Open thread Nov. 18, 2016 Dan Crawford | November 18, 2016 11:20 am Tags: open thread Comments (21) | Digg Facebook Twitter |
One huge industry where the US is holding its own is manufacture of airliners — namely Boeing …
… or are we? First I saw TV reports that manufacture of the body and wings were being off shored Italy and Japan.
“The final assembly for the Boeing 787 takes place at Boeings’ plant in Everett, Washington. The plant employs a mere 800 to 1,200 staff who are responsible for the final assembly of the major components of the aircraft. As with the Boeing 737, the Boeing 787 Dreamliner will have the construction of it’s major components contracted out to manufacturers around the globe.”
“Subcontracted assemblies included wing manufacture (Mitsubishi Heavy Industries, Japan, central wing box) horizontal stabilizers (Alenia Aeronautica, Italy; Korea Aerospace Industries, South Korea); fuselage sections (Global Aeronautica, Italy; Boeing, North Charleston, US; Kawasaki Heavy Industries, Japan; Spirit AeroSystems, Wichita, US; Korean Air, South Korea); passenger doors (Latécoère, France); cargo doors, access doors, and crew escape door (Saab AB, Sweden); software development (HCL Enterprise India); floor beams (TAL Manufacturing Solutions Limited, India); wiring (Labinal, France); wing-tips, flap support fairings, wheel well bulkhead, and longerons (Korean Air, South Korea); landing gear (Messier-Bugatti-Dowty, UK/France); and power distribution and management systems, air conditioning packs (Hamilton Sundstrand, Connecticut, US).”
As with everything, the economic rape of America can only end with the re-constitution of high union density. European labor unions would not tolerate this kind of de-industrialization — they would react politically. 6% unionization in private firms (which wouldn’t even be 6% if it had to start from scratch) is equivalent to 20/10 blood pressure: starving every other healthy process.
Anybody here support proselytizing union busting a felony on a state by progressive state basis — the only open path with Repub control of Congress? Do this or do nothing!
My brother is one of those who assembles Dreamliner.
Without the global supply chain, that plane would not be built.
Some sub-assemblies have been on-shored after problems with vendors, but building this only in the US would be a Herculean task just in terms of creating the needed facilities and hiring the skilled labor without terminating production on all the other things Boeing still makes.
Plus there’s the political side, just as Boeing has locations in nearly every state, it also behooves it to spread some of the wealth around to the other countries that are potential customers.
Not what the TV show said. Said Boeing’s decision to build wings in Japan for instance was purely political — in the sense that Boeing wanted to sell a lot of planes in Japan, so figured to get an edge up building part of the plane there.
Didn’t work out. Outsourcing components all over the world led to poor fitting — would match up together — led to a three year delay in the 787 availability — led to Airbus getting the Japanese sales.
Do you suppose Airbus needs to outsource to the US? To me the idea that we cannot build the parts is just plain ludicrous. Ever hear of the “arsenal of democracy”? Been able to outproduce everybody for a long time — unless all this outsourcing has drained our skills dry. ???
Denis —- you should realize that Airbus is outsourcing out of Europe for both political and technical reasons.. Some of that hopefully leads to increased sales in their opinion. You should also realize that some of that outsourcing is also currently going to the USA.
For Social Security wonks…
CBO has a new report that compares its projections to that of the SSA Trustees:
Yea, a report by the “new” CBO Char which makes Elmendorf look like a sweet heart.
I know that as a general rule Germany, especially, tries to outsource its lower tech manufacturing and hang on to its core high tech.
Germany — or should I say Germans — also work at the factory floor level to increase its workers’ productivity as an ongoing process. That is why they can pay their auto workers $60 an hour.
Germany has 16% college (even though it’s free) but trains and retrains its employees where it counts, at the market level. Germany, of course, has the deepest labor union structure in the world.
