Irony at its worst

After watching this weeks “off the record” I was irritated by Bill Ballinger and Dawson Bell both preaching objectivity of media; what a joke! The topic was regarding a news story that broke about Sam Riddle saying that he was paid “hush money” from the Michigan Democratic Party (MDP) to not say anything negative about Gov. Granholm during the 2006 election. Here is a small recap:

2006 MDP hires Riddles media consulting firm to look at both message and speakers during the campaign.

Monica Conyers has a series of issues ranging from erratic behavior to federal investigations. (Sam Riddle was the former chief of staff to Monica Conyers)

As the investigation continues and names are being drawn out Riddle appears to be trying to throw the investigastion away from himself.

Detroit News prints article saying that Riddle made “hush money” allegation.

The same day in an interview with WJR radio Riddle denies the News’ story and recants “hush money” statement.

So the story had a life of a few hours and Bill Ballinger and Dawson Bell feel the need to feign being insulted because a media consultant was being “bought”. They actually had the nerve to say that they believed that Riddle was an objective voice and that he shouldn’t be projecting himself as non-partisan. HA! Bill Ballinger, former Republican state Representative and now news reporter is throwing stones about media objectivity and who is his partner in crime? Dawson Bell! It was almost too shocking to watch. I was waiting for Nolan Finley to make an appearance to quell the liberal rhetoric coming from Susan Demas. I always watch off the record on Sunday, I don’t know when they taped the show but during the show, right in the middle of Ballingers self-rightous tirade, a message crawled across the screen saying that Riddle had denied the story of the “hush money” payments. It was almost comical accept for Ballinger making an ass of himself with his absurd hypocrisy regarding objective media.

I have long wondered how people can take media like Joe Scarborough and Bill Ballinger seriously. They are both members of and former elected officials from a political party. Their lack of objectivity should be obvious. I am in no way defending Riddle or his attention hungry circus act, but Ballinger and Bell should really look in the mirror before getting atop their high horses.

What a strange week or so!

John Ensign, Mr. Family Values, admits to having an affair. No real shock there, I am very used to Republicans being hypocrites.

Mark Sanford, Mr. Family Values east coast, admits to having an affair. Sanford made a huge spectacle of himself before going down in flames so he gets points for that! If you missed it before; I am used to Republicans being hypocrites. And then the fun started:

- "I would never in my life have believed that Gov. Mark Sanford was capable of doing something interesting,” - Steven Colbert

- "people were shocked because Republicans don't traditionally do well with Hispanic women.” -Conan O’Brien

- "Why can't he be like our governor and use a local escort service?” - David Letterman

And then came some very sad news:

Farrah Fawcett dead at age 62.

And the bombshell:

Michael Jackson dead at age 50.

What a terrible way to end the week. RIP to two legends.

$138 Million slipping away from Michigan

I was asked to go to the capitol to lobby for 2 bills that would bring $138 Million of Federal stimulus money into Michigan to pay for unemployment extensions. One extension would be for workers that are in a training program; they would be allowed to finish the training AND receive unemployment benefits while doing so. The second extension is for people that take part time jobs due to lack of work and lose their unemployment benefits; essentially this worker is punished for working. The Federal government has attached the strings that these two extensions be put into place before any of the $138 Million will come to Michigan.

While at the capitol I heard the Senators saying that they were worried about the cost to businesses down the road. They said that they weren’t going to let the federal government force them into new laws. There are too many strings attached to the $138 Million.

My answers to them were:

- I find it discouraging that you are so worried about the cost to businesses 4 or 5 YEARS down the road while unemployed workers in this state are worried about what food they are going to put in front of their children 4 or 5 DAYS down the road!

- If action had been taken by the state legislature prior to the federal government laying out the stimulus plan, the state might not be in the sorry shape it’s in.

- The strings that are attached are laws. The legislature writes laws. That is what you people do for a living. When the federal money runs out, write another law revoking the programs; end of story. Your precious business community won’t have to pay a cent!

As you can imagine wide eyes and slack jaws followed the shop rat with no job tearing the Senators new ones in their offices. Now I need your help. These senators said they won’t even bring it to a vote. That means that $138 Million that could go to the state of Michigan will be left in D.C.

I need you to contact your state senator; the senate Democrats have written a letter that will be sent to your senator – here it is. Michigan can ill afford to let $138 Million go back to D.C. unclaimed!

Hedge Funds Find Their Spokespeople

Snake oil salesmen and con men everywhere would be proud of the shell game that hedge fund managers have come up with now. When a small group of investors tried to stop the bankruptcy/sale of Chrysler because they were not going to profit heavily enough from their last minute purchases of debt from the ailing company, Americans largely had little to no sympathy. So as a group of people who have no morals or ethical standards might do they are hiding behind a baby to avoid getting hurt and still get what they want.

