Corporate America's Sunshine Patriots

Up the Revolution
By MICHAEL WINSHIP

We went to Mount Vernon in Virginia a few weeks ago. It was the first time I'd been to George Washington's family estate since a whirlwind day tour of Washington, DC, when I was a high school freshman. Our guide then was a fast-talking cabdriver who interlaced his rapid-fire wisecracks with an impressive command of facts and figures, many of which may even have been correct.

Today, the Washington plantation, once in sorry shape, has been beautifully restored, from mansion to slave quarters. At two, state-of-the-art visitor and education centers, sightseers can learn all about the great man's life and times, including a sound and light presentation on battles of the American Revolution that features howling wind and falling "snowflakes" -- tiny bits of soapsuds pumped into the theater -- when Washington crosses the Delaware.

The whole thing isn't run by the National Park Service, as you might have expected, but by a private, nonprofit organization, the genteelly named Mount Vernon Ladies' Association (MVLA), which raises money from ticket sales, food, souvenirs and money from individuals, foundations and corporations.

A lot of money. According to the MVLA's most recent annual report, "In 2010, 47,242 individuals, corporations, and foundations contributed more than $17 million to the Mount Vernon cause." With George Washington a favored Founding Father of the American right, no small amount of those funds have come from such conservative contributors as the Heritage Foundation, the F.M. Kirby Foundation, the Richard and Helen DeVos Foundation, the Mars family of candy bar fame, and newspaper publisher Richard Mellon Scaife.

Conservative screenwriter Lionel Chetwynd scripted the introductory film at the site's orientation center. And during her recent bus tour, Sarah Palin had paid a visit just a couple of weeks before our arrival, writing on her website that daughter Piper mentioned to her how hard Washington must have worked "to keep that farm going." Stephen Colbert responded, "It's true. I cannot imagine how hard he worked, with no help other than his African volunteers."

A quick perusal of Mt. Vernon's annual report reveals that its many corporate funders include the Ford Motor Company, Toyota, the Distilled Spirits Council of the United States, Altria (formerly Philip Morris), Coca Cola, the American Gas Association, PricewaterhouseCoopers, M&T Bank, Stanley Black & Decker and BAE Systems -- the massive, British-based defense contractor that last year pled guilty to criminal charges related to bribery allegations and paid almost $450 million in penalties to the United States and Great Britain. (Wonder what the George Washington of slaughtered cherry tree and "I cannot tell a lie" fame would make of that?)

In fairness, they all have helped preserve a beautiful historic landmark, but as I looked at their names, I couldn't help but think that they and their big business colleagues could perform an even greater patriotic service to America by working to create more jobs.

Naive? Not really. After all, as of last week, as per the website Zero Hedge and data analysts Capital IQ, 29 public companies -- including Bank of America, JP Morgan Stanley, Goldman Sachs, GE and Warren Buffett's Berkshire Hathaway -- each have more cash on hand than the US Treasury. And as Citigroup's Peter Orzag, former director of Obama's Office of Management and Budget wrote on July 13, we need to be "as bold as we can." Says he, "The right policy response is a combination of more aggressive attention to bolster the job market now and much more deficit reduction enacted now to take effect in a few years."

So why not make a sacrifice bigger than a nice hefty grant to Mount Vernon or the historic location of your choice and commit instead to finding employment for at least some of the 14.1 million out of work? After all, the Republicans keep telling us these corporations and their rich executives and stockholders need every last one of their outlandish tax breaks -- because they're job creators!

Yeah, right. In May, when Fortune magazine released this year's list of America's top 500 companies, its editors wrote, "The Fortune 500 generated nearly $10.8 trillion in total revenues last year, up 10.5%. Total profits soared 81%. But guess who didn't benefit much from this giant wave of cash? Millions of U.S. workers stuck mired in a stagnant job market... we've rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans."

In June, a report from Northeastern University's Center for Labor Market Studies found that since the economic recovery began two years ago, "Corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than one percent." It goes on to declare, "The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented. The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome."

The report concludes that in this jobless, wageless recovery, "The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders."

A new study conducted for The New York Times by the executive compensation data firm Equilar found that the median pay for top executives at "200 big companies" last year was $10.8 million: "That works out to a 23 percent gain from 2009." The richest one percent makes almost 25 percent of the nation's income. The Center on Budget and Policy Priorities notes that the United States has the worst income inequality of the 24 industrialized nations that belong to the Organization for Economic Cooperation and Development -- more horrendous, in fact, than Pakistan and Ethiopia.

