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LOUISVILLE /JEFFERSON COUNTY
DEMOCRATIC PARTY NEWSLETTER
Week of September 12, 2008
The link to this electronic newsletter is being e-mailed to 6,500+
Jefferson County Democrats
We hope you will forward the link to your own e-mail list.
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CLICK HERE FOR CURRENT LIST OF EVENTS
Updated on a regular basis
Bulletin Board:
- The Louisville/Jefferson County Democratic Executive Committee meets the 4th Wednesday of every month at 5:00 pm at Democratic Headquarters,
- 640 Barret Avenue .
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The dramatic worsening of the nation’s unemployment rate from 5.7 percent in July to 6.1 percent in August isn’t the only recent economic indicator starkly contradicting John McCain’s repeated statements that the “fundamentals of the economy are strong.”
Take a look at this data.
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With
millions of America’s workers out of a job, unemployment
rose among almost all demographic groups, hurting women the worst.
Black women saw their unemployment rate worsen by 1.6 percentage points to
9.1 percent. The unemployment rate for African Americans overall rose to
10.6 percent and that of Hispanics to 8 percent.
- More than 1.4 million of America’s workers are employed in part-time positions for economic reasons, not by choice.
- An additional 109,000 individuals hold multiple jobs.
- Incomes are declining across the board—unless you’re extremely wealthy or work in a professional job, like doctor or lawyer.
- Every other group, including those with college and doctorate degrees, saw income declines. The inflation-adjusted median salary for a person with a bachelor’s degree fell about 3 percent, adjusted for inflation, to $47,240 last year from 2000. Median master’s-degree salaries fell about 4 percent, to $56,707. Salaries for high school graduates fell about 3 percent to $28,290. As the Wall Street Journal puts it:
The recent data are the latest reminder of how college degrees, long seen as a path to the middle class, no longer guarantee fatter paychecks every year.
- One in three homeowners who purchased homes since 2003 now owe more than what the property is worth, according to Zillow.com, an Internet service that values more than 80 million homes. The numbers are even more dismal for those who bought in 2006, with 45 percent now experiencing negative home equity.
- Inflation-adjusted median household income has declined by $1,175 since 2000. Meanwhile, prices for many goods are rising rapidly, according to Elizabeth Warren, a Leo Gottlieb professor of law at Harvard Law School. Testifying before a Senate committee recently, Warren put it this way:
Seven years of flat or declining wages, seven years of increasing costs and seven year of mounting debts have placed unprecedented stress on the ordinary families. By every critical financial measure, these families are losing ground. Without changes in critical economic policies, the strong middle class that has been the backbone of the American economy and the American democracy is in jeopardy.
With seven years of failed economic policies under the Bush administration resulting in the nation’s current disaster, no wonder McCain—whose economic proposals would replicate those of Bush—prefers talking about lipstick.
- Hannity explodes on air, calls guest ‘fool’ and ‘idiot,’ tells him to get off set.
Yesterday on Fox News, Sean Hannity and The American Prospect’s Robert Kuttner had a tense exchange about the election. As Kuttner offered advice for Sen. Barack Obama (D-IL), Hannity interrupted, saying Obama is “hiding” his associations with Bill Ayers and Jeremiah Wright. “Stop it. Stop it. This is — this is garbage you’re spewing,” Hannity said. Kuttner shot back, accusing Hannity of “doing RNC talking points”:
HANNITY: You spew this line, DNC talking points.
KUTTNER: I don’t spew any goddamn line. Stop insulting me or I’m walking off the set.
HANNITY: Go ahead. Go. Good-bye. Walk off. … Please. I don’t care. Go right ahead. Walk off. You said the economy is in dire straits.
KUTTNER: It is in dire straits. You want to deny that, you fool?
HANNITY: You fool, you idiot.
KUTTNER: You’re going to deny that the economy is in dire straits?