Americans have to figure out that without labor unions we really do not have democracy. Maybe when the blue collar figure out that Donald isn’t going to help, maybe then they and everybody else will learn that they have to take care of matters economic themselves — then maybe they and everybody else will realize they have to rebuild union density.
Couldn’t be simpler: make union busting a felony beginning at the progressive state level. Will somebody here tell me either tell me that cannot be done — or alternately that they are ready to push it.
Even if it were so that states could not add to federal organizing protection like they can add to the federal minimum wage — under an over strict view of federal preemption — the current federal setup is the equivalent of the fed telling states that their citizens have only one road to take to EXERCISE THEIR RECOGNIZED FIRST AMENDMENT RIGHT to collectively bargain — EVEN THOUGH THAT ROAD IS PERMANENTLY BLOCKED (an inherently adversarial process with all the power on one side).
I say the federal government cannot preempt something with nothing — not under the First Amendment.
Whenever SS funding comes up I always say where is the — next — trust fund?
Presumably the generations who overpaid FICA to buy fed bonds to cash in their old age — expect to cash out those bonds — you know use up the trust fund.
I propose (ha, ha) setting up another trust fund for follow up generations — by hiking the FICA so the income exceeds outgo and (here is the part of the puzzle I have been missing) AND LOWERING INCOME TAXES a corresponding amount — assuming that this kind of setup ever made sense in the first place.
Legit reason for trust fund: an automatic source of SS payout when FICA fall short — giving Congress time to catch up FICA income with outgo. This function is fulfilled in current law by defining solvency as one year of full payout (not just shortfall) available in trust fund bonds.
The issue here and what BK will not tell you, is the Repubs and Wall Street do not want to pay back what was “loaned” to the GF in lieu of tax increases to fund Congressional spending on Defense and other non-Domestic expenditures.
I realize this is a company site but it will give you some idea of the extent of Airbus manufacture in the USA, Denis.
Secondly I’m very supportive of unions …. even more supportive of worker owned companies.
As the old Midwestern saying goes: “Well, shut my mouth.”
OTH, Germany — er, Germans — can afford to let some of their auto manufacturing for instance go, seeing as their line workers earn so much and are fully employed, building twice as many motor vehicles per capita (strange: believe we make something like 4 million trucks a year and they almost none).
Ditto maybe for Boeing going overseas. Americans cannot really afford to see those jobs go. Enough union density could get that under control. Not to mention pay people better in South Carolina.
Run – The Republicans, (and much less Wall Street) can’t alter the way the SSTF bonds will be “paid back”. The bonds in the TF are legally redeemable to meet current/future befits. This is a “Full Faith and Credit” obligation of the USA. There is no choice but they will be redeemed in full.
The only question is when will the last bond be redeemed. The CBO says it will be in 2029; SSA is more optimistic and thinks the TF dries up in 2034.
Which is why you are bringing this up. There is nothing needing to be done till the year of the shortfall. Then Congress has to decide, decide whether to let benefits be cut automatically or increase taxes for SS. It does not matter when the last bond is redeemed except in the minds of those who wish it to end. There was never meant to be 30 years of SS Trust Fund. The TF was designed by the Greenspan Commission to supplement GF requirements which it has done a good job of doing. In the meantime Corporate taxes have decreased.
You recite what Bruce (hospitalized) and what Coberly have said and taught you.
Run, I wondered what happened to Bruce. I hope he is OK.
Bruce is not exactly o.k., but I don’t think his life is in immediate danger.
Thanks for asking.
you forgot to lead your comment with “Bomshell!”
The five year difference between CBO and SSA projections is not materially significant.
Social Security can be financed FOREVER with a one tenth of one percent increase in the payroll tax whenever the Trustees project that the Trust Fund will (may) fall below 100% on one full year’s cost within ten years. That amounts to a dollar per week in any year such a projection is made.
