April 24, 2025 • 25 mins
Listen on:
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Chris delivers a sweeping takedown of the romanticized myths surrounding American manufacturing, union-driven nostalgia, and tariff-based solutions. Using historical examples from Detroit’s decline to the failure of GM’s Saturn experiment, he exposes how corporate arrogance, labor resistance, and government bailouts have crippled U.S. industry. From the UAW’s recent PR appearances to the deeper systemic flaws in policy and education, Markowski argues that America’s industrial revival won’t come from symbolism or populist stunts—it’ll come from innovation, accountability, and cultural overhaul. www.watchdogonwallstreet.com
Apple Podcasts:https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608
Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i
Watch on: https://www.youtube.com/@WatchdogOnWallstreet/featured
Chris delivers a sweeping takedown of the romanticized myths surrounding American manufacturing, union-driven nostalgia, and tariff-based solutions. Using historical examples from Detroit’s decline to the failure of GM’s Saturn experiment, he exposes how corporate arrogance, labor resistance, and government bailouts have crippled U.S. industry. From the UAW’s recent PR appearances to the deeper systemic flaws in policy and education, Markowski argues that America’s industrial revival won’t come from symbolism or populist stunts—it’ll come from innovation, accountability, and cultural overhaul. www.watchdogonwallstreet.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
All right, I wonder what happened? What happened to mister
ua w Remember the guy at the beginning of the
month of April that Fox News would parade on after
Liberation Day, And he's rr uad W worker and he's
got his got his hat on and his Trump hat
and his Trump shirt.
Speaker 3 (00:34):
And ye, dude, raw raw Trump and he's tariffs the
greatest things ever. And we we saw manufacturing jobs leave
the company get dames.
Speaker 2 (00:44):
Yeah, the userle Rant and Raven and all of a sudden,
oh yeah, yeah, he got fame there head of the
UAW again supporting Donald Trump. He did. Oh they're loving
these tariffs. This is gonna be great, this is gonna
be fantastic. Stick They lie, they lie, they lie, and
it just never stops. The myths surrounding manufacturing. Oh yeah,
(01:09):
it makes for a nice story. It makes for a
nice story. You know, the problem is with these manufacturing
myths and stories that these politicians create. I love myths.
I love Greek mythology. I do. There's actually a lesson
to be learned from the various different Greek myths. I
(01:30):
use the mythology a lot. And some of the stories
that I write thing about American myths, capitalism, manufacturing myths,
they're just that, okay, the stories contrived to push an
agenda for a certain side or a belief system that's
never true. Never true. Any new car, yeah, yeah again,
(02:00):
I won't again. I've had this car for five years now.
It's got one hundred and fifteen thousand miles on it.
Probably should have gotten rid of it a long time ago,
German car. So I took it in. Uh not to
you know, I've got a great mechanic down here. Honest.
(02:20):
He's like, listen, He's like, I'm not chargy. I said,
there makes no sense in fixing this thing. They don't
make these cars the way any car the way that
they used to used to be able to drop drive
cars for two hundred thousand plus miles. No longer the case.
I said, okay, I said, you know, he's like, oh,
I've put it on car van. I'm not going to
do that. I'm not going to stick somebody with a
crappy car. I'm going to go and trade in somewhere.
(02:42):
Whatever I get for it, I get for it anyway,
neither here nor there. So I'm asking buddies of mine,
buddies of mine again, this is a car that I'm
going to use for my kids at college. Buddy mine's
got a Ford Bronco. Recently got a Ford Bronco the
new rem It all looks all nice, take the doors
off cool, you know, don't do it. Don't do it.
(03:07):
It is a p O s okay. Uh. Same buddy
of mine also has one of those uh those massive suburbans. Yeah,
he had. He basically lost his suburban for several months.
Water got in through the sun roof. Eventually it got
(03:29):
into the car and leaked all over the place. They
had to tear the entire interior apart, almost they had
to scrap the entire thing. The last uh last, I
have a Jeep Cherokee. Jeep Cherokee, and that's Stilantis was
a Dutch company. But I think the car's made here
in the United States, so say making America have havn't
(03:50):
any problem with that. And I think I'll probably get
another one of those when all is said and done.
I you know, I did buy a Cadillac two thousand
and eight. Oh yeah, remember they do two thousand and
eight Cadillacs cts. Go take a look at it. That
model at that point in time, it was a hot
looking car and it was ange went bad ran find
(04:11):
didn't have too many problems. Interior leather wore off, fall apart.
