Vol. 22, No. 5,514 - The American Reporter - September 7, 2016

by Mark Scheinbaum
American Reporter Correspondent
Angel Fire, N.M.
January 26, 2007
Market Mover

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ANGEL FIRE, N.M., Jan. 26, 2007 -- The magnitude of Ford Motor Co.'S financial trouble became apparent this week, and just as apparent is the realization that the car and truck maker which always touted "a better idea" needs a sales environment with some "tougher" ideas.

First, the sad, sad scorecard. This was supposed to be the first year of a three year turnaround, but appears to be the next year of a deeper fiscal slide.
'Chrysler is Daimler-Chrysler, and is a fully integrated German and European management team. If you really want to "buy American," the public and private institutions here need to give you a push... .'

Ford set the all-time auto Hall of Shame jackpot with $12 billion in losses last year.

Ford obtained early retirements or buyouts from 38,000 employees, and another 18,000 are soon heading for the door; plants are closing; models will be discontinued, but the bleeding continues.

Ford makes money on a "per unit" basis only on the popular F-150 pickups, and the sporty Mustangs. But on average, Ford loses $4,400 on every vehicle that rolls out the door.

Ford continues to be an HMO cum Pension Benefits Administrator which also makes cars. Fringe benefit and employment costs exceed manufacturing costs.

I have generally been opposed to restrictive trade and business practices, taking the position that if my old 1974 Toyota Corolla ends up being the most reliable car I ever owned (and it was), then I should have the free market ability to buy Japanese and German cars without being penalized. But the actual world of global trade is not that simple. My 2001 Ford Escape was built in Texas but was designed with Mazda and is identical (except in trim) to the Mazda Triumph. Is my little 4WD Ford truck an American product or a Japanese Brand?

Chambers of commerce, anti-union forces, business development and tax abatement incentives have clouded the field even more for Ford and GM. If you buy a Nissan or BMW built in Kentucky, Tennessee, South Carolina or Indiana by American workers earning better-than-average wages and benefits, are you disloyal to the remaining two American nameplates, Ford and GM, if you pass their showrooms in a blink?

The short, cruel answer is "Yes."

Chrysler is Daimler-Chrysler, and is a fully integrated German and European management team. If you really want to "buy American," the public and private institutions here need to give you a push.

In my days as a union rep, we received a handsome car allowance, mileage, reimbursement for auto insurance, etc. A few union employees, mostly single and mostly from wealthy families, drove Mercedes, Toyotas, and Range Rovers. Their monthly stipend from the home office in Washington was zero.

"When you go to the loading dock, and pick up four workers tired from a hard day's work, and you are taking them to dinner and a union negotiating session, we want you to load them into your big, four-door Caddy, Mercury, Olds or whatever-as long as it's 'Made in America.' We're part of the AFL-CIO and we support American workers," a union treasurer once explained to me.

So here's the deal: those politicians and legislatures which want to put your money where their mouth is, need something like this:

  • Effective July 1, 2008 state employees who use their personal cars for work, or state contractors and consultants who are reimbursed 41 cents per mile (or whatever), must submit a copy of their registration showing that the car being used is a GM or Ford product. If not, they are welcome to use any car they want, but we will not reimburse their mileage expenses.
  • UAW, Ford, and GM activists will then encourage federal and city agencies to do the same.
  • Private fleets for sales forces such as IBM, Pfizer, Pepsi etc will be offered a one-time tax rebate when company owned fleets are 85% GM and Ford products, and employees choosing to use cars other than Ford or GM products lose car benefits. In cases where a worker needs to purchase (or lease) a new personal car to qualify for company benefits, the companies (through another tax incentive) will provide employees with up to 20% of the cost of any new Ford or GM product up to a final cost of $30,000 per unit.
  • On-site airport locations for all rental car agencies will be mandated to charge a 15 percent rental surcharge for customers who want to rent anything but a Ford or GM product. The surcharge goes to offset TSA and other security costs at the same airport.

Finally, there is not now, nor will there ever be, a long-term solution to the Ford problem without comprehensive health care reform in the United States. Call it Socialized Medicine, or National Health Care if you like, I prefer a name such as the Health Care Equity Act. Under this new national plan, corporations with more than 1,000 employees in more than five states, have the option of escrowing self-insured benefit premiums into a new national network of hospitals, clinics and participating practitioners, sort of a Veterans Administration for the rest of us.

Ford employees who still want a jojoba bean cream treatment for acne, butt and boob implants, or sex therapy surrogates and want to pay for private plans are welcome to do so. But just like those union reps who trade the prestige of their Mercedes for zero benefits, the tougher idea calls for no frill or low frill but safe and qualified medical care for more Americans.

Mark Scheinbaum, a, veteran UPI newsman and business editor, is managing director of LF Rothschild, LLC, members of the: Boston Stock Exchange, NASD, SIPC.

Copyright 2016 Joe Shea The American Reporter. All Rights Reserved.

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