Monday, December 22, 2008

An Open Letter to U.S. Leaders

22 December 2008

President George W. Bush,
Honorable Senators, and
Honorable Representatives:

W. Edwards Deming, writing in Out of the Crisis (Massachusetts Institute of Technology), p. 98, a book written when U.S. automaker Chrysler sought federal loan guarantees more than 25 years ago, says:

“As William E. Hoglund, manager of the Pontiac Motor Division, put it to me [Deming] one day, ‘Blue Cross is our second largest supplier.’ The direct cost of medical care is $400 per automobile (‘Sick call,’ Forbes, 24 October 1983, p. 116). Six months later he told me that Blue Cross had overtaken steel. This is not all. Additional medical costs are embedded in the steel that goes into an automobile. There are also direct costs of health and care, as from beneficial days (payment of wages and salaries to people under treatment for injury on the job); also for counseling of people depressed from low rating on annual performance, plus counsel and treatment of employees whose performance is impaired by alcohol or drugs.”

I should think that the U.S. automakers have had more than sufficient time to get their house in order. It is clear that short-term thinking – the desire to earn quarterly bonuses – has overtaken any constancy of purpose on the part of executive management to keep the U.S. automakers viable (let alone successful).

The assets owned by U.S. automakers will NOT evaporate overnight if they must declare bankruptcy. Other firms with fresh new ideas will soon take advantage of the void in the marketplace and will leverage the labor and assets that become available to establish successful and profitable new manufacturers.

It is NOT the responsibility of the U.S. taxpayer to underwrite the long-term failure of private sector managers (or the failures of union managers to properly assess their own organization’s long-term viability). Please, NO MORE BAILOUTS to “save us” from the BAD ECONOMICS of Democrats and their cronies in the unions and elsewhere. Let the Democrat economics FAIL so that we can move onward, upward and away from more socialist means and methods.

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