BOEING

I was sent one of those group emails and someone was visibly upset with Boeing building a regional repair facility in India. To them it was just another indication of the failure of America to remain competitive and one more step in "outsourcing." How many more jobs and industries can America outsource? Where is the nation's wealth being created? I don't think this is a left or right issue, although each political faction may have a different explanation. Occasionally I see Lou Dobbs on CNN and he has really been hitting this issue. Also someone sent me Newt Gringrich's response. I am not a big fan of Newt for many different reasons, but it appears to be a very well thought out response which I intend to read carefully.

Outsourcing is not necessarily the problem if America's creative juices are flowing. However, if the flow of computer jobs to India and China continues, America needs to be moving to the next generation of whatever creates wealth and maintains a standard of living. In the past we have seen the textile industry move out of America, but with new technologies and ways of creating wealth, I don't think anyone has missed it. I know in the short-term it created problems for workers, but the transition was made. It is being made in the automobile industry now--the days of Ford and GM are finished (Chrysler is already German owned).

But if America is complacent, we face big problems 10 years from now. But also I read that Japan and European countries such as Germany are also experiencing outsourcing. Volkswagen has a major production facility in Bratislava, Slovakia

I found this person's frustration typical, when I asked for a response. My only problem, and probably yours, is that we are not 69! And some of you may have a different eschatological view! Also some American cars have more foreign parts than a Toyota or Honda.

Good question, I could expound on it for hours but the bottom line is that we are pricing ourselves out of the market. We can't just keep increasing wages without there being a corresponding increase in performance, i.e. productivity, quality, service etc... . Government is talking about a higher minimum wage which is raw inflation. It doesn't just raise the wage for those at the bottom, the whole scale is jacked up a notch. If you move the new guy from six dollars an hour to seven dollars, the guy that was getting seven is going to be angry unless he gets eight dollars an hour. Union people like it because the whole scale goes up and the union dues are based on the wage rate.

In agriculture where they are competing with Mexico and Central America, they can't raise the sale price of their product because of the competition. Their only chance is to find low wage labor or some type of mechanized more efficient way to do it.

In 1978 I was plant superintendent of a plant building work-over rigs in Victoria Texas. There was such a demand that our normal suppliers couldn't meet our needs. For example we were getting the draw works brake wheels made of cast steel from Latrobe Pennsylvania. They started giving us lead times like 6 months that we could not live with. We went on a world search and got a bid from Japan for 30 day deliver air shipped and at a cost significantly lower than Latrobe. We were afraid of quality but we had no choice but to try them. To our surprise they were much better than the Latrobe product. Do you think we ever went back to Latrobe. But we didn't tell our competition where we were getting them but the found out soon enough.

I was a Ford and GM man having had Fords, Chevy's, Pontiac, Oldsmobile's and seemed to always have problems with the service departments. The problems weren't that bad but I just couldn't get them fixed and sometimes I would get the car back with the problem fixed but something else was wrong and that was the last straw with Olds. I bought a 1983 Maxima and put nearly 200,000 miles on it in 10 years. But I don't know anything about Nissan service since nothing ever went wrong with the car. I finally sold it because I wanted something newer and would have got another Maxima except the I got a deal on a 93 Camry that I couldn't turn down. I'm still driving the Camry today with nearly 200,000 miles on it and currently have no need to sell it unless I want something for show. I still have the original exhaust system on it. I took it in to be checked at about 70,000 miles since I had never had a muffler that lasted that long. The mechanic looked at me like I was joking and said that system will outlast the car, it's all stainless steel. It's beginning to look like it might even outlast me.

I had a friend that got a Tarsus at the same time I got my Camry. He had more glitz and bells and whistles and liked to rub it in and couldn't understand why anyone would buy a plain Jane Camry. Three years later he was having major problems, radiator, transmission, alternator, etc, not cheap little things. Seven years later the Tarsus was junk. I've been driving my Camry for 13 years with no major repairs and I'm still getting over 30 MPH on the highway and above 26 in town. A couple of weeks ago I was riding with a guy with a relatively new Chrysler which was beautiful but I was irritated by the road noise.

I was watching CNBC one morning and they were interviewing a GM big wig. They asked him what they were going to do to get back on track. He started talking about there new styling and a bunch of glitz which really shot my adrenalin up. I fired in an e-mail and said forget the glitz and work on quality. Since the interview was still going on they asked him about more quality and less on the styling and he said no it's styling we need, we have to sell cars in California. I fired back another e-mail asking how explained the Camry success, which was about as plain as you can get but pure quality. By that time the interview was over so I didn't get any answer from the GM guy but CNBC e-mailed me back and basically said, good point.

When Ford was competing with GM and Chrysler, quality wasn't a big thing since they were all equally bad. For some reason they still haven't recognized that it isn't business as usual. Toyota has been around for nearly 50 years, then there is Honda and Nissan that came later and the big three still haven't figured it out. And now we have Hyundai from Korea that is getting better quality and overall value ratings than US cars of the big 3. I think we are our own worst enemy.

Lincoln is bragging that they are now giving a 70,000 mile warrantee for the power train, Hyundai's is 100,000 for the power train and 60,000 bumper to bumper. Lincoln is a Joke!!! Lincoln is bragging about something they should be ashamed of.

We may have to have a depression to get things back on track.

We are falling into a trend of Socialism which will bring us to an end that won't be pretty.

In 1992 my company sent me and another plant manager to Europe to look at labor saving equipment. In Europe if you hire a new employee you usually have to keep him for the rest of his life. For them if they can find a machine that will keep them from having to hire that person and the machine costs less than $200,000 it's a no brainer, you get the machine if you can afford it. Of course you see unemployment rates of around 12% or higher. I think in places in France unemployment may be over 20%. In our case we came home with all the numbers and started working on ROI studies. In about every case we were at a break even situation. If the union forced increased wages, we would automate.

You have to compete to stay in business and if you can't do it in the US, you find someplace else where you can or you close up shop.

A significant increase in the minimum wage could send millions of jobs overseas. There is no free lunch and we are living off borrowed time.

But I'm not worried at 69 I think I can take what ever comes but I'm glad I don't have to depend on a job. Actually I'm listening for the Trumpet and watching for Christ on the cloud. I'm ready for the Rapture. That's my exit strategy.