Current long term projections suggest that the total increase will not exceed 2% over the next 75 years. Even an immediate 2% increase would not be a burden to workers. This is the probable cost of their future retirement… that is it is money they will get back, with interest, when they need it most. It is also projected that the workers incomes will increase over 100% during that same time… meaning that at the end of the day they will have twice as much money in their pockets AFTER paying the tax, plus they will have paid for their own retirement which is expected to last longer (they will live longer) at a higher standard of living than today’s retirees.
you are right in spirit but wrong on the details. with the one tenth of one percent increase in FICA, the Trust Fund won’t go anywhere. In fact it will increase enough to maintain the required reserve without even redeeming the existing principle.
SS was made separate from general taxes (income tax) for a good reason… so that “the rich” could not complain they were paying for the workers retirement (as welfare). This is something the current “left” can’t seem to understand. Keeping SS solvent will have no effect on income taxes whatsoever…. unless the liars on both sides are allowed to “fix” SS one way or the other.
All that is necessary is that workers keep paying what they will need to be able to retire at a reasonable age. That amount will not be noticeably higher than what they are already paying. And it will be very noticeable to them if they don’t pay it, and expect some magic “fix” to save them from having to pay anything at all.
it is a little confusing if you say that Krasting is reciting what I and Bruce have taught him.
Krasting has learned nothing from us.
possibly the TF could be allowed to run out in the year 2030 or so (the exact year does not matter), but then the “fix” would be an immediate 2% increase in the payroll tax. This would not be a hardship, but it would be a political disaster. The bad guys would call it “too much” and pretend that the next year would require another 2% or that the workers would never get the money back. Or whatever “sky is falling” rhetoric they think would fool the people. And they would fool the people. Meanwhile the dollar a week starting in 2018 (or as late as about 2023) would solve the problem at a price (rate) that no one would notice. Except Krasting.
I believe the Greenspan commission, and the Congress, voted for the tax increase that led to the higher than normal TF in order to allow the Baby Boomers to pay for their own retirement as opposed to letting the after the boomers face a sudden increase in FICA. This really had nothing to do with the General Fund. Though the tax increase then was not high enough… it could have been phased in… to provide for the expected (even then) increase in life expectancies that would create the projected shortfall we are seeing now. This was shortsighted, but maybe they expected that thirty years later people would be smarter.
the one tenth percent, and ultimate 2%, FICA increase is “each” the worker and the employer.
those who insist that the employer share is “really” the workers money need to remember that if that is true, then the workers pay is actually 6% higher today than they see in their paycheck, and will be 8% higher by the time the 2% increase is fully phased in.
So it makes no difference to the worker. If it’s his money, it’s coming out of a pool of “his” money that he never sees, and never would see without Social Security collecting it for him, saving it for him, paying interest on it, and returning it to him with that interest plus an insurance payout if after a lifetime of poorly paid work he needs something extra to by groceries in his retirement.
You have to watch out for the weasel words in the “arguments” from the people who hate social security, and hate workers. They are counting on you not being any smarter than Krasting.
but, i plead here, it is going to be up to us… someone?… to tell the people. otherwise the government, in the hands of the hard right, is going to take their ability to retire away from them. unless, of course, they get lucky on the stock market.
I hope Webb gets well soon.
I was writing about what year the SSTF would dry up well before I first crossed swords with Webb and Coberly. That was in 2009.
That’s not to say I have not learned a thing or two from Webb. I’ve found Coberly to be be too stubborn.
you have been writing about the Death Date of Social Security for a long time. That’s because you think it’s important. I have shown that it is not important.
I can afford to be stubborn because I know the right answer.
increase the payroll tax one tenth of one percent per year until income matches outgo. that’s about a dollar per week per year, while wages will be going up over ten dollars per week every year.
if you do that the Trust Fund will NEVER run out. in fact it will never fall below 100% of a full year’s costs.
this has been demonstrated by other people besides me, and even the Committee for a Responsible Federal Budget knows it’s true.
and i wouldn’t call it “crossing swords.” more like the kid in the back of the class who can’t understand the lesson but keeps shouting “we are all going to die!”.
how’s the bombshell doing?