It's crap. It's crap. Anyway, that was under three years,
under three years anyway, take that, we'll put that aside.
At this point in time, we have this myth, this
(04:33):
belief system that yeah, the Japanese and then the Chinese
they dinking your game. They came and they wreck manufacturing
here in the United States. It was a combination of things. Okay,
it's a combination of things. Combination of crappy corporate culture
(04:53):
at American auto manufacturers and yeah, unions, unions. Great line,
great line that I use all the time. The Gordon
Gecko telled our paper speech, you either do it right
or you get eliminated. We stopped doing it right. It
(05:20):
was a great piece today by Amal Naj Wall Street Journal.
He was a has been around he was a reporter
at the Wall Street Journalist. There was an editorial piece
today in the nineteen eighties and time he wrote about
our inability to adapt to competition. Ken that happens. What
(05:48):
happens when you can't adapt to competition, you get eliminated
by putting eye popping tariffs on imports. President and Trump
hopes to hopes to bring manufacturing back home. What is
administration overlooks is US industry's culpability in the current state
(06:12):
of affairs. It's an open question whether American companies can
change course again, Amal Naje. This is something we've been
preaching here on the program for some time. President Reagan tried.
His administration used a variety of tactics in the nineteen
eight's to restrict steel and auto imports, giving US manufacturers
(06:33):
time to remake themselves in the face of a formidable
foreign onslaught. But domestic manufacturers failed to rise to the
occasion and failed miserably. As I witnessed as a reporter
for the Journal covering America's industrial belt as its most
pivotal moment of decline. That failure foreshadow what has become
(06:58):
a national concern earn today our extraordinarily heavy reliance on
manufacturing offshore and industries critical to our national security and economy.
Last year, Steel Auto's machinery, electric equipment, and pharmaceuticals together
accounted for seventy seven point five percent of the country's
one point two trillion dollar trade deficit. Take the auto industry,
(07:20):
only about half of new cars sold in the US
and twenty twenty four were manufactured locally, and many of
these had important parts. In the nineteen eighties, it was
common refrained that of General Motors, America's largest industrial enterprise, sneezed.
(07:40):
The rest of the country caught a cold. Steel and
a host of other industries depended on the car industry's
well being. So did many US workers and consumers. But
in the face of growing foreign threats, Erican manufacturers seemed
(08:02):
in denial. Again, this happens a lot. It's natural. They
think of other companies that decided to be in denial. Kodak,
how about Smith and Corona typewriter company, Polaroid Company after
(08:30):
their company, No, no, no, this is the way we
do it. There was a story about Xerox. Xerox and
the things that they invented that you know, like the
mouse and whatnot that they sold for nothing to guys
like you know, Bill Gates and Steve Jobs took the technology.
(08:53):
It was it the original DOS disc operating system. I
think Bill Gates bought it for fifty grand. Yeah. Anyway,
they all believe that freaking General Motors. You know who
you mess with us? Job, We're GM. We're GM. Can't
(09:13):
knock us off our pedestal? Sure, right, and again it's
the height of arrogance. You ever see those areas surrounding
the city of Detroit, the mansions, the type of wealth,
what those executives were making at that point in time.
(09:34):
Send their kids the University of Michigan right right right
right there, you know, regular turnstile right back there, executive
C suite, General Motors, Ford, Chrysler. How'd that work out?
Another thing is sorry, sorry, uh mister union guys. You
didn't help either. I mean I talked about this during
(10:00):
the auto bailouts, where eventually the American auto manufacturers, based
upon the contracts that they had, they weren't even car
companies anymore. They were benefits companies that made cars. There
were basically benefits companies, pension and healthcare companies that also Yeah,
we make cars too. The United steel Workers and the
(10:24):
United Auto Workers viewed US import restraints simply as a
means for protecting their jobs and their wages, which were
twice those in Japan. The unions also resisted companies attempts
to revise outdated union job classifications to combine tasks into
(10:47):
one employees workload to bolster productivity. Business leaders failed to
win over labor unions with a promising master plan to
protect their few as well as the companies against imports,
firms couldn't articulate one. If anything, automakers sent a confusing
(11:10):
message about the fight with foreign competition, even as they
asked workers to sacrifice The company's got in bed with
the enemy. GM signed deals with Japan's Ezuzu and Suzuki
to import their cars into the United States, and subsequently
formed a joint venture with Toyota. Other automakers struck similar
deals with japan'st competitors Japanese competitors, including joining hands to
(11:34):
build cars in the United States. GM then lobbied shamelessly
lobbied to raise import quotas so it could bring in
cars from Japan. The American companies professed that they wanted
to learn from the Japanese before launching a new high
tech factories themselves. I remember all of this on TV
(11:57):
with the Japanese way and the exercise for all this stuff,
even if taken in good faith, bad call Us automakers
would eventually invest billions in new technology and automation to
remake their Henry Ford era assembly operations. But they remember Saturn.
