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2.0 out of 5 stars The benefits of globalization without its penalties, March 26, 2012
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This review is from: The Selling of the American Economy: How Foreign Companies Are Remaking the American Dream (Hardcover)
My purpose was to gauge how Japanese management ran their American enterprises. So, I was interested in the author's comments regarding Toyota. I would say that she confirmed that the American workplace at Toyota's American assembly plants is collegial and generally cooperative between management and the rank-and-file. This is good. In contrast, the Big 3 is beset with terrible labor relations, but one should never just limit this style to GM, Ford or Chrysler.

Work in America is "employment at will." When your boss objects to your suggestions (and if you persist), then he can get rid of you. In my work life, working for a major bank in San Francisco, one would be highly impressed with its Human Resources policies, but the practice is to ferret out "team members" who have a different perspective on how best to accomplish work goals. And then make it disciplinary. So much of the workplace is dominated by martinets and bosses, not leaders (despite their MBAs). Thus, in this book, you can sense its anti-union pitch. Yet, in our current political discussion of right-to-work, the conservatives often overlook what collective bargaining has achieved. Think about the 40 hour work week, paid overtime, healthcare plans, pensions, educational benefits and training, grievance procedures, etc. The point is that unions have essentially been successful.

What is overlooked in the book is what happens when everything goes south. That is, a decent foreign employer turns over its operations to an tyrannical American manager who is tasked with achieving significant cost savings. Suddenly, the Toyota American employee no longer enjoys 3 or 4 weeks of paid vacation; it is reduced to the basic two weeks. He may be told that his pay raise is limited to zero or 1% but then he notices that the boss' favorite or pet "star performers" get really great raises. This kind of crap happens all the time in American offices and factories. Thus, there is a reluctance for the Deep South employees to join because currently they are shown the proper respect. The other side of the equation not discussed is how American unionists support their craft with apprentice programs and standards. How would conservatives react to their employers reducing the pay and benefits. Many employees experienced this in the Great Recession.

Who would you rather have work on your home for a major repair - the knowledgible and competent Mike Holmes team (HGTV "Holmes Inspection) or the people who caused the problems? This same scenario plays out with the tanker aircraft battle between EADS and Boeing. The Grumman Northrop partnership was backed by Sen McCain to do union busting. Boeing's move to build a new 787 factory in South Carolina follows suit. It might be that the A330 is a better aircraft because it was designed much later than the 767. However, how can the United States continue to add to its trade imbalance by supporting foreign defense contractors. I don't think we have a problem with buying Rolls Royce engines or BEA Systems because the UK buys our stuff. And, we can certainly should understand why the Germans are NOT participating in the F-35 Raptor program; they lost nearly 200 pilots in accidents with the F-104 Starfighter. The Eurofighter Typhoon makes more sense for Germany. She did not cite "Aviation Week" on Boeing's radical new thinking on the tanker, but seems to think that EADS proposal was just dandy and meritorious.

I was interested in the author's take on the NUMMI plant in Fremont. She really ignored it but Toyota has never explained successfully why they abandoned the plant. Well, it's simple. Despite being a 30 year old facility requiring little new investments other than the new robots, they didn't want to deal with unions. Toyota studied the American landscape and decided it was a wonderful inducement to locate in right-to-work states in the "Race to the Bottom." Now, why should a Californian have to pay extra taxes because of the giveways made by Alabama and Kentucky. The governments subsidized Toyota and others with property tax concessions, lower payroll deductions, land grants and infrastructure improvements (eg freeway ramps), etc. and gave them automatic influence in American politics. The people in Fremont were happy with Toyota and appreciated their high salaries, but are generally disgusted with their dismissal for new plants in the South. I can imagine why workers in Flint MI wonder why GM closes factories and then builds Buicks in CHina. At least,the Japanese get it right; build certain lines in Japan (eg Scion) and ship them to the US.

The real deficiency in this book is the total exclusion of discussing transborder pricing and taxes. How does Toyota manipulate their tax bill? I think it is significant how much they do not pay the American authorities despite their substantial investment in American operations. From what I have seen, they may be freeriders and should not automatically be accorded with the notion that they are "American". They are businesses and seized on the concept of building their plants in cheap cost-of-living areas. And then they can charge the Big 3 prices for their cars and make more profit.

One final note. I don't like American cars but, unlike the bailout debate, hardly anyone ever complimented GM, Ford or Chrysler for their yeoman service to the United States. These were car companies that ratched up production of tanks and aircraft during WW2 and they paid their fair share of corporate income taxes in our post-WW2 period.

This is book is essentially incomplete. I could pick apart almost every chapter because of its globalization and anti-union bias. Again, the reader should be aware that I have opposed union actions in certain cases, such as Eastern Airlines machinists. You can't demand economic gains when the other side is broke.
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