We are having a similar issue with Pratt & Whitney Aircraft. They are closing down several large facilities in the state and moving them to Georgia. P&W has been a long-time institution in the state, but a combination of the local Machinist Unions and the poking and prodding by the state government has pretty much killed any chance that they'll stay. Naturally, thousands of smaller businesses, from machine shops to dry cleaners will be affected.

M, anytime you want to make a run for national office, you'll totally have my vote.

While I understand your point you must understand also that union members(the people that actually do the work) only want there fair share companies dont pack up and leave town because they cant afford to meet the demands of the unions, they pack up because they dont WANT to meet the demands of the unions. ever wonder why workers in other industrialized countries have such good working conditions? hell most European workers enjoy 30 - 60 days paid vacation a year? have medical insurance for ELECTIVE medical procedures ? well unlike here in the good ole usa in most of europe there is a 10-15% difference in the living standard or pay between labor and management while here in the usa it averages 30-60%
People really need to learn the free market system only works part of the time.
during a labor shortage it works great but during a labor surplus the flaw in capitalism is exposed.

Tom,

The trickle down effect you mention is the saddest thing in all of this. So many small businesses in our area rely upon Boeing employees, and even Boeing itself, and those are the people who will suffer the most from the roughly 4000 jobs that will be created in South Carolina instead of Washington.

This can though be a positive for our state if it serves as a wake up call to labor, and indeed government at all levels. If it forces meaningful reform.

Thank you very much for your kind compliment, I would indeed be honored to have your vote!

M

Mortalez,

The man who can dream up and design a wing edge that is capable of producing modern jet flight is also capable of building that wing edge. The man who can not dream up and design it can only build it. As a result of that fact, reason insists that I must disagree with the notion that the people on the production line "actually do the work." Everyone, from the Chairman to the Janitor does the work.

That said, I do agree, wholeheartedly, with your point that the good working conditions we enjoy today in America are largely a result of the battles unions fought for us in the past. There was a time in which workers were horribly abused and unions led the fight against those abuses.

I am not anti union. I am against union leadership that fails to understand economic and legal reality, union leadership more interested in personal power than job protection.

While Europe has many fine qualities, I do not think that the European system is a panacea, nor something that we should emulate. Rather, I firmly believe that Europe needs to emulate the United States. If it were not for the United States Europe would, today, be living in barbarism cringing at the death camps located throughout it's territory.

It is true that Western European workers, when they can find a job, enjoy many benefits that American workers do not. This is not though an indicator of relative economic strength, it is a result of a barely propped up economic and social system in most of Western Europe that is destined for collapse.

The closer our own system gets to the European system, the closer we too get to eventual collapse.

Capitalism is not a perfect system. Utopia is impossible. Capitalism is however the best system available for providing for everyone. The vast majority of Capitalism's perceived flaws are not flaws of Capitalism, rather errors created by governmental meddling with the market.

M

I see a very strong resemblance between union leadership and US government at the federal and state level. Once congressmen and senators are elected, they evolve to support their re-election, rather than to serve their constituents. There are rare exceptions.

The only way to deal with union bosses and our esteemed servants of the people is to boot them out of office at the next election. Sure, another worthless corrupt bum may get the job next time, but it could not be worse than what we have now. That goes for the presidency too.

Those governmental systems were put in place because big business abused its labor in the first place. I live in Texas a so called right to work state(meaning very little government interference but I have also lived in the north east(very union heavy) and I can tell you working conditions here suck, you under constant stress and fear for your job because there are no state labor laws to protect you and I'm not talking about protection for lazy workers(which is a side affect of a strong union I will admit) but older workers feel the stress most of all because they have the most to loose( higher pay which is well earned)
capitalism is flawed because the people arent taken into account yes during a labor shortage it works for the people but those are too few and too far between. capitalist people rarely want to pay people what a job is worth makes no sense to pay the people that work the hardest the least while the fat lazy bastards in the climate controlled office get paid the most. I have worked under enough boss's nephews, cousins, sons best friends uncles etc etc etc ...... to know those in power did not always earn their place there. I also understand the biggest misconception of the free market system, the best does not always rise to the top. I have seen boss's pick the lesser of technologies based on cost.
I've seen the best employees let go in favor of lesser experienced workers based on pay.

