Video: Andrew on Fox Business - Union Busting

November 11, 2008

I was asked to discuss the impact of unions on the automotive industry. The lead-in was a touch harsh as host Stuart Varney came on strong, wrongly accusing me of believing that unions were the main cause of Detroit’s problems. I helped him better understand that while unions are a part of the problem, there is more to the story…

Related Posts:

March Media Roundup1 - Andrew Horowitz It was a busy week for Disciplined Investing it seems. Here is...
Video: 4 Infrastructure Stocks to consider Recently, I sat down with the good folks at The Money Show...
VideoFest: Andrew at The Money Show A few videos from the panels and private discussions at The Money...
Audio: Andrew on NPR on Auto Bailout Today I spoke about the problems and benefits of a Auto...
VIDEO: Andrew on Oil Manipulation This was just released from The Money Show. Keep in mind, this...

Written by Andrew Horowitz · Filed Under Markets, Media

Comments

1109Comments2008-11-12+03%3A30%3A06Andrew+Horowitz to “Video: Andrew on Fox Business - Union Busting”

Jonathan Lawson on November 12th, 2008 1:09 am

Chuckie: Yo Guido, check out this Horowitz guy on the TV… He’s talkin’ ’bout bustin’ unions.

Guido: Bustin’ unions? Doesn’t he know I got mouths to feed. Let’s take a little trip down to Myaaaami and pay this guy a visit.

Chuckie: Hey Guido, your e*Trade acct is down 60% this year. I googled Horowitz, he is actually up 10% in this MSN Money contest. Maybe you should bring your statements with ya.
*****************************************
Way to go Andrew, it needs to be said!
Shawn on November 12th, 2008 8:55 am

Jonathan — LOL. That made my day.
Dave on November 12th, 2008 1:55 pm

Nice job, but would have liked to see you tell him he’s an idiot and doesn’t have a clue where you stand.
JT on November 12th, 2008 1:57 pm

Varney did have an agenda it would seem. Horowitz was put on the screen right after Varney said ‘blame the unions for the downfall of the US automatkers, He is Andrew Horowitz…”

The agenda was to inject the words Obama and unionize into a discussion about the decrepit domestic auto industry. It was hardly helpful to the topic especially since Horowitz had to fight to put forth his suggestion about ‘just in time’ manufacturing.

I do not think Horowitz’ suggestion was actually absorbed by the viewers because Varney failed to consider the idea.

If the automakers get a bailout then this discussion is tabled and we can meet again when they need another bailout. Horowitz why do you go on this channel?
Joel on November 12th, 2008 2:33 pm

That was good. reminds me of why I don’t watch FOX Business. That guy was horrible. Good job Andrew.
Andrew Horowitz on November 12th, 2008 11:20 pm

Thanks gang… It was a touch sensational - definitively pushed the idea to make it much to argumentative . It is what sells unfortunately. I was interested in why he was seemingly so pro-union…

Andrew
Patrick Dawson on November 13th, 2008 11:35 am

I have to say that you are spot on with the unions. I used to work for a small automotive manufacturer and before that I worked for an interior sub contractor for Boeing. I know unions from different industries, and I think they all stifle innovation. Let me speak directly to the problems with the automotive industry unions.

The company I worked for was contracted to assemble the Ford GT from 2004 to 2007. We were a non-union shop, so we could only assemble the cars up to a rolling chassis. The cars did not have transmissions, engines, or full interiors. This finish assembly was completed at the Wixom plant, which was union. When the union renegotiated its labor contract with Ford in 2003, it guaranteed 50 employees to work on the yet to be released Ford GT at the Wixom assembly plant. These people were going to be paid if the car never went into production. To utilize these people, Ford produced the car but contracted with us on a “cost plus” contract to assemble the majority of the car.