(12:21):
I remember Saturn, and my brother Michael wrote his college
thesis on Saturn. Yep Ford's that was GMS with Saturn.
Fords was Alpha and Chrysler's was Liberty. They aimed to
reduce drastically the parts and labor that went into a
car to close the gap on the Japanese cost advantage
of two thousand dollars a vehicle, and they planned to
(12:42):
do it in four years. Nineteen eighty six, GM unveiled
its six hundred million dollar plant in a hem Tremack, Michigan,
on Detroit's East Side to showcase industrial high technology. Yeah,
but the robot broke down easily and were prone to error.
(13:02):
They welded the wrong joints, miss Spotsmen spray painting cars,
sometimes they sprayed each other. Workers couldn't get the complicated
machines with their programmable instructions and electronic centers to communicate
with each other and pass tasks on to the next station. Quote.
I have bolted fifty wrong bumpers Cadillac on an olds
and olds on a Buick, a Buick on a Cadillac,
(13:24):
A worker bolting robot chosen parts told me on a
visit to the plant. The final blow to American automakers
came when Japanese manufacturers set up plants across the United States.
The Mazda plant just south of Detroit began producing cars
for twenty five percent less than a GM on American
(13:49):
soil with American workers. The US Auto US Auto industries
demise inflicted collad damage on other domestic manufacturing. Steelmakers, with
their umbilical cord tied to Detroit and hobbled along after
automakers lead without much thought to foreign competition until it
(14:11):
was too late. There had been little talking boardrooms of
modernizing their age old blast furnaces or adopting new technologies
and production approaches, such as electric arc furnaces to make
cheaper steel from scraps. In the early eighties, domestic customers
from can and Appliance to automotive part producers turned to
(14:32):
foreign suppliers for better prices and quality. Again, you either
do it right or you get eliminated. Dated your gibbs gee.
I wonder why Ford abandoned its storied Rouge Steel plant
(14:53):
in Dearborn, blaming the Union. In succession, steel businesses closed, urged,
or disappeared into companies steel workers had never heard of.
These were manufacturers's names had evoked the might of American
and industrial power with their miles long factories converting iron
ore into mammoth blast furnaces and rolling mills. Bethlehem Steel,
(15:17):
Jones and Laughlin National Steel, and Republic Steel, the last
of the great American steel makers. US Steel member Hymen Roth.
We're bigger than US Steel. Yeah. One the world's largest
is now fighting for its life. In twenty twenty three,
had agreed to be owned by Nippon Steel, and I
(15:39):
didn't have any problem with it. That deal should go through.
The robots that US automakers had embraced also fell by
the wayside. The American inventor of industrial robots US Unimation,
along with others that jumped into the business, such as
Westinghouse and General Electric, quit Japan. Which licensed the technology
(16:05):
from the US, is now a major robot manufacturer along
with South Korea and China. Our basic approach was wrong.
This was the head of Westinghouse's Advanced Technology Group in
nineteen ninety. It was a classic case of trying to
merge an entrepreneurial organization into a relatively slow moving large
(16:31):
American corporation. Bloat, fat, fat and lazy corporate execs, far
from learning from their mistakes, US aunor makers repeated them
as foreign competition intensified. In the early nineteen nineties, GM
foreign Chrysler spent billions to develop electric cars. GM unveiled
(16:58):
its first commercial electric car nine nine six, But eventually
these manufacturers gave up because they couldn't see the future.
