The biggest loser

Ford to workers: Please quit, all of you!


Andrew Leonard
September 15, 2006 1:28AM (UTC)

While visiting my grandmother in Southern California this weekend, I was introduced to her new neighbors, who were hanging out in the driveway admiring their brand-spanking-new F-250 Ford pickup truck -- a truly humongous vehicle that towered over us all, exuding endless raw power and vitality and blah blah blah. Maybe it was the sight of the Chevy Yukon SUV already parked in their garage, or maybe an afternoon of cruising freeways from chain store to chain store had fried my brain, but I was befuddled to the point of speechlessness. What kind of person, I wondered, buys a brand-new F-250 at this particular juncture in planetary history? OK, sure, gas prices are beginning to fall again, but still, filling up the tank on that monster has to take a nasty bite.

The answer, judging by the news from the Ford Motor Co. this week, is that it is an increasingly rare bird who is ready to spring for one of the biggest pickup trucks in the land. Sales of Ford trucks and SUVs fell by 15 percent in August -- F-250s were off 12 percent alone. That may partially explain why the Detroit News reported yesterday that Ford may be facing a 2006 loss of $9 billion and why the company announced today that it would offer buyouts to every single one of its 75,000 hourly UAW employees.

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OK, maybe I just buried the lead there, as we say in the journalism business. And maybe that's because I'm still in shock at the news that one of the United States' greatest corporations is planning to offer buyouts to its entire blue-collar staff. What happens if they all accept? Does Ford just go poof? Is this the much touted "Way Forward"?

In a major speech yesterday on the "international economy," new Treasury Secretary Henry Paulson, manfully trying to explain why globalization was coming under fire in both China and the United States, trotted out a well-worn cliché: "This widespread and growing resistance is not surprising, because the benefits of competition, while significant, are not spread evenly, and competition can create losers as well as winners."

The reasons for Ford's (and GM's) woes are manifold: Putting aside foreign competition for the moment, one can also blame a lack of federally funded healthcare, brain-dead product strategy, and the failure of government to require higher fuel-economy standards. But all in all, I think it's fair to say that Ford, and especially Ford's workers, are big losers in the global economy. Ford's workers might be well advised to take the money and run straight to the nearest Chinese-language instruction class. (They can take heart in an article in today's Asia Times that reports that a delegation from Shanghai is visiting the United States in the hopes of filling 2,000 job vacancies in the Chinese metropolis.)

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The last thing those workers should do is wait until they get laid off. Because as a new paper by UCSC's Lori Kletzer and Howard Rosen, the executive director of the Trade Adjustment Assistance Coalition, persuasively argues, the unemployment insurance system in this country is broken. Designed 70 years ago to ease the pain of temporary layoffs, it doesn't meet the needs of today's workers, who are likely to be laid off for longer periods than in the past, who are often self-employed or work part time, and who face the unprecedented double squeeze of technological progress and foreign competition. Kletzer and Rosen propose a series of changes that would broaden and deepen the unemployment insurance system. They also advocate combining it with a juiced-up wage insurance system, so that laid-off workers who were forced to take jobs that paid less than their previous employment would get cash supplements.

Kletzer and Robert Litan came up with the original proposal for a wage insurance scheme in 2002, but so far, the scheme has only been implemented in the most minuscule fashion. Which makes, once again, a mockery of that old winners-and-losers rhetoric pumped out by Paulson and the rest of the economists who are scared to the willies of growing protectionist tendencies. Paulson's speech was widely read as stepping up the pressure on China to revalue the yuan. But I'd like to see his own administration take him at his word: "I believe it is the responsibility of all nations to search for ways to moderate income disparities and help those who lose their jobs to international competition. We in America must think creatively about how to assist those who fall behind."

Think creatively? Come on, it doesn't take the brain power of a former Goldman Sachs CEO to figure out how to simultaneously "reduce income disparities and help those who lose their jobs to international competition."

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Tax the rich. Fix the unemployment insurance system, beef up wage insurance, and pay for healthcare. Maybe then we can successfully avert our eyes from the sorry spectacle of Ford begging its entire workforce to quit.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Related Topics ------------------------------------------

Globalization How The World Works Unemployment

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