We know that Tim Bishop hates outsourcing. He has gone so far as to introduce new legislation to prevent outsourcing of call center jobs. Tim Bishop may be a very big oursourcer himself.

Tim Bishop supported the auto bailout of GM and Chrysler with tax dollars. Chrysler is now owned by Fiat, an Italian automaker. That means that all Chrysler employees who are not employed in Italy, are by Tim Bishop’s definition, outsourced. If he is consistent with his beliefs he should demand that all Chrysler jobs be relocated to Italy, so that this invidious outsourcing is stopped.

GM, the other half of the auto bailout Bishop voted for, although still an American company took taxpayer dollars and then increased the amount of automobile production overseas by 35%. More outsourcing.

So, Tim Bishop is outraged by the amount of outsourcing going on by private companies, but he doesn’t seem to have a problem taking your money through taxes and outsourcing jobs as long as a big union, such as the United Auto Workers, is in favor of it. If a union like the Communications Workers of America complains about call center jobs being outsourced it’s an outrage, and Tim Bishop takes umbrage with that and introduces legislation to stop it. If another union, the United Auto Workers, begs the Obama administration to bail them out even if it means outsourcing more jobs, Tim Bishop blithely goes along.

So, which is it Tim? Is outsourcing good or is outsourcing bad? Or do you just not have a clue? Don’t answer that until you hear from Nancy Pelosi, President Obama, the CWA, the UAW, United Federation of Teachers or whomever else does your economic thinking for you.

That’s my opinion; I’d like to know yours. Please comment below.

Our once proud automobile industry

The government institutes regulations such as CAFE that force the automobile companies to build many cars they can’t sell at a profit for each car they can.  The unions negotiate contracts that pay people who have been let go 90% of their salary and give retirees extremely generous packages.  The automobile companies stagger under this load to the brink of bankruptcy and what happens?  The CEO of GM gets booted out and the government and the unions end up owning the car companies.  In the case of Chrysler the UAW will end up owning 55% of the company if the government’s plan is approved.

Had the automobile companies gone into bankruptcy before the bailout, as this author advocated, the union contracts could have been voided and a new workable deal struck.  But the government said bankruptcy was bad. The government said we had to give the car companies billions of our tax dollars.  The government said, if you automobiles companies don’t accept our deal, you will be forced into bankruptcy.  Huh?

So tell us again, Mr. Obama, how this is not socialism.

The government decides that we have no choice but to bail out the automobile companies.  Before taking office Obama supported the bailout.  In my humble opinion, I believed the auto companies should have turned to the bankruptcy courts.  Now, President Obama is clearing the way for states such as California to significantly increase mileage standards for cars.

So let’s examine this.  The big three are forced to sell a lot of small cars at no profit or a loss for each profitable vehicle like a Cadillac they sell so that their fleet average fuel economy will meet CAFE standards.  The result of this government meddling is that the big three are unprofitable, so they have little or no money to invest in the next generation of cars.  Because they are on the brink of insolvency, the government steps in and bails them out with billions of taxpayer dollars.  Even with that, it may not be enough and the auto companies may require more.  So what does our government do now?  It opens the door for states to tighten the noose around the necks of the auto companies by increasing the mileage standards.

So now the auto firms will have to sell even more small cars at a minimum profit or loss for each profitable Cadillac they sell, in a down economy no less, practically guaranteeing that the auto companies will come back to the government asking for even more bailout money.

The inexperience display goes on in Washington.  How long can we stand it?

He looked nervous.  He curled up the corners of his two hole cards, aces.  He eased them back down on the table and scanned the other players.  Nancy Pelosi had a stack of chips totaling $25 billion and he wanted all of them.  No, he needed all of them.  Desperately.  The other three, all Japanese, sat expressionless behind their dark glasses.  At every hand all they said was “Call”.   No raise.  No drama.  Very cool.  Very dangerous.

He looks again at the four cards on the table.  Nothing to help him there.  He needs another ace. He needs the ace he calls the Volt. Pelosi turns to him. “So, what’s your plan?”  He swallows hard, trying hard not to show it and says, “All in,” and pushes his remaining chips into the center of the table.  The dealer burns another card and then peels off the “river.” And we’ll be right back for the final outcome of tonight’s game.

GM on the Precipice

That must be how Rick Wagoner feels.  It seems he’s betting everything on the Chevy Volt. If he draws that ace, he’s a hero.  If not, he’s history.  So what are his chances?

If that’s all he’s got, they’re pretty long odds.  The Volt is not due to hit the showroom floor until 2010, and at a whopping $40,000 per copy.  Not a bad price for a Cadillac, but for an untested electric car with a 40 mile range?  That’s a tough sell.  Even at that, the $40,000 might not be profitable, just break even.  But, there will be a tax credit of $7,500 to help take the sting out of it.

Without Bankruptcy

Without a major revamping of their cost structure that can probably only be achieved through the bankruptcy courts, GM is still carrying $2,000 per vehicle in labor costs that its competition doesn’t have.  And what about those three players to his right in the dark glasses, do you think they are standing pat?  Although very low key, it is reported that Toyota, Nissan and Mitsubishi are all planning to introduce electric cars in the same time frame.  If they do that and they also have the $2,000 per vehicle edge, it will be very bad for GM and any bailout will go down the drain.

The other factor is the way the Japanese do strategic planning.  They typically do not look to just the next quarter.  They are known for developing 50 and 100 year plans.  That is not a typo.  So if they introduce a vehicle they will do it for the long haul.  Believe it or not the Toyota Prius has been on the market for seven years already.  The Japanese are not afraid to introduce a pretty good model and then continuously improve it and if they believe the direction is right, they are willing to wait for the results.  The Big Three, on the other hand tend to have a shorter planning horizon.  Witness Ford’s announcement that it intended to build 250,000 hybrids and then did a market survey when gasoline was about $2.30 per gallon, and decided that they should not go forward.  When gas prices took off they were caught flatfooted while Toyota was selling Priuses at a premium and they couldn’t make them fast enough.

New Administration, New Congress, New Energy Policy

Then there is the energy issue.  Putting more and more electric cars on the road is a good idea and a way toward energy independence.  However, the new administration and the incoming Democratic Congress want to kill the coal industry.  Coal currently generates 49% of our country’s electricity and when it comes to coal reserves, the U.S. is to coal what Saudi Arabia is to oil.  But the new incoming chairman of the House Energy committee, Henry Waxman of Beverly Hills, California, is more determined than ever to implement a green agenda and kill coal.

So what do you replace the coal with?  Oil? Gas? Nuclear?  On the campaign trail, I heard Barack Obama and Joe Biden mumble some things about nuclear being okay, but it was hardly a ringing endorsement.  Do they think for a minute that wind or solar are anywhere near replacing coal?  So, they actually plan to reduce our electric generating capacity by 49% and then not only replace it but grow it to be able to handle all these electric cars.  Where’s that plan?

If you don’t have enough electricity, you can’t charge up your electric cars.  If good old supply and demand does its usual thing, the price of electricity should skyrocket and I can tell you first hand that in New York, it’s not cheap right now.  If electricity skyrockets, whatever manufacturing is left in New York and other rust belt areas will be pulling up stakes left and right and heading south.  If that population follows the jobs, does that mean more votes for the red states and a shift in Congressional seats as well?

The Democrats better re-think that plan if they want to stay in power.