HANNITY: For the first time — sir, sir, unemployment in this country…
Hannity said that claiming the U.S. has seen a “dire” economy is “all based on a lie.” “We got out of the recession that Clinton and Gore gave us,” he said. In fact, job growth in the eight years before Bush came to office was significantly better than in the eight years since.
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Obama’s Tax Plan Better for Working Families Than McCain’s by Seth Michaels
As the Republican Convention continued Tuesday night, former Sen. Fred Thompson (R-Tenn.) brought out a tired old talking point in his speech, one that Sen. John McCain and his allies have been pushing all year and that corporate interests have been trying to sell for decades. It’s the old “tax hike” scare.
Thompson and McCain are flat-out wrong when they allege Sen. Barack Obama’s proposed economic plan would raise taxes on millions of working families. In reality, his plan would give tax cuts to nearly all working families.
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Source: The Washington Post |
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The Tax Policy Center has done intensive analysis of the two candidates’ tax proposals and their public statements and found that the majority of taxpayers would see more relief from Obama’s plan than McCain’s. The Washington Post has created a chart that explains exactly what each candidate’s tax plans would mean for different income levels, and the analysis points to stark differences.
Obama’s plan gives the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy.
There’s even a website, ObamaTaxCut.com, where you can calculate the estimated tax cut Obama’s plan would give you—and compare it to what you would see under McCain’s plan.
Obama’s plan gives tax cuts to 95 percent of working families. The overwhelming majority of taxpayers would see a bigger tax cut under Obama’s plan than McCain’s. As The Washington Post chart shows, 60 percent of taxpayers would get a tax cut three times as big from Obama as from McCain. That’s real money in the pockets of hardworking families.
Meanwhile, McCain’s economic proposals are mostly built around expanding on Bush’s giveaways to the very rich and to corporations. As we’ve reported, economists are struck not only by the massive scale of the tax cuts and the incredible imbalance, but by the sharp reversal these plans represent from McCain’s positions just a few years ago. Rather than being a “maverick,” as his allies in Washington and the press love to call him, McCain, who initially opposed Bush’s tax cuts for the rich but now wants to make them permanent, has steered hard toward the Bush economic agenda.
CQ’s Politifact calls McCain’s position on taxes a “full flop,” and The Washington Post reported that McCain has moved sharply toward Bush and his party on the issue.
Now that he is the presumptive Republican presidential nominee, however, McCain is marching straight down the party line. The economic package he has laid out embraces many of the tax policies he once decried: extending Bush’s tax cuts he voted against, offering investment tax breaks he once believed would have little economic benefit and granting the long-held wishes of tax lobbyists he has often mocked.
In 2004, McCain opposed tax giveaways during Bush’s first term because they went “disproportionately to the wealthiest Americans.” He repeatedly described his stance as a matter of conscience and fiscal responsibility. Apparently, presidential candidate McCain feels differently.
Who benefits from McCain’s tax agenda? The same people who have done so well under the Bush economy. The top five Big Oil companies would get nearly $4 billion. The top 10 insurance companies would get nearly $2 billion. And the millionaire McCain family would get a tax cut of more than $300,000.
Meanwhile, Factcheck.org has analyzed numerous McCain ads on the issue of taxes, and guess what it’s found?
McCain’s campaign is engaging in a “pattern of deceit” when it comes to describing Obama’s tax plan.
Factcheck.org says McCain’s ads on taxes are propagating a bundle of “false and misleading claims about Obama’s tax proposals,” while Politifact.com has analyzed multiple McCain ads on taxes and rated them “Barely True” or “False.” Obama economic adviser Brain Deese has released a video cutting through the false claims of a McCain ad.
The bottom line? Despite the claims of these attack ads, a sizable majority of America’s working families won’t see their taxes go up under Obama. They’d see them go down, and by more than they would under McCain.
Scratch below the surface of McCain’s policy proposals, and you’ll find these false tax claims are even more cynical and misleading than they seem at first. McCain’s health care proposals have their own tax consequences—in short, the McCain health care plan could actually raise taxes on millions of America’s working families by taxing their employer-provided health benefits.