And yet a recent headline on CNBC's website reads, "Firms Have Record $800 Billion of Cash But Still Won't Hire." Maybe they've never heard the Bible's exhortation that to whom much is given, much is expected, a sentiment well understood by George Washington, who gave up the life of a gentleman farmer -- twice -- to come to the aid of his fledgling nation.

Just a couple of days before Washington crossed the Delaware during that bleak Christmas of 1776, with real ice, wind and snow -- no soap suds -- Thomas Paine famously predicted that "The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country." Today's corporate giants, blinded by greed, oblivious to the despair around them, are doing much the same. That can't last.

By the way, all those complaints about corporate tax rates and hanging on to their precious loopholes, subsidies and Bush tax cuts? The Center for Tax Justice, a nonprofit research and advocacy group, finds "the U.S. is already one of the least taxed countries for corporations in the developed world" -- as a percentage of GDP second only to, wait for it, Iceland. 

Up the revolution.

What the automobile has been and could be, but isn't...

Offshoring Jobs is the Reason Ford Is Making Record Profits

Michael Snyder | Oct. 27, 2010

On Tuesday, Ford Motor Company reported a record breaking profit for the third quarter. Ford earned 1.7 billion dollars during the quarter, which was way up from a profit of $997 million a year ago during the same time period. Ford CEO Alan Mulally is being hailed as a miracle worker, and investors are giddy about the future of the company.

So is all of this success by Ford translating into good jobs for American workers? No.

As described in a recent article on MSNBC, Mulally has been "revamping Ford’s U.S. and global manufacturing operation to be cheaper, more efficient and more flexible". In other words, Mulally has been getting rid of American workers in droves.

Since Mulally took over as CEO, Ford has slashed its North American work force by nearly half. Ford has shut down or plans to shut down a dozen U.S. manufacturing facilities. Today, only about 40 percent of Ford's 178,000 workers are employed in North America, and a lot of those jobs are in Canada and Mexico.

In fact, the number of Ford cars produced in Mexico continues to grow rapidly. The truth is that this is yet another example that proves that what is good for Wall Street is not necessarily good for average American workers.

Today, the average Mexican auto worker makes less than a tenth of what a U.S. auto worker makes in total compensation. In the new global economy, good jobs are going to where the labor is the cheapest, and that means going away from American workers.

Even the unionized workers that remained at the manufacturing facilities that Ford kept open were forced to agree to very substantial concessions to their labor contracts just to keep their jobs.

Meanwhile, literally hundreds of Ford dealerships have been shut down from coast to coast. All of this "dealership downsizing" has also come at a very high price - thousands of good American jobs.

So should we be celebrating record profits at Ford?

Not really.

The truth is that in the pursuit of profits, Ford has devastated quite a few local communities.

For example, Ford recently announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.

Closing that plant eliminates 750 U.S. jobs.

But don't people still want to buy Ford Rangers?

Yes, of course Ford Rangers are still quite popular, and Minnesota desperately wanted to keep that factory open.

In fact, Minnesota Governor Tim Pawlenty offered Ford a very generous multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory open.

But it didn't work.

Ford closed the factory anyway.

So where are all of those Ford Rangers going to be manufactured now?

Well, the statement about the plant closing issued by Ford did not reveal that tidbit, but it did offer some clues....

"Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy."

When you see big corporations like Ford use the word "global", what it really means is some place other than America.

So don't be too quick to applaud Ford for record breaking profits.

The truth is that if current trends continue, we are going to end up with literally tens of millions of unemployed American workers.

We are shipping factories, jobs and wealth overseas so rapidly that it is hard to even comprehend what is going on.

In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars.

Just think about that for a minute.

World trade has been completely and totally revolutionized over the past 25 years, and America is losing.

The United States has lost approximately 42,400 factories since 2001.

So how many more are we going to lose before our "leaders" do something about it?

As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.

The sad truth is that the United States is being deindustrialized. The big global corporations have figured out that they don't really need American workers anymore, and that is really, really bad news for the American middle class.

Without good paying jobs, the future of the middle class is incredibly bleak.

Mercury Goes the Way of the DoDo

Damn, this was a fine brand of automobile for many years. I put it to you the blog reader, that if they still made cars like the one in the picture below but with all the modern updates of today's automobiles, they'd have no problems selling cars, even during a depression. Mercury joins Pontiac, Oldsmobile, Plymouth, and Saturn on the scrapheap.

