It's been awhile, I hardly know where to start. There are so many important subjects that we need to address. The other day a good friend, Bob Fria sent me an editorial he wrote that I agree with and is right on the money. Please read:
"Take a hard look at bankrupt company retiree pension costs for the PBGC (Pension Benefit Guarantee Corp.)
General Motors alone has 500,000 retirees on the rolls. Pension costs transferred to the PBGC, by law, would absolutely bankrupt the PBGC coffers, which is already stretched to the limits. The PBGC is funded in full by congress, to absorb B-K company pension obligations. With current liabilities, it will be itself out of funds within a few years. In addition to all the new bankruptcies which will occur under this economy nationwide, the PBGC will be beyond its capabilities next year. Adding auto manufacturer liabilities will become a MAJOR congressional obligation with overwhelming tax payer consequences over several hundred billions of dollars, a cost surely to exceed any investment today in the industry. It is incumbent on the Government not to allow any of the big three to enter bankruptcy, for this reason alone.
I speak from experience. I am a retired United Airlines Captain now receiving severly reduced pension payments from the PBGC after UA entered bankruptcy several years ago. The United problem alone nearly caused insolvency for the PBGC."
19 comments:
Mr. Iacocca -
We've met - you came to our Car Dealership in San Diego - and my parents and I came up to meet with you at your offices in LA around 2001 or 2002. We were discussing the ebikes at that time. Since then, we've obvioulsy moved away from those and moved our focus back 100% to selling GM Cars and Trucks. It's hard to believe we're here now - anxiously awaiting any and all news about GM. I have a tremendous amount of respect for you and all that you've accomplished - I'd love to hear your thoughts on the current state of GM - how they got here and how they can "fix" it. Sincerly, Jennifer Brown, Marvin K. Brown Auto Center, San Diego, Ca. jennifer@mkb.com
This is the case of someone making promises they couldn’t keep. As I said before, things will have to get worse before they get better. We will all be going through some rough times. All of those people taking early retirements probably didn’t help the situation with PBGC either.
Mr. Iaccoca, I would like to hear your opinions about too few companies in a market, the value of an MBA vs common sense, whether small businesses are better than larger ones, whether the laws of incorporation should be changed, passing laws to alleviate barriers to entry into the marketplace, and whether lawmaker have become too dependent on experts. If this trend keeps continuing instead of an open-market, free-trade capitalist system we may as well just have the government own and run everything.
Mr. Iacocca--I just read an e-mail attributed to you--about the future of our nation. I agree with much of what you write about. I'm not sure I agree with the politicians not knowing what to do about it, though. I wonder that perhaps they just have something else in mind. What I would call socialization by increment--they call, bailing out main street. What I would think they should do with illegal aliens is--send them home. They assert that they (undocumented workers) only do jobs Americans won't do. Could this have more to do with the North American Union than the United States? I wonder! I wonder what opinion the 2 border patrol agents who were imprisoned might have. Yes, I agree. The border leaks like a sieve, the American public is being burdened with taxes they'll never be able to repay with this bailout. But, ask many Americans and they think the election of the first black president will be change enough. I don't care about the race of the president, but I do care about the change that he will inspire. Change doesn't necessarily mean better. Not all change is good. You say we must work to change this nation--where do we start? It seems that at every turn, our lives have been made more difficult by the Patriot Act. If we were to even intimate some kind of action, we'd be given more than we're able to deal with. Like it or not, it's difficult to effect change from a prison cell--ask the border patrol agents languishing in prison, waiting to be pardoned by the President. I wonder how long they'll wait.
Mr. Iacocca,
My brother in-law also worked for UA and lost a great deal before he left after watching the facility at Indianapolis dry up around him. I have no doubt that the PBGC will be unable to handle the weight of any of the automakers should even one crash into bankruptcy. As your friend Bob indicates the money given by the PBGC is a pittance of the amount he’d receive under his original pension anyways and of little help to those poor souls who thought they could believe in the company they gave their lives to.
My mother in-law actually is getting a small pension from Chrysler, she actually served as your secretary for some time and ended her career as a secretary for the Union. Her name is Karen Lawlor, and I fear what dependence she’s placed on her pension will be lost soon if something isn’t done.
That being said I believe we still have to focus on an important factor in any decision to save even a large corporation. Under what terms does congress allow the money to be handed over?