It was as if Henry Ford had built his Model
T before the discovery of gasoline. Again, also as well,
and one of the things that NAJ fails to mention
(17:21):
in this column is the fact that government regulations and
cafe standards and all that crap didn't help. Also, GM's
chairman Rogers Smith admitted in nineteen eighty six that the
carmaker was mistaken and believing it could fundamentally change manufacturing
with technology in one fell swoop. Thousands of little innovations
(17:44):
in manufacturing have nothing to do with automation, but find
fruitful application through trial and error. What's known in industry
as continuous improvement, aimed at cutting costs and enhancing quality.
These innovations evolve over times, not technology drive the process.
In the future, Smith vowed solid human partnerships will form
(18:07):
the ground floor on which high technology systems will be built.
American manufacturers have always known that remaking domestic manufacturing would
be hard. It would require winning labor concessions, investing investments
in training workers and new skills, creating a factory culture
that fostered creativity and innovation on the floor level, and
(18:29):
taking a longer view on the investments to fight competition companies. Instead,
now we're going to do screw that. We're just going
to locate offshore. They took their business where they couldn't
make money. Again, they didn't worry about trade and balances,
and they're not going to worry about trade and balances.
(18:50):
Now that is the reality. And again I've written extensively
about this over the years column I wrote, uh talked
about it before here on the program. This is July
of two thousand and seven. Even blue chips die. Now again,
this is two thousand and seven. Okay. At this point time,
(19:14):
we were warning everybody something wicked this way comes again.
At that point in time that, you know, CNBC was
throwing a party. Now it just hit fourteen thousand. Uh
you know Maria Bartaromo, I remember having it. It looked
like she just got a five hundred percent raise. Everything
was just fantastic, all sorts of great stuff. Uh yeah.
(19:35):
Fox News had fireworks explosions on their television at that
I wrote the column after all that, I said, we
predict that Markowski Investments Watchdog on Wall Street, that Walmart
and General Electric are no longer going to exist. How
can you say such a thing as I can? How
(19:58):
can one say that two Dow components, what g was
a Dow component, cornerstones of our economy. Titans of industry
will no longer be in business. And they won't be
the first Titans to fall, and they won't be the last,
but sooner or later they're going to go out of business.
(20:19):
And I talked about the Dutch East India Company, Dutchiest
India company. You know, they had a they had the
largest military in the world for a point time. They
had big they had a bigger military than the UK
government did for crimeel and they were founded in sixteen
o two, two hundred years I paid an eighteen percent dividend. Yeah,
(20:45):
yeah again. People, if you're not innovating, if you're not innovating,
if you're not getting better, if you're not perpetually growing
and reinventing yourself, and if you sit on your fat
buttoxes and get happy based upon where you are, you're
(21:07):
going to get eliminated. Gonna get eliminated. I was miffed
at George W. Bush with his auto bailouts that Obama
did it again? Why Why could have been a great
opportunity to reset manufacturing here in the United States. But again,
(21:29):
nobody wants to deal with the reality of what needed
to be done. Column I wrote about this as well.
Nineteen sixties, early nineteen seventies, Walmart Wall Street gave us
what was called the nifty to fifty. There was a
list of stocks that investors could buy and hold forever.
Yeah again. On that list, Polaroid, Burrows, Joe Schlitz, Brewing, Kmart,
(21:54):
International Harvester. Yeah, where are they today today? Nineteen nineties,
we were told, oh, this time it's different, new economy.
Earnings don't matter anymore. Enron another company that we called
out as a fugaesi name Fortune Magazine's most Innovative company
six years straight, six years straight at that point in time. Again,
(22:24):
the Treasury Secretary of the United States, Hank Paulson in
two thousand and seven said, this is far and away
the strongest global economy I have seen in my business lifetime.
Then what happened? Then? What happened? Anyway? Tariffs? Tariffs are
(22:50):
not going to solve structural issues here in the United States.
They're just not. We do many things very well here
in the United States, much better than other places, and
I do believe that we need to continue to lean
into that. Can we improve and bring back certain manufacturing
(23:14):
into the nice sense? Yeah, I do believe that's the
case as well. I do. But populism is not going
to do it. Popular is not going to do it.
Holding a ridiculous press conference at the White House with
a bunch of UAW workers, you know, it's the same
bloody thing. It's it's it's like props. Remember when Obama?