Who are they using as there shield? Indiana teachers and cops. Not really teachers and cops, but their pension funds. The story goes that if the Chrysler sale goes through that thousands of Indiana teachers, cops and other civil servants will lose huge portions of their pensions. As usual the mainstream media is doing their best roll over job and letting the lawyers for the parties say anything they want unchecked and without question. I smell a rat!

So how did teachers and cops get involved siding with hedge fund managers anyway? Well late last July the investment managers for the Indiana pension fund in question decided amongst all the dire warnings and forecasts about the auto industry that the possibility of profiting during an eventual bankruptcy was to juicy to pass up. If you remember president Obama called this group “speculators” when they initially tried to hold up the deal, John Dingell went so far as to call them “vultures”. What changed?

It seems the hedge fund managers found someone to fight their battle for them; putting a retired Indiana school teacher in a commercial ought to generate some sympathy! Don’t get me wrong I think that it’s awful that someone is gambling with retirees futures like this and the investors that did this should be held accountable. I would venture a guess that pension funds all across the country are doing horribly over the last few years as has most Americans 401k’s. Slippery slope? NO!! Thieves hiding behind teachers and cops to get some more blood from the Chrysler corpse is what it is.

Twisted!

The part about the hedge fund managers being behind the lawsuit is COMPLETE SPECULATION on my part. I just have the feeling that Indiana pension funds aren’t exactly the biggest concern for the lawyer that represented the original group of “dissident bondholders”; an awfully big fish for a public pension fund for Indiana civil servants to land as a representative isn’t it?

Back to the facts. In June of 2008 Standard & Poors lowered the credit rating of Chrysler to “CreditWatch with negative implications” or STAY AWAY!! At the time it seemed like every day another announcement cam damning the auto industry further. To buy the debt was a big risk to begin with and a risk that only paid off in the event of bankruptcy or decades down the road from a financially secure Chrysler. Remember; “speculators”, “vultures”. BusinessWeek spoke to Shelly Lombard a credit analyst and portfolio manager of high-yield and distressed corporate securities, here is what she had to say:

“Even though the debt was secured, it was clear the auto industry was very, very
troubled at this time, if it wasn't, it wouldn't have been offered at such a
steep discount.”

She goes on to talk about the lack of due diligence on the part of the investors handling the pension fund:

In this recession, Lombard says, even secured bank debt is not a guarantee. The
market's low price could have been due to a lack of buyers or because the debt
was impaired. She compares the deal to buying a house at a bargain price:
"Either there's a divorce and the people just want to get out of there, or the
foundation is cracked. In an industry in such turmoil, due diligence becomes
even more critical."

You can read the full BusinessWeek article here.

In the article the lawyer for the “dissident bondholders” and the Indiana pension funds, Thomas Lauria said the deal “is great for workers”. That statement could only come from someone that has no clue about the full context of the “great” deal or who is so interested in getting their share of the winnings from the case that they will say anything. For Lauria to suggest that this deal is “great” is asinine! Undoubtedly not aware that this arrangement is a concession on a concession on a concession for retirees of the big three Lauria sounds like so many of the idiots willing to speak about something they know little about.

The original VEBA was a 2005 mid-contract concession; it set up a trust that was supposed to be funded by the big three to cover retirees health care, allowing the companies to get the costs of their books and prevent bankruptcy we were told. The 2007 contract contained further health care concessions (still waiting for the funding). Then the 2009 concessions contained further health care concessions AND a massive giveaway of the debt to fund the VEBA, also originally secured debt. I doubt Lauria will ever mention this because the media will never bring It up. It is simply too easy to bash auto workers without any pushback nowadays.

Hobby Lobby

In this age of unethical business practices and corporate greed there are a few shining examples. I wrote about Costco and Google back in 2007 detailing their practice of paying their employees well and having CEO’s that don’t take absurd amounts of pay and bonuses even though they run very successful companies. Another company recently did something quite out of the ordinary in todays business world; they gave their employees a raise. Hobby Lobby had a very good year last year ($1.8 Billion in 2008 revenue) so the CEO and upper management sought “to share the wealth with workers” according to Hobby Lobby spokesman Chad Previch. Communist! The idea of giving employees a fair share of the wealth they help generate comes from the top! CEO David Green is the founder of Hobby Lobby and he is the reason the company treats its workers so well:

"We believe our success...is directly attributable to our outstanding employees and our strong corporate values, which are based on biblical principles, including integrity, service to others and giving back to those in need."

Im not kidding the CEO really said that! This is not the first time that this company has acted responsibly; last year when upper management at big oil was gouging the country at the pump Hobby Lobby gave their employees a quarter an hour raise to compensate for the increased cost of gasoline.