Susan's pet,

I think that there is a great deal of truth to your position.

I've not been a union member, so am not sure how union leadership elections work, but surely it must be possible to replace poor leadership.

M

Mortalez,

I agree with your historical view, unions were needed when they were founded to redress legitimate grievances against management.

I also agree that many of the good protections all employees enjoy today came about because of the sacrifices made by union members.

From that point though, our opinions do diverge.

I do not see a huge divide between the goals of employees and employers in the modern economy. Organized labor it seems wants to create a perceived wall between labor and management, but I think that such a wall is simplistic and incorrect.

If an employee wishes to remain employed, the company he works for must remain profitable. Just as it must remain profitable for the man who owns the company for him to survive. The goals are not divergent.

Additionally, we must consider ownership of our large corporations. They are not only owned by the guys who sit in the offices, they are owned by the American people. We own Boeing. We own it in our retirement funds, we own it in our investment funds. Each of us own Boeing, each of us have a stake in it's survival. That includes machinist union members who work for Boeing. Loosing sight of that fact leads to innumerable problems.

In a capitalist system there are winners and loosers, capitalism brutally punishes errors. Certainly, as you mention, incompetent people are sometimes promoted to lead companies. In the course of time, capitalism will punish those errors, companies that are managed with incompetence will fail and be replaced by companies that are run with competence. That is the beauty of the capitalist system.

That companies with incompetent management (GM, Bank of America et. all) continue to survive is not a failure of capitalism, it is a result of the government interfering with capitalism. It is fascism, not capitalism.

That said, I do agree with you, capitalism is not perfect. It is simply the best system possible for the greatest number. Utopia is not possible, and is therefore not an option.

M

Mortalez,

Please don't think that I am attacking you. I am simply commenting on what you said, and the way I see things.

There was a good reason for the unions: to protect the workers agains money- grabbing owners. However, times have changed, and so have unions. The workers still get screwed.

When a union orders a strike against a corporation in behalf of supporting the union bosses agenda, the workers don't benefit. Indeed, they lose. Even worse is when the union succeeds in receiving unprecedented and unrealistic gains that the corporation cannot sustain. As we have seen with respect to GM the union won, the taxpayers lost. The workers? It remains to be seen when Americans no longer want to buy the vehicles this government owened company makes.

I commend the Ford Motor Company who did no succumb to the temptation of taxpayer provided funds. The union could still put it out of business, as major issues are pending as we speak. But the workers, the members of the union have spoken on some of the issues: they don't go along with the union bosses.

As Milliscent said, these large croporations are owned by us, people who had a few dollars to invest after having paid social security, medicare, income taxes, and union dues. When The government illegally takes over such corporation, as this administration did, we, the shareholders, lose. The final outcome is that nobody wins.

The union member workers are pawns in this power struggle. They are still victims of nepotism and favoritism on the job, only this time it is the union that dictates the terms. What a worker still can decide is whom he prefers to be screwed by. At the end, it does not really matter.

About the compensation for the CEOs and upper management, I agree that it may be obscenely over done. On the other hand, if they keep the corporation successful, they deserve every penny they get. If you disagree, wait until the government bureaucrats take over after having driven the professionals out of business. At that point being a member of a union will be worth as much as the plastic card that you carry.

Milliscent-

A business colleague just returned from a visit to Alabama. He ticked off the many auto production locations humming with work.

The South's mostly 'right to work' laws, open shops and general focus on business climate have, in time, made it the preferred production region for the US for many lower-value-added goods. Such as cars.

Ironic, how the original WWII flow of workers north to factories has, over 60 years of union excesses and greed, reversed.

I, of course, agree with you and disagree with Mortalez.

To Mortalez, I would note that union leaders helped cause many current problems by agreeing to future funding of pensions and health care, rather than taking cash upfront and providing individualized accounts for their members.

Much bad decision-making by corporate managers stemmed from a foolish belief, shared by equally-inept union chiefs, that putting unfunded employee benefits on balance sheets was ok, because, some day, they would magically be funded.

But, here's another conundrum.

In what parallel universe do you suppose anyone can pay a person a living wage for, say, 40 years, PLUS retirement benefits which allow them to live for another 30 years?

