Although the following letter focuses on auto manufacturing, imported autos and NAFTA, it should be noted that there are many other U.S. trade agreements affecting all facets of our manufacturing community to varying degrees, but none are as notable or notorious as NAFTA. It should also be noted that the U.S. has been importing cars for decades. The VW Beetle has been around since the first 2 were brought over by Ben Pon in 1949 and during the 1970’s oil crisis, we started seeing many Japanese cars arrive on our streets. Rather than cloud the water, my thoughts focus on NAFTA, the Big 3, current imports and what might possibly be one of the worst atrocities our government has ever perpetrated on main street, a failure to bailout and institute a plan to breathe economic life back into mainstreet.
Dear Honorable Elected Officials and Other Interested Parties, Several weeks ago when “Wall Street” came calling on Capitol Hill for assistance, everyone reacted in relatively quick fashion and responded with 700 billion dollars to cover their needs. Immediately after Congress agreed to the “Wall Street” bailout, cries were heard nationwide as to who was going to bailout “ Main Street ”. Their cries are understandable as there are so many businesses across this nation, large and small, struggling or going under. Some days later, the “Big 3” came asking for similar help. However, any potential help for them appears to be questionable at best, as they’re getting a lot of push back on Capitol Hill. (11-18-08) The American auto industry is more of a major player in the American economy than just about any other entity outside the Federal government, with as many as 1 in 10 American jobs tied to it. No other industry represents “ Main Street ” any better than the auto industry, directly employing 10 of thousands of middle class, blue collar workers, and indirectly employing millions more. When, the most prominent “ Main Street ” players stepped forward to ask for assistance, they, and their products, astonishingly were verbally assaulted by Congress and treated like common criminals. As they sat on the hot seat, I have to say I was more than a little perplexed as they were harangued by essentially the same people that more or less welcomed “Wall Street” with open arms and an open pocketbook just days before. If Congress says no to the “Big 3”, they will be delivering a “Big No” to “ Main Street ”. The “Big 3” is more than just GM, Ford and Chrysler. Indirectly the “Big 3” employees workers that manufacture steel, computers, computer chips, glass, rubber & plastics and a wide array of other automotive components. The “Big 3” indirectly opens the employment door to many other non-manufacturing businesses like diners, party stores, grocery stores, sub shops, and deli’s just to mention a few, that survive because they are across the street or around the corner from the plants that make the cars. There’s auto dealers that sell cars in just about every state, transmission shops, brake shops, auto parts stores, collision shops and a sundry of other auto related businesses that are dropping off the radar screen. When it comes to businesses that are touched by the “Big 3”, the businesses mentioned above, only begin to scratch the surface. To address Congress’s concern that there’s no assurance the “Big 3” won’t be back for more later, there is some evidence to suggest they could be correct. To some degree, the 1990’s Congress and President Bill Clinton, were complicit in drafting and signing into law the North American Free Trade Agreement. The North American Free Trade Agreement on the surface sounds like it’s a good thing because it contains the words Free Trade. But a decade and a half later we see how deceptive the title of the document really is in our trade deficits with Canada and Mexico.
