Minor Thoughts from me to you

GM Plant Closes: Who's to Blame?

This morning, General Motors announced that it would be closing four plants -- including the Janesville, Wisconsin plant. Everyone was talking about the news today. Most of the talk centered around who to blame. The most popular candidates were President Bush; the evil, greedy managers of GM; and even President Reagan (!).

Governor Doyle's opinion:

"Bad corporate decision kept these lines turning out gas guzzlers as fuel prices went from 2 dollars to 3 dollars and now to 4 dollars per gallon.

"Now we stand here, carrying the burden of those bad corporate decisions -- failed leadership that culminated in a calculation that left out the very heart of this company, the workers who built"

Senator Obama's opinion:

"Unlike John McCain, I'm not in this race to extend the failed Bush economic policies; I'm in this race to end them," Obama said. "I've proposed investing $150 billion over ten years in green energy and creating up to five million new green jobs. We'll finally provide domestic automakers with the funding they need to retool their factories and make fuel-efficient and alternative fuel cars. And we'll invest in efforts to make sure that the cars of the future are made where they always have been -- in the United States. Because the fight for American manufacturing is the fight for America's future -- and I believe that's a fight this country will win."

As I read through the various articles, I noticed a few hints about why American automakers might need funding to produce fuel-efficient cars.

High Labor Costs:

In the past, costs generally were too high for Detroit automakers to turn a profit on small U.S.-built cars. But [Chief Executive Rick] Wagoner said GM has lowered costs enough with new labor contracts and other measures to turn a profit.

"The direct answer is we need to," Wagoner told reporters. "We believe we can build a car there profitably."

Generous Benefits:

Fisher said some of the hardest hit residents will be those employed by suppliers and other businesses dependent on GM, noting that GM often has been called "generous motors" for its pay and benefits.

That corporate generosity -- often granted at the barrel of a UAW gun -- destroyed GM's ability to make a profit on small cars. Because of high labor costs, GM only earned a decent profit on the more expensive trucks and SUVs. With gas costing $4 gallon GM can no longer afford to keep producing gas hogs -- or keep employing a pricey workforce.

Finally, it's interesting to note that Senator Kohl believes only the government is capable of retraining GM's employees.

"With the announcement that General Motors plans to close this plant, thousands of skilled and dedicated workers face a stark future of employment and financial uncertainty," Kohl said. "Secretary Chao seems to understand the severity of the situation and assured me that the Labor Department would take immediate steps to retrain workers at the plant. Only then can these employees learn new skills necessary to finding new jobs."

Silly me. This plant has been on life support for quite a while. I thought that the employees might have taken that as a warning sign to improve their own skills and start learning a new trade.

And, yes, I do feel for these workers. I can sympathize with the fear that comes from losing a steady income and facing an uncertain future. In some measure, the future is always uncertain. I prefer to always plan for that uncertainty, as best as I possibly can. I never want to just assume that if I ignore the uncertainty -- or appeal to Washington -- that it will just go away.