(23:38):
Remember when Obama? Did you know? Did you know the
Obamacare that he had all of the the doctors wearing
their white coats there and you got, of course you
had to had a couple sensitive ponytail guys doctors up
there as well. And he did this Liberation Day. I'm
you and your workers here too, and props show. Would
(24:03):
I like to see may vent? Yeah? Sure, but the
right way by being more competitive, by being more competitive. Again,
we have addressed this here on the program. We gotta
start this in the eighth grade. This is good. This
is a multime, multime, multi year I mean process that
(24:26):
needs to take place. Is something that's not gonna happen
overnight by any stretch the imaginations. We don't have the
workers right now putting the car before. Donald Trump's doing
the same thing with the electrify the country. Green wackos
are saying, put everybody to look the cars, really, how
(24:49):
on what grid? And where are they going to park
and where? I mean, it's the same exact thing. Watchdog
on Wall Street dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
All right, I wonder what happened? What happened to mister
ua w Remember the guy at the beginning of the
month of April that Fox News would parade on after
Liberation Day, And he's rr uad W worker and he's
got his got his hat on and his Trump hat
and his Trump shirt.
Speaker 3 (00:34):
And ye, dude, raw raw Trump and he's tariffs the
greatest things ever. And we we saw manufacturing jobs leave
the company get dames.
Speaker 2 (00:44):
Yeah, the userle Rant and Raven and all of a sudden,
oh yeah, yeah, he got fame there head of the
UAW again supporting Donald Trump. He did. Oh they're loving
these tariffs. This is gonna be great, this is gonna
be fantastic. Stick They lie, they lie, they lie, and
it just never stops. The myths surrounding manufacturing. Oh yeah,
(01:09):
it makes for a nice story. It makes for a
nice story. You know, the problem is with these manufacturing
myths and stories that these politicians create. I love myths.
I love Greek mythology. I do. There's actually a lesson
to be learned from the various different Greek myths. I
(01:30):
use the mythology a lot. And some of the stories
that I write thing about American myths, capitalism, manufacturing myths,
they're just that, okay, the stories contrived to push an
agenda for a certain side or a belief system that's
never true. Never true. Any new car, yeah, yeah again,
(02:00):
I won't again. I've had this car for five years now.
It's got one hundred and fifteen thousand miles on it.
Probably should have gotten rid of it a long time ago,
German car. So I took it in. Uh not to
you know, I've got a great mechanic down here. Honest.
(02:20):
He's like, listen, He's like, I'm not chargy. I said,
there makes no sense in fixing this thing. They don't
make these cars the way any car the way that
they used to used to be able to drop drive
cars for two hundred thousand plus miles. No longer the case.
I said, okay, I said, you know, he's like, oh,
I've put it on car van. I'm not going to
do that. I'm not going to stick somebody with a
crappy car. I'm going to go and trade in somewhere.
(02:42):
Whatever I get for it, I get for it anyway,
neither here nor there. So I'm asking buddies of mine,
buddies of mine again, this is a car that I'm
going to use for my kids at college. Buddy mine's
got a Ford Bronco. Recently got a Ford Bronco the
new rem It all looks all nice, take the doors
off cool, you know, don't do it. Don't do it.
(03:07):
It is a p O s okay. Uh. Same buddy
of mine also has one of those uh those massive suburbans. Yeah,
he had. He basically lost his suburban for several months.
Water got in through the sun roof. Eventually it got
(03:29):
into the car and leaked all over the place. They
had to tear the entire interior apart, almost they had
to scrap the entire thing. The last uh last, I
have a Jeep Cherokee. Jeep Cherokee, and that's Stilantis was
a Dutch company. But I think the car's made here
in the United States, so say making America have havn't
(03:50):
any problem with that. And I think I'll probably get
another one of those when all is said and done.
I you know, I did buy a Cadillac two thousand
and eight. Oh yeah, remember they do two thousand and
eight Cadillacs cts. Go take a look at it. That
model at that point in time, it was a hot
looking car and it was ange went bad ran find
(04:11):
didn't have too many problems. Interior leather wore off, fall apart.
It's crap. It's crap. Anyway, that was under three years,
under three years anyway, take that, we'll put that aside.
At this point in time, we have this myth, this
(04:33):
belief system that yeah, the Japanese and then the Chinese
they dinking your game. They came and they wreck manufacturing
here in the United States. It was a combination of things. Okay,
it's a combination of things. Combination of crappy corporate culture
(04:53):
at American auto manufacturers and yeah, unions, unions. Great line,
great line that I use all the time. The Gordon
Gecko telled our paper speech, you either do it right
or you get eliminated. We stopped doing it right. It
(05:20):
was a great piece today by Amal Naj Wall Street Journal.