Who is going to come up with that essentially extra 40% income so a person can just do nothing for 30 years and get paid almost what they earned while working?

That simply defies common sense, and we are now, all, in every sector, seeing it come apart at the seams.

Look for public union pensions to be repudiated by state governments and voters, following the givebacks in: steel, airline, transport and autos.

Another question.

What will California, then Illinois, NJ and Michigan do when voters simply move out of state, leaving public union members with nobody to pay their exorbitant pension claims?

-saratoga

I have to chime in here since I am involved in this industry. I have been a union guy and found it necessary but I also find that at times Unions exist to create conflict so that union brass have a justification for their jobs. Boeing is facing stiff competition from Airbus, Bombardier, and Embraer....They union must recognize that now aint the time to put out for benefits that may very well make the best aircraft company in the world join the ranks of McDonnel, Douglas, which is now part of Boeing because they just could he government subsides offered by the EU.....that is the unfair competition...The "jungle jet" is getting lots of help from Brazil's government and its killing the traditional manufactures. I have seen far too many times unions run a company into ground.....there has to be a happy medium between executive pay that is outrageous and union demands also outrageous...in the end the cheapest product not the best is going to win and lets hope Boeing can keep their costs under control because they are the best plane ever built.

Susan's pet,

Thank you for your latest comment, there is a great deal of truth to it.

Like you, I must admire Ford's management and directors for turning down the 'stimulus money.' I will not need a new car for about two years yet, but I believe that my next one will be a Ford for that very reason.

M

saratoga,

Assuming that current trends continue there will be no manufacturing left in the northern ‘closed shop’ states within a very short period of time. That is, I suppose, Federalism at its finest. When forging our nation out of 13 unique states the founders understood that states would have to compete with each other in order to be successful, it is, I think, a good thing.

Luckily Washington does not rise and fall on Boeing as it did in the past. We now boast a very well diversified economy not dependant on any given sector.

You mention the length of time people live in retirement, and it is something I’ve given some though over the years. It seems to me that the 62-65 retirement age was created long ago when people didn’t generally live too long after. Now we are living much longer, and recent medical advances (assuming that socialized medicine does not halt most of those advances) assure us that we will live much longer than our parents. I think that we will have to rethink our working ages for we are destined to live much longer than most people’s money could ever hold out.

Clearly government run health care will put an end to most future medical discovery; perhaps pension managers can look upon that as an unintended benefit to their struggle as average age of death stops rising. ;-)

You are certainly correct that something will have to be done with the public retirement systems. I do not know about other states, but in this state our retirement systems have gone through three major revisions, each promising significantly reduced benefits.

M

bdenied,

Thank you for offering your insider perspective to our conversation here.

As an outsider, it does seem that there is truth to your primary point. Airlines seem to be forever in financial disarray, as a result they will be forced to purchase their planes based upon cost of ownership over other factors.

I think we also must realize that there have not been significant advances in commercial airplanes for a great many years now. Planes are planes are planes. Commodities. Computers get faster and more powerful each and every year, things constantly improve. Planes do not. Commercial airplanes are actually going backwards from the height of the Concorde. Why are they not bigger and better as time passes? I don’t know, but I think that when it comes to competition it is important to remember that they are all largely the ‘same old same old’ now. Boeing, Airbus, the next as yet unknown company, there is little difference. Little to justify paying a premium over a competitor.

M

Milliscent-

Regarding airplanes, I think it's a terribly complex problem.

On one hand, Boeing et al are quite like auto assemblers, no longer really adding so much value as assembling off the shelf components and subsystems.

Jet engines have probably reached diminishing returns to R&D. Same for things like composite airframes.

Then add the differing economics of long- versus short-haul aircraft.

There is work on an futuristic, out-of-the atmosphere ultra-long-haul craft, but that's not quite what you mean.

I find it disappointing that bdenied reflexively used the phrase "executive pay that is outrageous."

Typically, only a few very senior execs get the sort of compensation that triggers that phrase. Perhaps the worst-off are the mid-level management with little protection or perks.

-saratoga

Milliscent-

Your comments regarding mine are apt.

I agree with your speculations on govt health care 'solving' the aged population problem and, with it, that companion issue of outliving one's pension assets.

Ironic, indeed.

