic e xploration and construction that could lead to eventual energy independence, preferring instead to pump hundreds of billions of dollars overseas to purchase the energy Americans need, much of it from countries that are not our friends. You have piled billions of dollars of unrecoverable costs on us with excessive taxation, overkill regulation and relentless litigation that our off-shore competitors do not have to bear. Then you have rolled out the red carpet to predatory, low-cost foreign competitors who come here to take our market and pump hundreds of millions more dollars out of this country.

"Is there any other country fortunate enough to have an automotive industry that does not support, protect and nourish it in every possible way? We are the only nation on earth too blind and stupid to recognize and treasure the enormous economic and national security advantages of having its own healthy, prosperous auto industry and manufacturing base.

"Now you have passed an enormously expensive new regulation requiring 40 percent higher corporate average fuel economy in hopes of someday reducing the less than 0.2 percent of global human-sourced CO2 attributable to US light vehicles. That will cost us an estimated $100 billion, and even if you believe that is really worth doing at such a cost, where are we going to get that kind of money? Talk about unfunded mandates!

"With recent resizings and restructurings and our new labor contracts, we were well on our ways to full financial competitiveness and profitability. We could have survived and the sudden $4 gas explosion - not our fault - that shifted buyer demand overnight from larger, more profitable vehicles to small unprofitable ones. We have millions of highly desirable, much more fuel-efficient small cars and engines in the pipeline for 2010 and beyond.

"Then came your mortgage meltdown and fast-frozen credit crisis, which no one in this credit-driven business can survive un aided for long: not us, not our suppliers, not our many thousands of independent dealers, not even our most cash-rich foreign competitors. They, too, are asking their governments for assistance. Will they get it? Of course! No other nation will stand idly by and watch its auto industry die.

"There was no end of election rhetoric about creating new jobs. How about saving several million of the ones we have? Can any of you begin to understand how this industry is a huge, fragile, interdependent house of cards? If GM should fail, or declare Chapter 11, so will most of its 3,690 suppliers, beginning with the 2,000 in the US that operate 4,550 facilities in 46 states. Since most also supply key components to everyone else, that will bring down all of us, including US transplant production. Don't believe us? Ask Toyota .

"Vehicle assembly, engine, transmission and parts plants nationwide will shut down. Have you seen a plant town whose plant has died? It's a jobless ghos t to wn whose out-of-work residents, including owners and employees of the small businesses that depended on plant workers' incomes, can't afford to move because their homes – like their hopes and dreams – are worthless. How many of those communities will be in your states and districts? US dealers of all brands, with no new cars, credit or credit-worthy customers, will drop like flies. Without once lucrative auto advertising, many media will shrink and some will die? The predicted initial loss of 3 million jobs will be just the beginning. Can you spell depression?

"Yes, we have lost a lot of market share. Where did you think all those millions of cars and trucks our foreign competitors import and assemble here in taxpayer-subsidized plants in cheap-labor states would be sold, and out of whose hides did you think they would come?

"Yes, we have made mistakes, some bad products and bad business decisions in the past. And so has every one of our competitors. We are entir ely d ifferent companies today with new leadership and new priorities. We have wide varieties of high quality, high fuel efficiency, highly desirable new products that Americans, as they get to know them, absolutely do want to buy. Why continue to punish us, and the millions of incredibly dedicated, hard-working people at all levels who still depend on us to feed their families, for the sins of our predecessors?

"Why punish the entire country and millions in other countries as well? If you can think of any good reason, we would like to hear it. And don't come back at us with your usual name-calling, finger-pointing, blame-shifting, uninformed opinions, decades-old perceptions and self-serving, grandstanding rhetoric. We have offered our business plans and all the facts behind how we got here and why we need and deserve to survive and prosper for the good of this country and every citizen in it.

"You know full well that this life-threatening position you have put us in to is entirely your fault, not ours, and that our future viability depends completely on you. We're anxiously awaiting your business plan for guiding this country out of the economic morass you have created, beginning with the bridge loans we desperately need."

Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (www.kbb.com), AutoMedia.com< /A>, W ard's Auto World and Motor Trend's Truck Trend and is a North American Car and Truck of the Year juror