In my dealings with suppliers in the Michigan area, I would get colloquial knowledge of how the other Detroit manufacturers worked. At the top were Toyota and Honda. These companies relied on their rank and file to continuously improve their processes. Line workers are encouraged to escalate ideas that would lead to more efficient manufacturing methods. When there is a union in place, there is an us-vs.-them (labor-vs.-company) mentality that does not allow for this. The company is seen as the overlords that impose difficult and unrealistic working standards on the “common worker.” This shows up when Engineering employees (which are non-union) come down to the production line to work on processes or to find solutions to production issues. Any change in manufacturing needs to run through the union boss, who then evaluates the change and the effect on the workforce. If the change ever happens and less people are needed, then they are simply reassigned, sometimes to do nothing at all. Most plants have not changed since they first opened their doors. The same processes are done in the same spot they have been done for decades. You can thank the unions for that.

Unions had their place. There were unsafe and horrible working conditions in the past. Keeping them around is a legacy problem that will not allow GM, Ford, or Chysler to move past the 20th century. The unions cannot be the whole reason for the downfall, but their existence has placed a serious liability on Ford, GM, and Chrysler. Honda and Toyota are not immune to the current slow down, but their manufacturing process and flexibility has allowed them to weather it much better.

Patrick
Doug on November 17th, 2008 4:53 pm

Andrew, don’t let yourself be co-opted by this guy again. I’m not sure I’ve ever heard an interviewer with a stronger agenda which was pushed so hard. He didn’t seemingly even blink as you refused to be bated time after time!. Write FOX off as a network with unbalanced argumentative interviewers.

The limited opportunity you got to present your views on Jurasic unionism should’ve been enough for any reasoned investor to factor in the impact of unions on the bottom line.

Our economic problems weren’t created by GM, Ford or Chrysler saying “yes” too many times to their union. But they sure are caught up in it …financing for retail purchases, for parts manufacturers, to finance inventory, etc. Your point about their business model being busted and manufacturing only on demand seemed lost on this interviewer. What a shame that FOX only wants to sell advertising!

Dave’s earlier comment is right on trarget!
Kim on November 19th, 2008 12:50 pm

Great job on the interview. Varney’s a gasbag. I thought you handled it very well and made strong points.
doug a. on December 4th, 2008 2:01 am

Unions are not the only problem. American greed and selfishness is. I have four examples to share. I do contracting work and have a store.

One recent one is when I was in a union shop for the first time with the Plant Engineering Mgr, and the dept. mgr. They were going to show me what needed to be done. My cost 75./hr and their salaries about 60,000-80,000yr each. This guy comes whipping up on his lift truck at a company cost of about $60/hr screaming and hollering threatning to get the union to serve a grievance against the mgr. He went on for 15 minutes. You do the math.. His problem- The dept mgr was walking through the plant and a guy running piecework on the line had to stop the line because a pallet was in the way. The guy just wanted to slide it over 6 feet so he could start up again. The mgr. gave the extra umph to get it moved so production could start back up. The driver was on a break at the time. They stole his job. You would think he would be happy they kept the line going and he could move that pallet and the others where they belonged now that he was back! Now more time and money was wasted in employee time in greivance committee meetings! The company expense and customer cost went up. Foriegn competition gained.

Another shop that unions control wanted to upgrade the machines it used to manufacture auto parts. This machine would require one operator to work it to do a job that required 5 guys before in the assembly. The union fought it for years while Honda put it to use immeadiately. Who won? Honda or the Rust Belt?

A company we whose products we sell, Baldwin Corporation makes absolutely beautiful hardware and has for years. Thier parent firm came out with Life Time finishes first. But before that you had to wait months for orders from them to come in. 12 weeks was the norm. The most expensive hardware they made also came in lever styles. I complained for years at product shows how awful the levers looked through the glass on french doors because they were uneven. The levers were held on by set screws on a 1/4″ shaft. After a few weeks use leverage would loosen and make the most used lever sag. According to the sales staff I was the only installer complaining. I thought I was giving them feed back on a poor design so improvements could be made. Baldwin OWNED the decorative hardware market then. Arrogance destroyed that market they Owned. I made suggestions on other products also and got that same answer of arrogance. I was the only one “complaining”. Then came the competition from Europe and Asia and Sweden. Baldwin almost went belly up. Black and Decker now owns them and many improvements have been made. Delivery is almost immeadiate. Swelled heads have rolled and innovation has happened. It is really too bad that they missed 15 years of boom because innovation was dead along with motivation to improve from the top to the bottom of the origional company. China, Mexico and Europe won the good times. This had nothing to do with who is cheapest. People who buy Baldwin and it’s now stronger competitors want THE BEST.