Many people right now are saying that this is not possible, business men don’t behave like that and it is some kind of P.R. move. To them I would say; it all happened, MEN should treat each other like this and if it’s a P.R. move why haven’t you heard about it? The sad thing is when a company acts responsibly it doesn’t get enough attention. To make up for that as best I can:

HOBBY LOBBY

When a company acts like this I want them to have my business and so should you!

Bankruptcy

Bankruptcy.

After what seems like years of dragging on, GM finally filed for bankruptcy. With agreements in place with the UAW and creditors we can only hope that this process goes quickly. The coverage is extensive and in my opinion that may be part of the problem.

I spoke to the third reporter in as many days this morning. This one from the BBC, she was looking for someone still working; sorry about your luck. I have been getting interviewed by many reporters and they seem to ask pretty basic questions:

What will you do? Will it work? How did it come to this?

Fair questions. My grievance is this. The coverage also includes opinion pieces from people who know absolutely nothing about the auto industry. The NY Times features an op-ed today that is a pitiful attempt to opine over the news of the day at the expense of depth of knowledge on the subject.

The topic is hot! Let’s do an op-ed! No one with any automotive expertise to contribute? No problem we’ll wing it!

Give it a rest! One of the reasons that GM is its current sorry state is the lack of long term planning and putting people in places where they had little to no expertise. We have board rooms full of CEO apologists that have no idea what they are doing; we don’t need another set on the editorial boards of major newspapers. The NY Times uses the tired phrase “building cars Americans want to buy”, this drives me crazy! Its as if no one is buying GM cars. In 2008 GM sold nearly 3 MILLION cars in the U.S. alone, outselling its closest competitor by 760,000 vehicles. CLEARLY someone is buying these cars and they are Americans. The Times then starts with the usual double speak about building cars that are profitable and fuel efficient while claiming that we as stakeholders in the company deserve assurances from the Obama administration. Lets start with the “profitable and fuel efficient” thing – the most profitable vehicles are large SUV’s and trucks; that’s why Toyota and Honda recently came out with their own (Tundra and Ridgeline). I will agree that fuel efficiency in these vehicles is particularly important because they usually have the worst MPG ratings. HOWEVER; the media still touts the Toyota Prius as the savior of the auto industry as well as the planet. Well the media savior couldn’t even outsell the Chevy Malibu last year. Then the issue of profitability- Toyota loses money on every Prius sold. The company will eventually profit from this line but the amount of money currently involved in R & D and manufacturing don’t reap a profit even after years of production. Next point; the thought process of an investor/shareholder is in terms of the next quarter (3 months), a company the size of GM needs thought process along the lines of the next decade. The recent past leaders of GM had no vision or long term plan and we are all paying a price. Americans should not have the mindset of shareholders of GM but of stakeholders with a long term investment.

At the end of the day moving forward towards a profitable GM will involve a combination of the government pushing the company to appoint board members who are experts instead of yes men, the government also forming a legitimate industrial policy that helps domestic production along the lines of competitors governments, and the public rejecting blow hard talking heads that are speaking outside of their scope of knowledge. It’s easy to parrot the guy on TV, real problems require genuine reflection and study. I fear that asking David Brooks, a right wing political pundit, about the auto industry will be a weekly segment on the Sunday morning talk shows. There are many things that someone like David Brooks could discuss for hours; speaking from months studying the subject, conducting interviews and doing research; the auto industry is not one of them.

UAW Concessions III

There is a commercial where Evander Holyfield (former Heavyweight boxing champion) is running through offices yelling at a sportswriter that wrote some insulting remarks, “Come get your whipping!” on my way to go hear about the latest round of concessions (third time in five years) I felt like the heavyweight champ was telling me to “come get my whoopin’!” I have the feeling that the vote will ratify the new concessions. Most of the people I know were expecting many of the new cuts.

The list of concessions was particularly brutal to retirees (again). Retirees will lose ALL vision and dental coverage. They will now have increased prescription co-pays (2nd time in 3 years that this will happen to them.) the VEBA fund which is to start to fund all retiree health care starting in 2010 took the brunt of the concessions having a massive portion of the funding of the trust carved away and a portion of the funding that will be paid will be paid out in GM stock (as good as gold!)

I won’t get into the specifics of all of the concessions that the active took that list is too long. The Detroit Free Press has released the entire summary that I got at the meeting and vote that will took place at the Lansing Center today. If you care to read it here is the link.

As I sat in my third meeting to review our concessions in 5 years I looked at a friend sitting with me and said “I hate these meetings!”, we both laughed so hard that dozens of people were giving us dirty looks. In a room full of layed off workers, retirees and active workers the mood was as good as can be expected. I guess when your options are “take these concessions or let a bankruptcy judge decide what you get” you have limited options.