GM loses $4100 on each vehicle while has an $1800 profit on each vehicle it sells.

Jammie Wearing Fool provides very revealing facts about the auto industry:

It was a dead heat. General Motors sold 9.37 million vehicles worldwide in 2007
and lost $38.7 billion. Toyota sold 9.37 million vehicles in 2007 and made $17.1
billion.That was the second-best sales total in GM's 100-year history and the
biggest loss ever for any automaker in the world.For Toyota, that was roughly
$1,800 in profit for every vehicle sold. For GM, it was an average loss of
$4,100 for every vehicle sold.

If these numbers are correct, a serious difference in cost structure would be indicated. That cost structure may not be limited solely to labour cost differential, but that would certainly appear to be part of the problem.

UAW kills Auto bailout.

At this point the auto bailout appears to be on life support. According to AP, "A $14 billion emergency bailout for U.S. automakers has collapsed in the Senate after the United Auto Workers refused to accede to Republican demands for swift wage cuts." Senator Harry Reid failed to win cloture on a 52-35 vote.

The AP report provides basic information as to wage rates and total labour costs for General Motors versus Toyota factories in the USA. Average wages paid are relatively similar: about $30 per hour for both. However, medical and retirement costs for GM far exceed that of Toyota, pushing total average hourly labour costs to $69 for GM versus only $48 for Toyota. According to CNN Money, the Center for Automotive Research reports that GM's labour cost actually is $78.21 per hour. This would suggest a $30 per hour labour cost disparity for the Big 3 versus Toyota and other non-UAW auto manufacturers.

Questions for the Big 3, Democrats and the UAW: How can the Big 3 compete unless the UAW agrees to a reduction of their total labour costs are reduced to the level near that of American workers in Toyota and other non-unionized auto plants? Would any bailout funds do anything more than extend the agony of inevitable bankruptcy of companies that are fundamentally uncompetitive?

GM's North American operations lost $1.06 billion during 4th quarter 2007, long before the economic downturn. The evidence indicates a desperate need to change the entire operations of the Big 3. Until the UAW and its allies in the Democratic Party accept that reality, the Big 3 cannot be saved. Any funds provided the Big 3 would not be a bailout but simply a subsidy to support the UAW's out of line benefit package.

Why would Governor Blagojevich and the president-elect not discuss Senate succession?

Can anyone really believe that Governor Blagojevich and president-elect Obama did not discuss at some point whom the Governor should appoint to Obama's vacant Senate seat? The two had long been allies at the highest levels of Illinois Democratic politics. It simply defies logic to think that Blagojevich would not ask Obama's opinion as to a possible successor or that Obama would not want to place an ally in the Senate to help with his programs.

Jake Tapper writes that in an appearance on Fox News Chicago on November 23, 2008, David Axelrod,

While insisting that the President-elect had not expressed a favorite to
replace him, and his inclination was to avoid being a "kingmaker," Axelrod
said, "I know he's talked to the governor and there are a whole range of names
many of which have surfaced, and I think he has a fondness for a lot of
them."

Axelrod now says that this is no longer operative. He "was mistake" about any such conversation between the governor and president-elect.

In looking at Axelrod's original statement in hindsight, his intent seems very clear. He admitted the obvious, that the two talked about successors, but made it clear that Obama was not paying to play. Obama was pushing no candidate as successor; he did not want to be a "kingmaker." Thus, Blagojevich's ultimate appointee would not be the result of any action by Obama.

This clearly suggests that the Obama team was very aware and concerned that Blagojevich was trying to "sell" the Senate position. Axelrod was attempting to protect Obama from any allegation that he participated in that sale in any way.

Apparently, the boss decided that even having had a very safe conversation with Blagojevich with no attempt to act as "kingmaker" was too close to the sale, so he insisted that he had no discussion at all with the governor.

Bailout for Detroit?

It seems to me that one overwhelming fact must be understood in answering the question. The "Big Three" are not the only manufacturers of cars and trucks in this country, but they are the only ones asking for government money. Manufacturers of other vehicles are doing quite well, thank you very much. They are not asking for a bailout even in the face of the same economic downturn being used by Detroit to justify the need for the bailout.

In providing funds to Detroit, the government would be acting in the role of lender of last resort. The first question that any lender of last resort must ask in determining whether to make such loan is whether the debtor suffers from a temporary cash flow problem that makes it illiquid or whether it is essentially insolvent. In looking at Detroit's request, one must determine whether the economic downturn has created a temporary cash flow problem for an otherwise sound business model or whether the business model itself renders Detroit as ultimately insolvent.

Evidence indicates that total labor costs the Big Three are approximately $73 per hour compared to other auto manufacturers in the US with costs of only about $48 per hour. This suggests that Detroit cannot compete with other manufacturers in the long term. Unless fundamental changes are made to the business model, any funds provided to Detroit will simply delay the inevitable bankruptcy or restructuring needed to allow it to compete.