I’ve heard the $25 billion likened to “bread crumbs being fed a crocodile” and I would agree. If these automakers won’t ‘clean house’ and agree to make drastic changes in their management and dealings with the unions we may find the automakers quickly becoming a ‘government funded enterprise’ which ironically is as poorly planned and money hemorrhaging as most government endeavors.
On another note I think the PBGC could use some much needed support so that those who relied on their pensions, in a time when that was common, are taken care of the way they should be. They gave their time, they paid their taxes, and they moved this country forward, seeing that they get what’s coming to them should be federal mandate.
Sincerely,
Mike
Hi Mr. Iaocca,
I just read your latest book last year and was amazed at how many of your predictions about the greed of our business world taking our US economy down. Well it's happened now, and with the 3 car makers begging for their lives in Washington - I wonder if anyone has asked for your opinion? You've done it before - seems like a "no brainer". Have you heard from President Bush or President elect Obama??
Mr. Iacocca,
All during the last couple of months I have been saying, "what would Lee Iacocca do?" I first saw you on KYW tv in Philadelphia when you introduced the minivan prototype on Maury Povitch's show (...quite different from the show he has now, of course) and have followed your career ever since. Please tell all of us what you think this country should or shouldn't do about the crisis in the auto industry? I have some questions about how the executives let things get this far in the first place; but will not make this too long a message. thank you.
Linda
Ramona, CA
Mr. Iacocca,
Regardless of the loss of the Detroit’s market share, aren't the automakers already doomed due to their unsustainable pension programs? From what I understand, many large pension funds are condemned to fail due to over commitments made years ago and current changes in the global economy. If so, it seems that a Bridge Loan will just buy a little time while we hope for a miracle. Your thoughts?
Regards,
Matt McCoy
Los Angeles Ca
Mr. Iaccoa,
I have read your book and agreed with your views on the condition of our country. I even wrote you in for president after reading your autobiography "Iaccoa". However there were two areas that I found unsettling in your latest book, 1) your unrelenting Bush-bashing and the fact that your supported Clinton on the NAFTA bill. I do admire that you admitted that it was a dismal failure but I have to wonder why you didn't see that before you advised in favor of it. All that said, I am very glad you are speaking out on the internet as I believe you are a trustworthy, honorable man and will happily listen to your views as an intelligent voice to debate my own views against. I hope and pray that we can amass all the moral and patriotic leaders we need to restore our great nation to "one nation under God" Blessings, Maureen Fike
Hesston, KS
To set the record straight, the PBGC is not funded by tax dollars. Also, a bankruptcy by one or more of the Big Three would not necessarily mean their pension plans would come to PBGC. There have been a number of cases in which companies have gone into Chapter 11, reorganized their debt, and emerged with their plans ongoing. The agency continues to work with all companies that are in financial trouble to help them keep their plans intact so workers and retirees will receive all the benefits they were promised.
Finally, in the event that one or more of the automakers’ plans came to the agency, the PBGC would take in their assets as well as their liabilities and would not need taxpayer assistance for the foreseeable future. –Marc Hopkins, public affairs officer, PBGC
Marc Hopkins of the PBGC says "a bankruptcy by one or more of the Big Three would not necessarily mean their pension plans would come to PBGC", operative words here are 'not necessarily'. Additionally, he states "PBGC ... would not need taxpayer assistance for the foreseeable future", again politically correct key words. Go to Google,and look up the "Michael Brush Article Index" and see the financial commentator Michael Brush article of 11/26 titled "Coming Up:A Huge Pension Bailout?" I stand by my comments to Mr. Iacocca.
This week, General Motors is closing its last factory in the Dayton area. Thirty years ago, GM had ten factories here employing 34,000 people. That number is now zero.
The factory makes SUVs. It shouldn't be hard to modify it to make hybrid SUVs - certainly FAR less costly than building a new factory!
Local "leaders" have asked for a part of the bailout money to pay for tearing down the factory. You read correctly! They want to tear down the factory! As if vacant land is somehow more valuable than a huge production capacity!
The Dayton area is a GIGANTIC opportunity waiting for someone to make use of! We have probably the world best collection of technical talent, dozens and dozens of factories brimming over with every kind of manufacturing capability, affordable housing, amenities as good as any major city ...
The ONLY thing the Dayton area lacks is COMPETENT MANAGMENT! Any entrepreneur with two brain cells to rub together (and some money to invest) can make BILLIONS here! There are DOZENS of fortunes here waiting to be made! Several major industries waiting to be built!