But, seriously, a few states will shortly, I believe, trigger very interesting bankruptcy questions. Since I left that comment, I have read that Detroit is truly very close to imploding from its population exodus, leaving horrendous pension obligations with no real income stream to service it.

How long will it take for people to understand that long term economic promises are simply not safe. Not without cash escrow accounts and sinking funds.

Duh.......

-saratoga

saratoga,

While generally I agree with you and do not find fault with executive compensation, no matter what its level, I do think that there are abuses out there.

Certainly the ‘too big to fail’ stimulus sucking bank executives were and are overpaid. Any moron could have bankrupted Washington Mutual, it doesn’t seem like there was much of a point to paying out a big salary, my dog could have done as well, and he will work for treats.

Those executives give the vast majority a terrible name I fear.

Beyond that though, I do agree with you, a solid executive who creates shareholder value should be extremely well compensated.

M

saratoga,

This nation has not suffered a period of explosive runaway inflation in many generations. In my view that makes us vulnerable.

I imagine that every single dollar of public pension funds will be paid. Simply picked up by the federal government which will pay them via inflating the currency.

Every dollar will be paid, but those dollars might be worth extremely little.

The great bulk of people don't seem to understand what causes inflation, so it is most expedient for politicians to simply inflate government obligations away.

M

Milliscent-

Regarding your view that municipal union pensions will be paid in full, may I remind you that monetary policy is a federal concern, while state and municipal union pensions are, of necessity, a state- and local-level concern.

I'm not sure your envisioned result will occur, because there hopefully will never be that much inflation, such that those pensions could be safely paid out at existing valuations.

-saratoga

Ms M. Good questions and let me try to answer a few. First you are somewhat correct and somewhat incorrect. Planes have made fantastic developments over the years. Jet engines today produce tremendous thrust to weight ratios and burn far less fuel than engines of even ten years ago. Most jets are high bypass engines meaning some have as much as 90% thrust generated by compressed air bypassing the core and only 10% from fuel being burned. Pretty darn efficient. Airframes are capable of going Mach 3 and maybe even more, but environmentalist prevented a Mach 1 airplane from going Mach 1 within the Continental US and Europe. so the Concord was limited to Mach speeds only once over the ocean, and it had to go sub sonic once "coasting in" not real efficient. No sense in developing new supersonic engines if you cant use them.....planes dont need to be bigger as bigger is not always better...wait until the first airbus 380 crashes with 580 humans on board and you will here some outrage about the loss of life. Composite materials are not always the best and those planes with composites seem prone to having their tails fall off...I kinda like metal myself....the new Boeing is going composite and its frought with stress management problems.....If we truly want to advance, we are going to have to come at it from environmental, economical and practical standpoints....the bright side is that some of the planes are and have been around for 40 years and they fly like the day the came out of the factory....not a bad return on investment

saratoga,

I do understand that local, state, and the federal governments are supposed to operate in different spheres.

That those powers not specifically granted to the federal government are all reserved to the states and their political subdivisions.

That you and I understand this though is not in my view completely relevant.

Our United States Congress along with the Executive and Judicial branches of that federal government does not understand it.

The federal government is on a crazy growth spurt and has been for generations. The folks who make it up will see economic crisis at the state and local levels as another chance to take power federally. They will not allow the public pensions to go unpaid, they will simply federalize them.

That is my view anyway.

M

bdenied,

I will of course bow to your superior knowledge about the advancements we have made.

That said however, the Mistress is an impatient woman. She will view air travel as having improved when she is whisked around the world at the Mach 3 you mention.

I do know that the NIMBY's of the world stopped supersonic travel, but alas, I think that we, and the industry allowed them to do so. The battle was not properly fought or it could have been won.

M

Ms M...Impatient....me I want to fly higher faster and further than anyone previously....too fast is an oxymoron....like being to damn rich...I could not agree with you more and dont get me wrong, we need some serious advancements to take place......if the regulators would step aside I could fly you mach 9.......ok an exaggeration but you get the point

Milliscent-

You may be correct. If so, I truly am very worried for our near term fiscal prospects and the dollars demise.

-saratoga

bdenied,

I agree, there is no such thing as too fast!

M

saratoga,

Let us hope that our dollar is not inflated away to nothing, but if we insist upon spending trillions more than we have, it is eventually bound to happen.

M