Let us be clear. These cost disparities do not arise from the differences in wages between American and foreign labor. American workers happily accept a total labor payment of $48 per hour even as Detroit incurs a labor cost of $73 per hour. Foreign owned auto manufacturers operate profitably paying that labor cost. One can only conclude that Detroit must reduce its labor costs to the $48 per hour level in order to continue in business. Until it does so, any funds provided by the government will effectively act as a subsidy to keep an insolvent company in operation.

Fitzgerald should be appointed Special Counsel.

The recent arrest of Governor Blagojevich proves the need to appoint Patrick Fitzgerald as Special Counsel to reprise his role in the Plame investigation. Governor Blagojevich has been part of the machine politics in Illinois that brought president-elect Obama to his state senate and US Senate positions. Regardless of present attempts to distance himself from Blagojevich, the president-elect long supported Blagojevich and derived support from those who funded and supported Blagojevich in his campaigns.

US Attorney Patrick Fitzgerald has a well earned reputation as an independent prosecutor who follows leads wherever they lead, regardless of the political affiliation of those being investigated. The president-elect faces a looming danger to his credibility and that of his administration. Will he succumb to the overwhelming temptation to fire Fitzgerald along with all Republican US Attorneys as generally done by a new admministration?

Obama could easily think that he could justify such firing as simply politics as usual. That would be a terrible mistake. Of course, his allies in media would likely give him a pass as they have throughout the campaign. The president-elect may believe that only the right would take exception to such politically motivated firing and that he could withstand such criticism with the aid of the mainstream media.

Even if the president-elect promised to allow Fitzgerald to continue in his present position, a President Obama could fire Fitzgerald at any time during his administration. He would attempt to argue that he had given a Republican prosecutor adequate time to investigate and was simply replacing a Republican US Attorney with a Democrat as all Presidents eventually do.

Furthermore, the past close association of Obama with Blagojevich creates the appearance of a serious conflict of interest that would raise serious doubts as to the legitimacy of any decision of Fitzgerald or any US Attorney not to pursue possible prosecution of those close to the Obama administration.

For these reasons the Department of Justice under President Bush with the concurrence of president-elect Obama should name Fitzgerald to the US Department of Justice Office of Special Counsel to pursue the investigation and prosecution of Blagojevich, Rezco and the Chicago crowd wherever the evidence leads. This is exactly the position he held in pursuing the Plame investigation.

While President Obama could subsequently fire Fitzgerald as Special Counsel, the reason for such firing would be readily apparent to all.

"For Sale: Office of US Senator. Inquire within."

All I can say is, "Wow." It's still hard to believe that the governor a State was arrested by the FBI and is alleged to have been trying to sell a Senate seat. "Children, can you say 'corruption'? Yes, we can." The immediate response from everyone seems to be that it's Chicago and Illinois. What do you expect? But Blagoyevich won election as a reformer to end corruption in Illinois.

Perhaps the last two governors of Illinois may eventually share a cell in prison.

Taking a more serious look at the allegation, one of them presents a concern that I have long had. The Criminal Complaint alleges that "ROD BLAGOJEVICH has also been intercepted conspiring to sell the Senate seat in exchange for his wife’s placement on paid corporate boards." (paragraph 87 of Affidavit) Absent wire tap or similar evidence, the mere election of the spouse of a governor or former governor to the board of directors of a corporation would be unlikely to support prosecution for corruption.

Clearly, spouses of politicians have a right to pursue their own careers. However, reality suggests that such pursuits offer fertile opportunities for corruption. This does not suggest that the spouse of any elected official must be required to forgo his/her career and stay quietly at home. In fact, perhaps this indictment will serve as adequate warning to all of the need to avoid even the appearance of impropriety in this area.

75th anniversary of the holodomor in Ukraine

The Weekly Standard reminds us that this year constitutes the 75th anniversary of the Soviet Union's intentional starvation of 6-10 million people in 1932-33 during the collectivization of farms in Ukraine and elsewhere in the Soviet Union. During that period, Walter Duranty and the New York Times reported that no famine was occurring in the Soviet Union and accused those who wrote about the famine of being reactionaries and anti-Bolshevik propagandists.

Louis Fischer toured Ukraine in October 1935 and claimed in The Nation that food rotted in the fields because of the peasants' passive resistance. He admitted that times were very harsh, but blamed the peasants themselves for their difficulties. He denied that famine occurred in 1932-33.

Scholars have written little about the holodomor (Ukrainian for "to inflict death by hunger"), so most people in the west know little about it. Today few serious scholars question the reality of the famine; instead, the focus of the debate seems to be whether it was a genocide of Ukrainians or a stratocide based on class status. Whether Stalin sought to murder millions of people because of the ethnic identity as Ukrainians or their class status as peasants who wanted to operate their own land, he intentionally starved 6-10 million people.

It seems to me that the motivation for Stalin's murder of millions neither excuses him nor suggests the presence of a greater evil. He deserves the same opprobrium regardless of the intent motivating him.