The Dayton economy has been dominated by large, bureaucratic organizations for decades. The managers are thoroughly steeped in bureaucratic values. All entrepreneurial values have been educated out of them!
Bureaucracies systematically eliminate everyone who engages in any activity other than bureaucratic infighting, gaming the system to obtain promotions. These managers truly are penny wise and BILLION foolish!
Dayton Ohio is the LAST place in the world that should be having the kind of problems it’s been having! Surely no other community has ever made so little use of so great a wealth of assets!
PLEASE contact me to get some new products going here! I have MANY dozens of potential new products to get into production! For example, I have a new air traffic control system - a completely new concept, from the ground up. The existing system was okay several decades ago, but now it's woefully obsolete!
I also have a new kind of variable flow hydraulic pump - far more simple and durable than existing pumps. It would be the key component in automatic transmissions with about one tenth the number of moving parts of existing transmissions.
I have many dozens of other potential products, and a city full of idle factories to make them in!
Trouble is, the local economic development people are obsessed with bringing more government jobs here. They don't even return my messages!
The Federal Reserve has created several TRILLION dollars just in the last few months! Anyone with even the least bit of understanding of economics knows that such an astronomical increase in the money supply will cause HYPERinflation! The dollar will soon be worth ZERO! Anyone with dollars needs to convert them into PHYSICAL ASSETS!
And with the dollar so low, America will soon be THE low cost producer in the world! The USA has a HUGE future in manufacturing!
Is there anyone out there with the vision to seize such a PHENOMENAL opportunity?
Jeff Putman, P.E.
Dayton Ohio
je_freedom@usa.net
December 26th, 2008
Dear Mr. Iacocca.
My name is Igor, I am a trainee at Brink`s (The Money Movers) an American Company in Brazil.
It is a great pleasure to contact you through your site. I am having a course in São Paulo sponsored by my Company and I have to fulfil a task whose aim is to make a speech about your book “Where Have All the Leaders Gone”. This book I have chosen among others, because I am an admirer of your performance as Ford and Chrysler Chairman, besides I am a Mustang fan.
The objective of this trainee project that I am participating with other 20 mates is to make of us leaders to occupy management positions in some branches throughout the country. I think that the contents of your book will give valuable information for all the future young leaders worldwide.
I would like to receive from you some words of stimulation for the whole group of participants in this project, and I will be glad to transmit to my fellows your message.
I am sure that all the team participant of this course will be very thankful for your words.
I am particularly very obliged for your attention.
Awaiting a further word from you I am,
Sincerely yours
Igor Marques
E-mail: imarxs@gmail.com
Mail Address:
Igor Marques
Caixa Postal 1151
Agência Centro
Porto Alegre – RS
CEP: 90001-970
Brazil
Dear Mr. Iacocca:
I just read your book and I can't say enough good about it. I literally stayed up and finished the book in one sitting; I could not put it down.
I would really like to hear your thoughts on some of the criticism thrown at the Big 3 during the last month. Listening to the talking heads in Congress, from their lofty 18.4% job approval rating cry that the the Big 3's business plans were all wrong is particularly offensive.
I have been very vocal in my office about the disgusting way that the GM/Chrysler "bailout" is being treated. Why begrudge them a bridge loan for 5, 10, or even 15 billion each when the Fed has already streamed over $127 BILLION into the criminally stupid AIG group? Why are their top people going to retreats on the taxpayer's dime, yet GM and Chrysler have to immediately cease their whole corporate air fleet ops to get their loans?
I hope you can make an impression on the next administration as this one is a lost cause and has been since 2003.
Mr. Iacocca,
I WILL BE THAT MAN YOU TALK ABOUT, AND I WILL BECOME THAT LEADER you discuss in your book and on this website.
If you search my ancient internet posts and follow what I have been pushing for years, you will see that our goals and plans to set America back on track, do not differ.
Funding for my US Auto MFG Company (& more) is so close to reality and after several rounds af heartbreak and scandalous investor groups... We are up for a new round of funding potentials.
Your input will make the difference! I can and will save this country... Yet I can use that one last "KEY COMPONENT" to close the deal. You seem like the key right about now.
Mealer American Motors Corporation and my associate companies, Mealer Electronics covered under Mealer Companies LLC, will be the cornerstone to the new American workforce. I will die making this happen and creating a new American MFG workforce, if that is what it takes.
Electronics and automobiles?? I can prove why it makes SO MUCH sense to do both and at the same time... In the USA, by American workers...