Joe Klein of Time noted that “even the slightest wisp of substance” was missing from last night’s Republican Convention speeches, and The New Republic’s Jonathan Cohn said that the convention seems to be:
…all about who McCain is rather than what McCain would actually do in office. And I suspect that’s largely because McCain’s agenda just isn’t very popular. Remember, this is a candidate that has committed himself to an economic policy that would tilt the tax code more to the rich, a health care policy that would expose the sick to larger medical bills…. Polls have consistently shown that most voters disagree with these positions.
Maybe that’s why McCain’s campaign manager Rick Davis is trying so hard to convince the press and the public that “this campaign isn’t about issues.” If it’s an argument about the facts, about working people’s lives and the policies we need to help them prosper, McCain isn’t offering anything new.
Comments:
Most blatant hypocrisy on Palin: A tie between Karl Rove, Bill O'Reilly, and Dick Morris, as evidenced in this must-see Daily Show segment
Best jab at Palin by fellow conservatives:
Pundits Peggy Noonan and Mike Murphy, who were caught on a hot mic on
MSNBC calling the Palin pick
"gimmicky," "cynical" and pure "political bulls**t"
DAILY GRILL
"She's only, she's only been a governor for one year? That, that will not
work [as experience for Vice President]." -- MSNBC's Joe Scarborough on Gov.
Sarah Palin (R-AK),
8/29/08
VERSUS
"How can Barack Obama's campaign criticize an inexperienced number two on
the Republican side when Democrats have picked...the most inexperienced
person to run for President?" -- Scarborough,
9/03/08
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"During their convention, the Democrats rarely mentioned the attacks of
September 11." -- Former New York City mayor Rudy Giuliani,
9/03/08
VERSUS
Democratic Convention speakers mentioned Sept. 11 four times per 25,000
words spoken; RNC speakers mentioned Sept. 11 two times per 25,000 words
spoken. -- New York Times,
9/05/08
Quotes of the Day
Quotes about Palin
"She does know about international relations because she is right up there
in Alaska, right next door to Russia." –FOX News Channel's Steve Doocy,
gushing over Palin's qualifications, to which Jon Stewart quipped, "When you
think about it, Alaska is also near the North Pole, so she must also be
friends with Santa."
"I'm not sure what she brings to the ticket other than she's a woman and a
conservative." –Sarah Palin's mother-in-law, Faye Palin, who said she
may vote for Obama
"She's old enough. She's a U.S. citizen." --John Harris, Alaska's Republican
speaker of the house, when asked about
Palin's qualifications for vice president
Sarah Palin in Her Own Words
"As for that VP talk all the time, I'll tell you, I still can't answer that
question until somebody answers for me what is it exactly that the VP does
every day?" --Sarah Palin, in an
interview with CNBC's "Kudlow & Co."
"I've been so focused on state government, I haven't really focused much on
the war in Iraq." --Palin
"It's great to see another part of the country." --Palin, campaigning in
Pennsylvania
Recent Senate Votes
Senate is in recess
Recent House Votes
House is in recess
HUMOR
"Governor
Sarah Palin gave her speech tonight at the GOP Convention, and it gave
people who didn't know anything about her the chance to finally meet her,
you know, like
John McCain." --Jay Leno
"Delegates were captivated by Palin's speech; at one point while she was
speaking, the room got so quiet, you could hear
Larry Craig's toilet flush." --David Letterman
"Earlier tonight, John McCain had his big acceptance speech.
And, you know, I didn’t – I didn't watch that because I'll tell you why: if
I want to see an old guy, if I want to see an old guy struggle with a
teleprompter, you know, hell, I'll watch Regis." --David Letterman
"In her speech last night, Sarah Palin mocked Obama…for giving speeches in
front of adoring crowds and standing in front of a stage backdrop.