He was a has been around he was a reporter
at the Wall Street Journalist. There was an editorial piece
today in the nineteen eighties and time he wrote about
our inability to adapt to competition. Ken that happens. What
(05:48):
happens when you can't adapt to competition, you get eliminated
by putting eye popping tariffs on imports. President and Trump
hopes to hopes to bring manufacturing back home. What is
administration overlooks is US industry's culpability in the current state
(06:12):
of affairs. It's an open question whether American companies can
change course again, Amal Naje. This is something we've been
preaching here on the program for some time. President Reagan tried.
His administration used a variety of tactics in the nineteen
eight's to restrict steel and auto imports, giving US manufacturers
(06:33):
time to remake themselves in the face of a formidable
foreign onslaught. But domestic manufacturers failed to rise to the
occasion and failed miserably. As I witnessed as a reporter
for the Journal covering America's industrial belt as its most
pivotal moment of decline. That failure foreshadow what has become
(06:58):
a national concern earn today our extraordinarily heavy reliance on
manufacturing offshore and industries critical to our national security and economy.
Last year, Steel Auto's machinery, electric equipment, and pharmaceuticals together
accounted for seventy seven point five percent of the country's
one point two trillion dollar trade deficit. Take the auto industry,
(07:20):
only about half of new cars sold in the US
and twenty twenty four were manufactured locally, and many of
these had important parts. In the nineteen eighties, it was
common refrained that of General Motors, America's largest industrial enterprise, sneezed.
(07:40):
The rest of the country caught a cold. Steel and
a host of other industries depended on the car industry's
well being. So did many US workers and consumers. But
in the face of growing foreign threats, Erican manufacturers seemed
(08:02):
in denial. Again, this happens a lot. It's natural. They
think of other companies that decided to be in denial. Kodak,
how about Smith and Corona typewriter company, Polaroid Company after
(08:30):
their company, No, no, no, this is the way we
do it. There was a story about Xerox. Xerox and
the things that they invented that you know, like the
mouse and whatnot that they sold for nothing to guys
like you know, Bill Gates and Steve Jobs took the technology.
(08:53):
It was it the original DOS disc operating system. I
think Bill Gates bought it for fifty grand. Yeah. Anyway,
they all believe that freaking General Motors. You know who
you mess with us? Job, We're GM. We're GM. Can't
(09:13):
knock us off our pedestal? Sure, right, and again it's
the height of arrogance. You ever see those areas surrounding
the city of Detroit, the mansions, the type of wealth,
what those executives were making at that point in time.
(09:34):
Send their kids the University of Michigan right right right
right there, you know, regular turnstile right back there, executive
C suite, General Motors, Ford, Chrysler. How'd that work out?
Another thing is sorry, sorry, uh mister union guys. You
didn't help either. I mean I talked about this during
(10:00):
the auto bailouts, where eventually the American auto manufacturers, based
upon the contracts that they had, they weren't even car
companies anymore. They were benefits companies that made cars. There
were basically benefits companies, pension and healthcare companies that also Yeah,
we make cars too. The United steel Workers and the
(10:24):
United Auto Workers viewed US import restraints simply as a
means for protecting their jobs and their wages, which were
twice those in Japan. The unions also resisted companies attempts
to revise outdated union job classifications to combine tasks into
(10:47):
one employees workload to bolster productivity. Business leaders failed to
win over labor unions with a promising master plan to
protect their few as well as the companies against imports,
firms couldn't articulate one. If anything, automakers sent a confusing
(11:10):
message about the fight with foreign competition, even as they
asked workers to sacrifice The company's got in bed with
the enemy. GM signed deals with Japan's Ezuzu and Suzuki
to import their cars into the United States, and subsequently
formed a joint venture with Toyota. Other automakers struck similar
deals with japan'st competitors Japanese competitors, including joining hands to
(11:34):
build cars in the United States. GM then lobbied shamelessly
lobbied to raise import quotas so it could bring in
cars from Japan. The American companies professed that they wanted
to learn from the Japanese before launching a new high
tech factories themselves. I remember all of this on TV
(11:57):
with the Japanese way and the exercise for all this stuff,
even if taken in good faith, bad call Us automakers
would eventually invest billions in new technology and automation to
remake their Henry Ford era assembly operations. But they remember Saturn.