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Ford to End Production of Its Mercury Line
By MICHELINE MAYNARD

DETROIT — Edsel Ford conceived the Mercury brand in the 1930s as a way to fill the gap between basic Fords and luxury Lincolns. Now, that gap will again go unfilled.

Ford Motor announced Wednesday that it would discontinue selling Mercury models this fall, ending a 71-year-old brand that once stood for innovation and speed but that became a “me, too” division.

Mark Fields, the president of Ford’s Americas region, said Ford directors approved the step on Wednesday. He said the company would focus its resources on its core Ford division as well as Lincoln.

“As we close this storied chapter on Mercury, we are opening a very exciting chapter, not only on Ford but on accelerating Lincoln,” Mr. Fields said.

Mercury came to life during the Depression, when Ford was striving to keep pace with General Motors, which had passed Ford to become the country’s top-selling automaker. At its cultural height in the 1950s, Mercury became known for innovative cars like the Turnpike Cruiser, whose features included a power rear window, the “seat-o-matic” adjusting seat, and the “Merc-o-matic” automatic transmission.

James Dean, playing a rebellious teenager, drove a black Mercury coupe in the 1955 film “Rebel Without a Cause.”

Mercury joins a sizable list of venerable Detroit brands that have disappeared in recent years. In 2009, General Motors said that it would eliminate Saturn, Hummer and Pontiac as it streamlined after its bankruptcy filing, and it did away with Oldsmobile in 2004. Saab was also discontinued as a G.M. brand, though it will have new owners.

Chrysler dropped the Plymouth brand in 2001, and the Chrysler brand itself is considered by some analysts to be in doubt, now that the company is under the management control of the Italian automaker Fiat.

“This decade is for sure going to be remembered in the auto industry as a decade of consolidation, a renewed focus on profitability instead of going blindly after market share, and shedding dead weight in terms of dealerships,” said Jesse Toprak, vice president of industry trends and insights for TrueCar, a new-car pricing Web site.

Before Mercury, the two ends of Ford’s spectrum were its inexpensive cars and trucks, which the founder, Henry Ford, encouraged buyers to buy in the color black, and the sleek Lincoln models, which were known for their streamlined appearance.

But G.M. picked up customers by offering “a car for every purse and purpose,” a phrase coined by its president, Alfred P. Sloan Jr.

So, Mr. Ford’s son Edsel commissioned the development of the Mercury Eight, which went on sale in 1939. The car had a 95-horsepower V-8 engine that was 10 horsepower stronger than the Ford V-8, but it cost less than a Lincoln.

Sales were strong until World War II interrupted production. They prospered again in 1949, when the first all-new postwar Mercury models reached showrooms.

By the 1960s, Mercury had become a place for slightly different and generally more expensive versions of the cars sold by the Ford division.

“Mercury products have been nothing more than modestly restyled Fords for decades, and that’s not how you build or maintain a brand,” said Karl Brauer, a senior analyst with Edmunds.com, a Web site that offers car-buying advice.

Mercurys of the 1960s included the Comet, a stretched version of the Ford Falcon, and the Cougar, originally a muscle-car variation on the Mustang but which was three inches longer and boasted a gutsy front grill that some likened to an electric shaver.

In the 1970s, because of the energy crisis and new fuel economy standards, Mercury made smaller cars, including the Capri, initially built in Europe. When Ford developed the Taurus sedan in the 1980s, it gave Mercury a version called the Sable.

More recently, Mercury’s lineup has included the Milan, its best-selling model, which is based on the Ford Fusion, as well as the Grand Marquis, a rear-wheel drive car that has been sold by Ford in some fashion since the 1970s.

Mercury sales peaked at 580,000 in 1978, also a year of record hourly employment for the Detroit auto companies. In 2009, Ford sold fewer than 93,000 Mercury models.

So far in 2010, Mercury sales are 41,680, up 11.6 percent from last year, but they make up only 0.8 percent of the American car market.

Mr. Fields said Ford has no stand-alone Mercury dealers, which should simplify shutting the division. He declined to say how much closing Mercury would cost Ford. Mercury models are sold by 1,700 dealers, which also have a franchise with Ford, Lincoln or another brand.

Bob Tasca Jr., a Rhode Island dealer who heads Ford’s national Lincoln-Mercury dealer council, said dealers had pressed Ford for years to tell them the fate of the division and finally learned this year that a decision was at hand.

Although expected, Mr. Tasca said, the step was fraught with emotion. For dealers, he said, “there’s going to be some cases where a lot of them are going to make it and prosper and some are going to go out of business.”