Ironically, Palin did so in front of an adoring crowd standing in front of a
stage backdrop." --Jay Leno
"I gotta admit, she looked very comfortable at the podium
'cause it's kinda like Alaska: you look out on that convention floor,
nothing but white as far as the eye can see." --Jay Leno
"I don't know if you noticed this, but at the GOP convention, the cameramen
are desperately trying to find minorities in the audience they could zoom in
on, 'cause this is what they do. Finally, after an hour, they found one. It
was a Presbyterian standing in a group of Methodists." --Jay Leno
"They're
selling
Sarah Palin action figures online. I don't know where they get the
outfits for these, but she looks like the sluttiest librarian of all time.
Sad incident at Toys 'R' Us today -- a Sarah Palin doll shot My Little
Pony." --Jimmy Kimmel
"Because of
Sarah Palin, people are now asking the question: Is she ready to be
president? If, God forbid, something happens to
John McCain, is Sarah Palin ready to be president? I don't think we need
to worry about that, because
Bush has
lowered the bar so tremendously." --David Letterman
"Federal investigators said that members of the Bush administration who were
in charge of overseeing billions of dollars in oil royalties received gifts
and had illicit sex with oil company employees. They actually had sex with
oil company employees. You know, when the Republicans said
'drill everywhere,' I had no idea." –Jay Leno
"The campaign is coming down to one very important issue: putting
makeup on farm animals. That seems to be where we're at. Oh, this is so
stupid. Did you hear about this? Yesterday,
Barack Obama attacked
John McCain's policies, implying it's more of the same by saying ... you
can put lipstick on a pig, but it's still a pig. To which
Bill Clinton said, 'You know, I've tried that, and you're right. … Well,
now McCain is demanding an apology. Do you believe that? Two senators
arguing over lipstick, and neither one of them is
Larry Craig." --Jay Leno
"Of course, now everyone's digging into Sarah Palin's past. There's an old
picture of Sarah Palin circulating on the internet right now, and she's
wearing a t-shirt that says,
'I may be broke, but I'm not flat-busted.' Yeah, John McCain was upset
when he heard this and asked, 'What's the internet?'" --Conan O'Brien
"The Wall Street Journal said today Democrats are sending an army of lawyers
and investigators up to Alaska to look into the background of Sarah Palin.
And of course, John McCain is furious. He said, 'Hey, if I didn't look into
her background, there's no reason you should be looking into her
background.'" --Jay Leno
"Experts say -- this is interesting -- that since Sarah Palin became the
vice presidential nominee, there's been an actual spike in the sales of her
style of eyeglasses. Gone way up. Yeah. Yeah, with Palin's glasses, you'll
be able to see everything, except what the hell your teenage daughter's up
to." --Conan O'Brien
"Barack Obama is going to have lunch with Bill Clinton this week to discuss
Democratic strategy. They're going to get together and talk. You know, they
haven't been that friendly up to this point. Of course, it's tough agreeing
on a restaurant, because the two men are both so different. Finally, they
settled on a 'Hooters' that serves arugula." --Jay Leno
"Well, it's a very strange political campaign. I mean, out on the campaign
trail, John McCain and Sarah Palin are talking about how they stood up to
the Republican party. They fought the Republican establishment. And they
battled Republicans. Their message: vote Republican." --Jay Leno
"Dick
Cheney told reporters this week, there's no reason why Sarah Palin
cannot be a successful vice president in the McCain administration. In fact,
not only can she shoot a lawyer in the face, she can
field dress him as well." --Jay Leno
"I kind of like that Sarah Palin. You know, she reminds me, she looks like
the flight attendant who won't give you a second can of Pepsi. No, you've
had enough. We're landing. Looks like the waitress at the coffee shop who
draws a little smiley face on your check. Have a nice day." --David
Letterman (Read more of
Letterman's jabs at Palin)
"And the big guns are out. The Democrats have sent Hillary to Florida to go
after Sarah Palin. So, that makes two Clintons trying to nail her now."