(12:21):
I remember Saturn, and my brother Michael wrote his college
thesis on Saturn. Yep Ford's that was GMS with Saturn.
Fords was Alpha and Chrysler's was Liberty. They aimed to
reduce drastically the parts and labor that went into a
car to close the gap on the Japanese cost advantage
of two thousand dollars a vehicle, and they planned to
(12:42):
do it in four years. Nineteen eighty six, GM unveiled
its six hundred million dollar plant in a hem Tremack, Michigan,
on Detroit's East Side to showcase industrial high technology. Yeah,
but the robot broke down easily and were prone to error.
(13:02):
They welded the wrong joints, miss Spotsmen spray painting cars,
sometimes they sprayed each other. Workers couldn't get the complicated
machines with their programmable instructions and electronic centers to communicate
with each other and pass tasks on to the next station. Quote.
I have bolted fifty wrong bumpers Cadillac on an olds
and olds on a Buick, a Buick on a Cadillac,
(13:24):
A worker bolting robot chosen parts told me on a
visit to the plant. The final blow to American automakers
came when Japanese manufacturers set up plants across the United States.
The Mazda plant just south of Detroit began producing cars
for twenty five percent less than a GM on American
(13:49):
soil with American workers. The US Auto US Auto industries
demise inflicted collad damage on other domestic manufacturing. Steelmakers, with
their umbilical cord tied to Detroit and hobbled along after
automakers lead without much thought to foreign competition until it
(14:11):
was too late. There had been little talking boardrooms of
modernizing their age old blast furnaces or adopting new technologies
and production approaches, such as electric arc furnaces to make
cheaper steel from scraps. In the early eighties, domestic customers
from can and Appliance to automotive part producers turned to
(14:32):
foreign suppliers for better prices and quality. Again, you either
do it right or you get eliminated. Dated your gibbs gee.
I wonder why Ford abandoned its storied Rouge Steel plant
(14:53):
in Dearborn, blaming the Union. In succession, steel businesses closed, urged,
or disappeared into companies steel workers had never heard of.
These were manufacturers's names had evoked the might of American
and industrial power with their miles long factories converting iron
ore into mammoth blast furnaces and rolling mills. Bethlehem Steel,
(15:17):
Jones and Laughlin National Steel, and Republic Steel, the last
of the great American steel makers. US Steel member Hymen Roth.
We're bigger than US Steel. Yeah. One the world's largest
is now fighting for its life. In twenty twenty three,
had agreed to be owned by Nippon Steel, and I
(15:39):
didn't have any problem with it. That deal should go through.
The robots that US automakers had embraced also fell by
the wayside. The American inventor of industrial robots US Unimation,
along with others that jumped into the business, such as
Westinghouse and General Electric, quit Japan. Which licensed the technology
(16:05):
from the US, is now a major robot manufacturer along
with South Korea and China. Our basic approach was wrong.
This was the head of Westinghouse's Advanced Technology Group in
nineteen ninety. It was a classic case of trying to
merge an entrepreneurial organization into a relatively slow moving large
(16:31):
American corporation. Bloat, fat, fat and lazy corporate execs, far
from learning from their mistakes, US aunor makers repeated them
as foreign competition intensified. In the early nineteen nineties, GM
foreign Chrysler spent billions to develop electric cars. GM unveiled
(16:58):
its first commercial electric car nine nine six, But eventually
these manufacturers gave up because they couldn't see the future.
It was as if Henry Ford had built his Model
T before the discovery of gasoline. Again, also as well,
and one of the things that NAJ fails to mention
(17:21):
in this column is the fact that government regulations and
cafe standards and all that crap didn't help. Also, GM's
chairman Rogers Smith admitted in nineteen eighty six that the
carmaker was mistaken and believing it could fundamentally change manufacturing
with technology in one fell swoop. Thousands of little innovations
(17:44):
in manufacturing have nothing to do with automation, but find
fruitful application through trial and error. What's known in industry
as continuous improvement, aimed at cutting costs and enhancing quality.
These innovations evolve over times, not technology drive the process.
In the future, Smith vowed solid human partnerships will form
(18:07):
the ground floor on which high technology systems will be built.