Please let me explain, but I know you are already 'seeing' the plan.
What I am typing is not new to my frame of thinking and beliefs simply because I read your writings... This has been JL Mealer (me) from the day I was born, or at least very close to that day in March.
Please check me out and see who I am now and who I have always been, and allow me the honor of you pushing this through the last hurdle so I (or "we") can save this nation.
This is not a used car sale pitch to you, Mr Iacocca, but a sincere effort to get done what both of us see as necessary for the survival of these United States of America.
We have no options and since I am an American and have this major part to the solution in my genes and on paper, it is my duty to serve our country.
I am sincere in what I claim with my claims. These 'dreams and functioning mfg goals' are the answers for this nation's downfall... I will work this project until I am six feet under, if need be... but it is a must do deal in a country where we have nothing but empty promises and a workfroce of nearly broken people.
Okay.. enough 'romantic sounding' diatribe... However, I am serious.
Thank you,
John Lewis Mealer
johnlewismealer @ yahoo . com
Dear Mr. Iacocca,
I think it's time to come out of retirement! It seems to me that GM / Ford / Chrysler need a rescue along the lines of what you did.
America, it seems to me, needs another Fiesta. And Mustang. The unfair competition still exists though: China this time. The Chinese need to start respecting intellectual property.
Best regards,
Anthony Halpin ( Ireland )
I contacted Mr Iacocca last month and was told by Norma saken that he is working on the Diabetes cure (his wife died from the disease).
Let me become the next Iacocca and bouncing board for new USA jobs via USA manufacturing...
Mealer Companies... Mealer (McCain) 3R Economic Energy Plan
This plan was completed years ago to introduce a replacement tax for fossil fuel taxes that would have been lost when Mealer American Motors Corporation introduced a certain automobile...
Once our non-fossil fuel , non-EV (Electric Vehicle) which will also power a home when it is not being driven down the road, is sold, the govt fuel taxes disappear. This means, the coal companies taxes, the nuclear power companies taxes, the taxes from hydro-electric sources would eventually be done away with. The government would be in trouble.
The following brief explains these new tax sources...
1.USA manufacturing and new USA manufacturing businesses PLUS the millions of jobs that must exist to feed the need of the manufacturing sector... The same jobs that grew this country and have since been replaced by retail salespeople and Walmart employees selling Made in China products.
A. The Mealer 3R Economic Energy Plan entails paid training by utilizing the hundreds of thousands of stores fronts that sit vacant throughout America. Many of them are old Walmart stores and stores put out of business by the retail China import giants. The products made during training are resold in a host of retail stores throughout the nation and throughout the world...
B. These stores can be retrofitted and create immediate construction based jobs for those in the business and used for re-training America while the building/property owners receive huge tax breaks (through existing laws) for either donating or deferring lease payments until the 3R schools are producing a steady cash flow or until the following takes place...
2.As these smaller and solvent USA manufacturing companies come into existence, the newly schooled entrepreneurs who follow up with business law courses (community college works fine here) unless they feel confident or hire outside help, will go on and gather several other new small mfg companies and form them into one group to sell as a commodity and regulated as such. The market is huge! This is within the scope of commodities exchange and we would expect some out of work Wall Street types to hop on board since they aren't doing anything as it is... Could it be any easier to supply funds for any moments of struggling new USA MFG businesses than to group them together like this?
3.New jobs that are unrelated to these new USA MFG businesses will thrive as the new cash flow from these students and employees is spent to purchase normal everyday products and services. The ratio to cover one purchaser average 3 to 1, so for every new USA MFG position, the outside jobs that will be created are three per each industry. Don't believe me? Compare this to Detroit as the automaker jobs move away due to the Big Three mfg overseas and in Mexico. Compare this to the increase in jobs when the foreign automakers move into non union states. The cities and local economies thrive!
4.More people working in a community means more government resources and jobs will be needed to serve the public.
This Mealer Economic Energy Plan is really very simple and may be implemented today with immediate economic benefits, jobs and that thing call hope for the future.. But this is real and certain hope that ends up creating money rather than costing it. No government needed, except to stay out of the way. This is the only viable “renewable energy business plan” and by far the only viable “economic stimulus plan” that can possibly work.
Mealer Companies LLC
Mealer American Motors Corporation...
www.betterconstructed.com
JL Mealer
Dear Lee,
Please come back to Detroit and save us!
I'm not kidding here! You help save my father and my family back in the day when chrysler was in danger of going under.