(NAFTA is an agreement born in 1994, between the US, Mexico and Canada-however it has been expanded and has also opened the door for other Trade Agreements that reach well beyond the boundaries of North and South America. See Associated Article On Trade Agreements) I think we all now see how prophetic the words of H. Ross Perot were, when he said there would be a loud sucking noise heading south. He was wrong only in that the sucking noise is being heard not only from south of the border, but from directions all around the globe and its effects aren’t heard any louder nor felt any harder, than in the U.S. manufacturing market and especially the North American Auto industry. This debacle created by NAFTA and other similar agreements should come as no surprise, as some foreign countries limit the number of American cars and other goods imported and sold on their soil and some impose tariffs. They in turn have an open, unencumbered market here on America ’s shore. There shouldn’t be any guesswork as to who’s going win that struggle? There are other factors that allow Free Trade Agreements to give unfair advantage to our foreign competitors. Some countries have forced labor, child labor, slave labor, controlled wages, no benefits, less than living wage and a host of other nefarious inhumane and immoral labor tactics employed by foreign countries, companies and their controlling entities. America and its auto industry cannot be globally competitive under NAFTA and other NAFTA like agreements. The fact of the matter is, many Trade Agreements and Right To Work proponents are making it evermore difficult to compete here, unless we’re willing to give up our middle class status, accept lower wages, less health care and compromise a variety of other benefits, thus making ourselves look more and more like a 3rd world country instead of America. Simply loaning the auto industry 25 to 50 billion dollars (down to 14 billion as of 12-10-08) may only delay the inevitable if our Trade Agreements aren’t modified or replaced with Fair Trade Agreements. I don’t think anyone disagrees with selling foreign products here; however, we need to take a sensible approach to how it’s being done. We need to be sure there’s balance by leveling the playing field in all respects, not only for the auto industry, and all American workers, but workers world wide. Our trade agreements need to incorporate assurances the makers of foreign products sold here, were made by adult workers, of their own free will and at a fair wage. Adult, free will labor, and fair wages along with sensible trade balances will help ensure trade agreements bring a better standard of living to overseas workers, and cease the downward spiraling of the living standard currently invading America brought about by our Trade Agreements. Our standard of living shouldn’t be brought down to that of third world countries, rather we should make every effort to assure our Trade Agreements brings the living standard of other countries up to ours without compromising or destroying our own economy. Free Trade Agreements aren’t the only assaults being endured by blue collar, middle class America. During this 2008 election year, many politicians and Corporate America tried to get more states to become “Right To Work States”. Most people are never given the chance to know the real facts about “Right To Work”. Generally the information disseminated is obscured by rhetoric, pressure tactics and an absence of the true facts. “Right To Work” is another really good sounding phrase, because as its proponents say, everyone should have the, “Right To Work”. Rather than being about the “Right To Work” it’s actually a tool used to help destroy Union ’s and bring a lowered standard of living to employees. Simply put, it’s just another example of something with a good sounding name, but in practice actually has negative ramifications for blue collar Union workers. (See Associated Article “Right To Work”) One must also understand how perceptions play a big role in how and what people think about what’s playing out in Washington. What I and likely many on “Main Street” see playing out is, Capitol Hill using the plight of the “Big 3” to take dead aim at the Unions by telling the automakers they need to take on the Unions. I think this is an extension of Wall Street/Corporate America’s assault on “ Main Street ” through lobby influenced legislators. Wall Street/Corporate America appears to be using Capitol Hill to extort from the Unions what wasn’t gained at the ballot box. If the Unions are destroyed, much of the coveted middle class America will go with them, giving Corporate America their much desired 2 class society, the filthy rich and working poor, making most American’s virtual slaves to Corporate America . I find it hard to believe that “ Main Street ”, earning 50 to 60 thousand a year, brought the “Big 3” to its knees. I’m sure there probably is plenty of fat available to trim. There’s been much said about “Big 3” programs that allow employee’s full pay while at home without being on vacation or sick leave. Much has also been said about executive pay being excessive. Things like these definitely fill the bill when looking for areas to trim back. I think there are many alternatives to destroying unions and decimating middle class America. Without merging, there are lots of ways for the “Big 3” to trim back and achieve merger like synergy savings in a variety of areas and ways. (See Associated Article “Big 3 Synergy Savings”)
The question is, how will “Main Street” perceive this assault on middle class America by Congress knowing an army of “Wall Street” big-wigs have salaries, bonuses and other compensations normally reaching not only in $10’s of millions but often in $100’s of millions of dollars? When you couple that with Congress making the “Big 3” jump through hoops to get a miniscule loan in comparison to “Wall Street’s” excess, what the entire world sees is Congress establishing a double standard between “Wall Street” and “ Main Street ” that creates a divide greater than has ever existed. The fact that 2 of the largest financial institutions have successfully come back with their hands out 2 and 3 times without being publicly humiliated, without being assaulted for their mode of transportation, without being required to publicly divulge a plan or accept significant concessions of any sort, only adds salt to the wound in the eyes of “Main Street”. According to an online article, Congressman Dennis Kucinich (D-Ohio) has called for a probe into $70 billion dollars worth of pay deals planned for employees of failed banks, all this long before half of the first $700 billion was handed out. If you ponder the question as to why weren’t the “Wall Street” players required to minimize executive pay as is being asked of “ Main Street ”, you further realize the depth of the double standard. Out of the original 700 billion, and the subsequent 800 billion earmarked for “Wall Street”, some of it will probably be defaulted on, assuming there’s an expectation that all of it is to be returned. There is no evidence to suggest that anything is in place to guarantee “Wall Street” is expected to return it all.