American manufacturers have always known that remaking domestic manufacturing would
be hard. It would require winning labor concessions, investing investments
in training workers and new skills, creating a factory culture
that fostered creativity and innovation on the floor level, and
(18:29):
taking a longer view on the investments to fight competition companies. Instead,
now we're going to do screw that. We're just going
to locate offshore. They took their business where they couldn't
make money. Again, they didn't worry about trade and balances,
and they're not going to worry about trade and balances.
(18:50):
Now that is the reality. And again I've written extensively
about this over the years column I wrote, uh talked
about it before here on the program. This is July
of two thousand and seven. Even blue chips die. Now again,
this is two thousand and seven. Okay. At this point time,
(19:14):
we were warning everybody something wicked this way comes again.
At that point in time that, you know, CNBC was
throwing a party. Now it just hit fourteen thousand. Uh
you know Maria Bartaromo, I remember having it. It looked
like she just got a five hundred percent raise. Everything
was just fantastic, all sorts of great stuff. Uh yeah.
(19:35):
Fox News had fireworks explosions on their television at that
I wrote the column after all that, I said, we
predict that Markowski Investments Watchdog on Wall Street, that Walmart
and General Electric are no longer going to exist. How
can you say such a thing as I can? How
(19:58):
can one say that two Dow components, what g was
a Dow component, cornerstones of our economy. Titans of industry
will no longer be in business. And they won't be
the first Titans to fall, and they won't be the last,
but sooner or later they're going to go out of business.
(20:19):
And I talked about the Dutch East India Company, Dutchiest
India company. You know, they had a they had the
largest military in the world for a point time. They
had big they had a bigger military than the UK
government did for crimeel and they were founded in sixteen
o two, two hundred years I paid an eighteen percent dividend. Yeah,
(20:45):
yeah again. People, if you're not innovating, if you're not innovating,
if you're not getting better, if you're not perpetually growing
and reinventing yourself, and if you sit on your fat
buttoxes and get happy based upon where you are, you're
(21:07):
going to get eliminated. Gonna get eliminated. I was miffed
at George W. Bush with his auto bailouts that Obama
did it again? Why Why could have been a great
opportunity to reset manufacturing here in the United States. But again,
(21:29):
nobody wants to deal with the reality of what needed
to be done. Column I wrote about this as well.
Nineteen sixties, early nineteen seventies, Walmart Wall Street gave us
what was called the nifty to fifty. There was a
list of stocks that investors could buy and hold forever.
Yeah again. On that list, Polaroid, Burrows, Joe Schlitz, Brewing, Kmart,
(21:54):
International Harvester. Yeah, where are they today today? Nineteen nineties,
we were told, oh, this time it's different, new economy.
Earnings don't matter anymore. Enron another company that we called
out as a fugaesi name Fortune Magazine's most Innovative company
six years straight, six years straight at that point in time. Again,
(22:24):
the Treasury Secretary of the United States, Hank Paulson in
two thousand and seven said, this is far and away
the strongest global economy I have seen in my business lifetime.
Then what happened? Then? What happened? Anyway? Tariffs? Tariffs are
(22:50):
not going to solve structural issues here in the United States.
They're just not. We do many things very well here
in the United States, much better than other places, and
I do believe that we need to continue to lean
into that. Can we improve and bring back certain manufacturing
(23:14):
into the nice sense? Yeah, I do believe that's the
case as well. I do. But populism is not going
to do it. Popular is not going to do it.
Holding a ridiculous press conference at the White House with
a bunch of UAW workers, you know, it's the same
bloody thing. It's it's it's like props. Remember when Obama?
(23:38):
Remember when Obama? Did you know? Did you know the
Obamacare that he had all of the the doctors wearing
their white coats there and you got, of course you
had to had a couple sensitive ponytail guys doctors up
there as well. And he did this Liberation Day. I'm
you and your workers here too, and props show. Would
(24:03):
I like to see may vent? Yeah? Sure, but the
right way by being more competitive, by being more competitive. Again,
we have addressed this here on the program. We gotta
start this in the eighth grade. This is good. This
is a multime, multime, multi year I mean process that
(24:26):
needs to take place. Is something that's not gonna happen
overnight by any stretch the imaginations. We don't have the
workers right now putting the car before. Donald Trump's doing
the same thing with the electrify the country. Green wackos
are saying, put everybody to look the cars, really, how
(24:49):
on what grid? And where are they going to park
and where? I mean, it's the same exact thing. Watchdog
on Wall Street dot Com
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