Next is the American shopper in general. Greed and Self interest driven. In our store we sell USA made and the competition. We have to. Big box stores have the consumer trained to look only at the dollars spent now and nothing else. I was discussing this with a regular in the store and he did not understand why I had Chinese product. A customer came in and I told him to watch. This guy was a proud american. He had his WWII Army weiner hat on with all its ribbons he earned while he served to preserve my right to write this. He wanted a padlock for his shed. I took him over to our board and started. This is an American Junkunc Padlock made in Crete, Illinois and it sells for 19.80. It is the strongest and best quality made. Here is a laminated padlock made by Master Padlock in Milwaukee, Wisconsin the same size. 9.95. Here is an Em D Kay padlock the same size made in Communist Red China. 4.95. Which one did this proud american buy? You bet! 4.95 was the sale. This happens daily in the store.

It is not just unions. It is not just managment. It is not just the President. It is not the competition. It IS the Greed, Self Interest and Arrogance of every American! Nikita Krushgieve (help I can’t spell Russian) said it Best to the UN way back. Russia doesn’t need to worry about American missles. America will die from within. Maybe we will.

In any competition or war, you divide the enemy, keep your team working together and you will win. In the USA today we have 350 million greedy, selfish, arrogant, self righteous individuals doing the buying, the manufacturing, the governing who have forgotten or never knew of ” The Big Picture”.

The big picture is not about YOU. It is about US. Not just the USA, but the World. It’s about responsibility for your fellow man while you are alive. To make the world a better place WE need to Constantly Improve Ourselves and share how to do it. WE need to think outside of ME to benefit our kids and neighbors. WE have to IMPROVE America constantly in order to be able to help others.

Remember the speal on the plane when they tell you if the cabin looses pressure that a mask will drop out of the compartment above you. Take the mask and put yours on first! Then help others to put on thiers.

The goal is not for you to think of yourself first! It is to be responsible so you will be able to help others! Its an Attitude! Too many Americans think ME first and to hell with every one else. What did they ever do for ME! I don’t need other people! If I aquire these small banks and assets, fire the management, charge the customer excessive fees, give risky loans to strangers and friends and sell them in unclear bundles I can make billions! Easy money! Why have local loan managers that know the people and how honorable they are at repaying loans give loans to deserving individuals.

Why allow change that will make the company more profitable so it can compete better? Why not take that Excessive pay and benefits package while customers and suppliers are hurting to afford our products?

Why let the Republicans work on thier agenda? We will just vote no every time and make them look bad and hurt the economy because we can blame them because thier president is in the office. They almost had their wish to get it going when Newt was there for two years. But we fought that off! Thank Terror groups for the help! Now I can have my committee group and power and money gifts.

I believe these last 30 years of greed is going to destroy the economy of the world. The GREAT Depression is going to be surpassed by the pains we will feel in this one. We are going to be driven back together by neccessity to survive.

Got something to say?

The Disciplined Investor

Video: Andrew on Fox Business - Union Busting

Comments

Monthly Archive

Recent Comments

GoToMeeting

TDI on MSN Video

Categories

TDI Podcast RSS

TDI Favorites

ADMIN

The Disciplined Investor

Video: Andrew on Fox Business - Union Busting

Comments

TDI Email Updates

Monthly Archive

Recent Comments

GoToMeeting

TDI on MSN Video

Categories

TDI Podcast RSS

TDI Favorites

ADMIN