What isn’t returned by “Wall Streets” is likely to be much more than the “Big 3” is asking for, which in all likelihood will be forgiven by Congress, assuming, as I said, there’s an expectation it is to be returned. I’m convinced that if the “Big 3” is given a loan, and the playing field is leveled, the loan will be repaid much sooner than the return you’ll see from the “Wall Street” handout. These theatrics only deepen the world’s misperception of America and American’s as their views are skewed because it’s based on “Wall Street”, greedy Corporations and government processes that supports and promotes their excesses above the American people. I think there’s a much greater risk of pouring money into corporations whose job it was to take public and private money and manage it into more money, but demonstrated a deficiency in this area brought about by greed, irreverence for the rules and the absence of an enforceable accountability process. That in no way compares to “ Main Street ” whose ability to compete was taken away through NAFTA and NAFTA like agreements by some of the same players who are humiliating the leaders of the “Big 3” and threatening to deny them aid. Had non-corporate labor/Union leaders been present and influential partners with corporate leaders in the architectural design of NAFTA and other Trade Agreements, “ Main Street ” probably wouldn’t be where it is today, especially on the automotive and manufacturing front. In the past, when the government involved Labor Leaders, that unilaterally meant the owners, presidents and board members of large corporations. I believe when discussing and drafting new legislation that touches labor on “ Main Street ”, there should be a place for non-corporate labor/Union leaders alongside Corporate America in equal partnership, assuring “ Main Street ” isn’t overlooked or devastated by another NAFTA like agreement. I’m not trying to point an accusing finger, rather I’m pointing out, even with the best of intentions, we sometimes go in the wrong direction through ignorance, misinformation, inadequate information sources and misguided agendas. Perhaps there should considerations of having all affected players present in some processes to assure our actions reflect the most educated path possible to avoid pitfalls. There’s concern too that even if a loan is made available, it will be too little to effectively shore up all of the “Big 3”. If that turns out to be the case and Chrysler gets taken over by the 1 of the other 2, only a small portion of Chrysler, as it exists today will survive, resulting in thousands more being laid off within the industry, and maybe hundreds of thousands of others across America from the ripple effect. Saving the “Big 3” as a whole would help create a more vibrant economy than if they merged into the “Big 2”. A “Big 2” would take a big bite out of the 2 ½ million new jobs Obama wants to create in the first 2 years. If the “Big 3” as a whole were allowed to go under, it would more than neutralize the entire 2 ½ million jobs Obama wants to create during that timeframe. Many years ago, America was expected to “Buy American”, it’s what made us the greatest country on the planet. It wasn’t until other countries were allowed to sell more of their products here than we could sell there, that’s we started our downward spiral. (See Associated Article “Buy American”) Somehow, someway, someone has to drive home the importance of buying American, but before we can do that, we have to have a viable market. We cannot continue shipping jobs out of the country, we cannot continue turning a blind eye to the corporate greed that helped lead us to this point, and we have to create an atmosphere where Americans can once again have a fair market to compete in. For some reason, there appears to be people on “Wall Street”, and Capitol Hill who believe “ Main Street ” should be wholly satisfied with our health, and our family, while our jobs are shipped overseas, and remain silent as our pockets are picked of our last few remaining pennies. I implore all readers to write letters to their Congressmen and representatives and use whatever influence you have to encourage our officials make the right decision and help middle class, blue collar, “ Main Street ” America not only get on its feet with a proper bailout loan, but stay on its feet by leveling the playing field.
Bill St.Clair
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