You are the last of a dying breed of honest business men who cares about the compnay he works for and the people working in that company.
Please come out of retirement if even for a year or two and help us in Detroit.
Trade war is the REAL cause of America's economic woes!
Much has been said about deficit spending wrecking America's economy, but here's the neglected issue that's causing our economy to NEED to be propped up with deficit spending.
For several decades now, several countries have been waging an all-out trade war against the USA. Japan sells millions of cars to Americans each year, but withholds permission for American products to be sold in Japan. "Just fill out this application for permission to import your goods" they say. Years later, they're still "processing" the form.
Their conglomerates make huge profits selling goods in their protected home market, which they use to subsidize exports to America. For example, Mitsubishi appliances sold in Japan subsidize Mitsubishi cars to be sold here at or below cost. They target one American industry after another to be destroyed by subsidized competition.
And now China has taken the aggression to a whole new level. China does not allow its currency to be traded on open markets like every other major country in the world. China dictates the exchange rate of its currency with the dollar. They keep it artificially low, which keeps the prices of China's products artificially low (as measured in dollars). Coupled with the fact that all labor in China is essentially slave labor, there's no way anyone can compete with their prices.
The USA has laws against: unsafe working conditions, pollution, child labor, sub-minimum wages, theft of intellectual property, etc. Violating those laws is considered cheating. If our government keeps our companies from getting an unfair price advantage by ignoring those laws, why do they let China do it?
The unions are right about this issue. American workers do NOT have a level playing field on which to compete! Any country that cheats by ignoring our standards SHOULD be sanctioned with tariffs! Instead, our tax system is actually a NEGATIVE tariff! Our system taxes American production and lets imports off scot free! We need to abolish all income taxes and enact the Fair Tax. That will tax imported goods just as much as American goods. No more free pass for imports!
Free trade is generally a good thing, but we need to require that the other country practice free trade in return. This might be the only issue where Milton Friedman failed to see what's happening. He said that having a trade deficit is a good deal for us because we get actual goods in exchange for paper money. He failed to notice that the imported goods get consumed, but the selling country gets durable goods added to its industrial base.
Also, money that would have kept Americans employed instead goes to the other country. It returns only as loans, financing further imports. Americans stay unemployed, plus, America gets shackled by ever increasing debt to the other country!
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The multi trillion dollar trade deficit is the REAL fatal wound to our economy! If we would stop letting these other countries bleed us of all our dollars, there would be NO NEED for any deficit spending by our government to keep our economy afloat! Don't worry about China depending on us for their market. In one night, they can put in place a new financial system that would let their own people buy their products.
And don't fall for the argument that trade with China is converting them into a free country. It is not! Trade with China is what gives that repressive government the resources to stay in power! China plans to eventually use those resources to control US as much as they repress their own people! China still plans to hang the west! (All their military literature still says so!) And they're getting us to give them the rope they'll use to hang us!
China is conquering us the same way the ancient Chinese general Sun Tzu wrote in "The Art of War." The ultimate victory is to manipulate your opponent into becoming your servant without even having to actually go to war! That is exactly what China is doing to us! And both major parties are going right along with it!
Unlike other issues, this is one where solutions are not entirely in the hands of government. There are things we can do ourselves, other than just pressuring the government to stop acting against America's interests. Namely, we can create new products or add new features and functions to existing products, and obtain patents on them. Patents are a tool to help protect against theft of intellectual property. This weapon also helps defend against slave labor, artificially low exchange rates, etc. Obtaining a patent in just the USA and the European Union gives protection in almost half of the world market!
Some people are reluctant to take such actions in a slow economy. They need to realize that several of the world's biggest companies were started during similar hard times. In fact, creating new products and new industries is a major part of what it takes to revive a slow economy! Building new major facilities might be rash in lean times, but doing the advance work like creating new products and obtaining patents is ESSENTIAL in times like these! Those who do the advance work will be ready to go when the economy improves. Their competitors will not be ready. They'll become obsolete and perish.
Business is just like every other part of nature: grow or die! All of life is a competition. All living things compete with one another - even plants and fungi and bacteria! War, including trade war, is a fact of life. We need to compete with every means we have available. And we need to require our government to enforce rules that keep our competitors from having unfair advantage.
Jeff Putman
Dayton Ohio
je_freedom@usa.net
Jeff Putman, Engineer, Product designer, Kettering, Ohio More can be seen at: http://daytonos.com/?p=7801 "Top Ten Tips For Economic Development"
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