--Jay Leno
"Oprah Winfrey's in the middle of a big scandal, because she is refusing to
have Republican vice presidential candidate Sarah Palin on her show. The
friction started because Palin said if she's elected, she'll be the most
powerful woman in the country. And Oprah said, 'The hell you will!'" --Conan
O'Brien
"McCain was introduced at the convention last night by his wife -- I won't
say 'trophy wife' -- but she did $300,000 worth of clothes and jewelry on,
no matter to the party of the little guy. But Cindy McCain talked about how
his character, honor and integrity made him the exact kind of married man
she was looking to pick up at a bar." --Bill Maher
"Bush
didn't make the convention because the hurricane, Gustav, hit New Orleans,
but actually didn't. Bush was at the Hurricane Command Center, taking credit
for a perfect emergency response to a perfect non-emergency. Although he
actually did cause some panic, because viewers at home saw him sitting
there, doing nothing, and they thought maybe it was another terrorist
attack." --Bill Maher
RADICAL RIGHT -- GINGRICH CLAIMS U.S. HAS
MORE OIL AND GAS SUPPLIES THAN VENEZUELA OR SAUDI ARABIA: During an
appearance on the
Tavis Smiley show earlier this week, former House speaker Newt Gingrich
-- stumping for his "Drill Here, Drill Now, Pay Less" campaign funded by
right-wing billionaires to sell the Big Oil agenda -- claimed that "if
you used America's energy resources and you didn't have to
buy oil from Venezuela or Saudi Arabia it'd be a lot less expensive."
Yet what Gingrich didn't mention is that the United States has
only 2 percent of the world's oil and gas reserves but uses 24 percent
of production. This isn't the first time Gingrich has showed his ignorance
on energy issues. He has previously said that inflating car tires properly
in order to save energy is "loony
tunes" even though both the Department of Energy and the auto industry
advocate such practices. A few days later he made the astonishing claim that
inflating your tires
somehow enriches Big Oil's profits.
ETHICS -- HISTORIANS CALL ON CONGRESS TO STOP BUSH/CHENEY FROM DESTROYING DOCUMENTS: The Center for American Progress Action Fund (CAPAF) has partnered with the three leading associations of U.S. historians -- the American Historical Association, the Organization of American Historians, and the National Coalition for History -- to send letters urging Congress to strengthen the Presidential Records Act of 1978 (PRA), which requires the preservation of all presidential records. Mark Agrast, a Senior Fellow at CAPAF who led the effort, told The Progress Report, "After learning of the loss or destruction of millions of White House e-mails, we asked 30 of America's most eminent historians to join us in urging Congress to put real teeth behind the PRA." Agrast explained the need for action saying, "The PRA cannot do its job if presidents are free to ignore it, and the preservation of the historical record is too important to be left to the sole discretion of this or any future White House." Separately, the Citizens for Responsibility and Ethics in Washington is "asking a federal judge to declare that Vice President Cheney's records are covered by the Presidential Records Act of 1978 and cannot be destroyed, taken or withheld without proper review," the Washington Post reports. Their goal is to preserve records that "could be hidden from the public if Cheney adheres to his view that he is not part of the executive branch." View CAPAF's letters to House and Senate leaders here and here.
RELIGION -- RIGHT-WING ALLIANCE DEFENSE
FUND SEEKS TO PUT OVERT POLITICS IN CHURCHES: The conservative group
Alliance Defense Fund (ADF) is recruiting several dozen pastors to publicly
endorse political candidates from their pulpits on Sept. 28, "in
defiance of Internal Revenue Service rules," the Washington Post reports.
The effort is "designed to trigger an IRS investigation that ADF layers
would then challenge in federal court," with the aim of persuading the
Supreme Court "to throw out a 54-year-old ban on political endorsements by
tax-exempt houses of worship." Three dozen church leaders have already
agreed to participate, promising to "make a specific recommendation from the
pulpit about how the congregation would vote," according to an ADF attorney.
