Twilight For American Manufacturing Labor

The Bush Administration's Labor Secretary, Elaine L. Chao, whose main qualification was that she is the wife of U.S. Senator Mitch McConnell, has imagined some creative ways to make the shrinking American manufacturing labor pool look less like the threatened species it is. Some months ago, the idea was floated to reclassify workers at McDonalds who assemble a hamburger or stuff napkins in a napkin tray as manufacturing labor to soften the statistical drop of American manufacturing labor to a variety of ills in the regressive Bush years. Instead of policies to actually strengthen American labor, it is a far more easy and politically expedient for White House faithful, Chao to play games with labor statistics.

Besides this years loss of nearly every textile manufacturing job to China or other lower wage nations. And a steady exodus of jobs to China or Mexico under NAFTA, or the new Bush era CAFTA with Central America, has steadily eroded the American manufacturing base and made the American manufacturing laborer more and more scarce. Whether it be WalMart, or even the average store of nearly any type, more and more most variety items from toys to tools, hardware to silverware, are no longer manufactured in America, but now made in labor cheap China or Mexico.

On one hand, the consumer gets a cheap priced product. But on another level, with the loss of so many high paying manufacturing jobs, the ability to buy goods steadily drops as wages become lower and lower as Americans are forced into more and more service jobs with service job wages.

Besides textiles, other American manufacturing has taken a steady hit over the years. In the late 60's to early 70's the parent company of Panasonic targeted the American television set manufacturing industry for destruction with "predatory capitalism". Japanese made televisions, while excellent quality often sold for far less in America than in Tokyo simply to destroy the American television industry. And even the American made Quasar brand, became not only a victim of this predatory capitalism, but was actually acquired by Panasonic's parent company. Today China hinges their currency on our dollar rather than letting it float against all other world currencies. This undervalues their currency by an additional 40% against our dollar. And often the 40cents an hour hour wages in China are not paid, but a figure closer to 24cents in many cases. And workers are taught how to lie to Chinese government officials who inspect factories for wage, safety and dangerous illegal work around health threatening chemicals violations by corporate heads to boost profits, undercut American jobs, and unfortunately injure and kill many Chinese workers with "brown lung" and other manufacturing caused health problems.

The next American industry that may be hitting a twilight is the American automobile industry. 42 members of the Bush Administration are either executives or major stock holders in the oil industry. The oil industry realizes the amount of support they have here, and uses this as a green light for huge oil price increases. And the manufacturing boom in China as well as not a single new American oil refinery being opened in the last 25 years in America, creates an environment where less and less refined oil available to a larger and larger population means higher and higher prices. And although Saudi Arabia has offered more oilexports to America, without increased refineries, this has no effect on bringing down prices for the consumer. And in fact in Saudi Arabia, increasingly sea water must be pumped into oil wells to bring oil to the surface as a point will someday be reached when these great oil wells begin to go dry for good. A full 30% of American energy is oil dependent, but some countries like Britain it is 50% , or in developing Nigeria, it is a full 90% of all energy demands.

This increased price for world oil has created a new crisis for American manufacturing labor. This week S&P has lowered the status of GM and Ford bonds to junk status. This will make it harder for the last two American automobile manufacturers to acquire cash to retool their automobile lines to compete with the demands for more fuel efficient automobiles. Already Toyota is years ahead of GM and Ford with more and more hybrid gas-electric automobiles to market. And Honda may be be close with some models as well. And South Korea has a number of very well made and thrifty cars to market. Instead GM and Ford are stuck with so many large SUVs and larger automobiles that are selling slowly, so price cuts, interest cuts, and other incentives are substituted for development of new cars to market or better technology such as the advanced hybrid automobiles.

The new junk bond status will put a cash squeeze on GM and Ford , of which it takes up to three years to develop new models. Both the defunct American Motors Corporation and Chrysler should serve as warnings to GM and Ford. The 1970 AMC Hornet was designed as far back as the 1967 Cavalier showcar. It took a full three years to bring this model to the market. In April of 1970, a foot and a half was cut out of the body to create the subcompact Gremlin model which sold for a mere $1,879. But due to financial problems, slowly more and more of the entire AMC car line was based off a 1970 Hornet based automobile including the Concord, Spirit, and Eagle four wheel drive line. In fact for 18 model years, a 1970 Hornet based car was produced as sales continued to fall and AMC workers became more scarce. And Chrysler hit a bankruptcy wall in the 70's with no subcompact to market at a time when the nation had long gas lines in the Ford and Carter gas shortage years and gas soared from 30cents to $1.20 a gallon. Chrysler needed a government bailout to produce smaller more economical automobiles or many workers would lose jobs.

Now GM and Ford may slowly be with their backs to the market and financial wall. Workers at these companies will lose their jobs at some future point unless GM and Ford can develop new models to compete effectively with Toyota and Honda hybrids or high mileage models as higher and higher fuel prices make GM and Ford offerings less desirable.

White House faithful Labor Secretary Elaine Chao may be able to conceal some automobile job losses with a "Three Card Montee" game of labor statistics reclassifications, etc. But the real problem is that it's the last few minutes of a game seven for large American manufacturing such as the automobile industry. Unless these corporate heads well plan a survival strategy for a major market comeback, the truth is too many more manufacturing workers jobs will disappear as Japanese and South Korean manufacturers are better able to supply the fuel efficient and more modern affordable automobiles that Detroit lags behind with, but the American consumer desires. You can't substitute cash incentives or low interest rates forever for the products consumers really desire. But just as Zenith, RCA, AMC , Chrysler, Studebaker and so many other brands disappeared as either American owned or altogether, it is GM and Ford's turn to save many American manufacturing jobs or else fail in the marketplace.

100's of animal species become extinct each year and a museum piece. The American manufacturing worker may soon join them as a relic of the past. And a lower American standard of living from their loss will surely result.