In 2004, Americans United for the Separation of Church and State asked the
IRS to investigate statements by Bishop Michael Sheridan, who sent a letter
to church members "insisting
that they not vote for candidates who support legal abortion, stem-cell
research or euthanasia." Another group of bishops that year, "alarmed
at the prospect of a President Kerry," blanketed churches "with guides
identifying abortion, gay marriage, and the stem cell debate as among a
handful of 'non-negotiable issues.'" Archbishop Charles Chaput declared
voting for Kerry would have been tantamount to "cooperating in evil."
Think Fast
Disgraced lobbyist Jack Abramoff, "who pleaded guilty to a scheme to corrupt Congress, asked a federal judge for mercy on Wednesday, saying he was 'not a bad man' although he acknowledged he 'did many bad things.'"
A 4,500-year-old ice shelf "nearly the size of Manhattan" that has "broken away from Ellesmere Island in Canada's northern Arctic" is the latest sign that "warmer temperatures are changing the polar frontier."
MSNBC is removing Keith Olbermann and Chris Matthews as the anchors of live political events, "bowing to growing criticism that they are too opinionated to be seen as neutral." David Gregory will take over the anchor seat for events such as this fall's presidential and vice presidential debates and election night.
INTERESTING
Buy American Mention of the Week
Why General Motors and Ford Should Not Be Allowed to Fail, By Roger Simmermaker
I’ve been asked to do many interviews recently on Fox News when automotive issues top the current events for the day and a guest is needed to defend the American automobile industry. But my most recent interview on August 1, 2008, had me defending General Motors against the misguided opinions of an economist that was calling for the outright failure and bankruptcy of GM while claiming such a national calamity would actually be in the best interest of America.
Here’s why GM and Ford in particular deserve the support of the American car-buying public, and why the failure of either one or both would cause severe damage to our economy.
Reason #1: You simply cannot take billions of dollars out of the U.S. economy without there being a negative fallout that will affect every American. General Motors and Ford top the list in terms of spending on research & development in America, spending over $12 billion annually. In third place is Microsoft. Last year, GM spent $4.75 billion supporting their retirees and $2.1 billion in advertising (fourth highest in the U.S.)
Gannett Co., publisher of the USA Today and other major newspapers, just announced on August 14, 2008, it was eliminating 1,000 jobs, partly due to falling ad revenue, reinforcing the notion that if the revenue pockets at GM dry up, so do other pockets of the economy.
Reason #2: GM and Ford combined have nearly 100 major plants in the United States. Toyota, Honda and Nissan each have eight. Ford and GM both get at least 80 percent of their parts from American factories, while Toyota, Honda, and Nissan get only 45-55 percent of their parts from here. German-owned Volkswagen, which gets only three percent of their parts from America, just agreed to build their first U.S. plant only after getting a record-setting $500 million in tax giveaways, courtesy of your tax dollars, to employ 2,000 people.
Tennessee already enticed Nissan with a tax-incentive package in 2005 to move their North American headquarters there from Los Angeles, but state officials wouldn’t specify how much tax breaks would cost. And what is Nissan doing now? As of July 31, 2008, per the Wall Street Journal, they’re cutting 1,200 jobs through worker buyout offers, after cutting 300 factory jobs in 2007. Tennessee shouldn’t put a lot of faith in keeping promised jobs at their new VW plant, either. In 1989, Volkswagen shuttered its plant in Pennsylvania and has imported 100 percent of its vehicles ever since.
Maybe all these tax-giveaways to foreign companies are why the Government Accountability Office recently found 72 percent of foreign-owned corporations operating in the U.S. paid no taxes for at least one year from 1988 to 2005. According to the IRS, American-owned companies pay nearly twice as many taxes as foreign-owned companies.
Tennessee’s tax giveaway amounts to $250,000 per job and is a huge sum of tax dollars that could have gone to shore up the 25 percent of America’s bridges that are labeled either structurally deficient or functionally obsolete. And speaking of taxes, GM and Ford have paid more of them to the U.S. Treasury for America’s benefit than any foreign company ever dreamed of paying. Few people realize that companies like GM and Ford created the market that foreign automakers are infiltrating now. Had it not been for the better-than-average wages paid by American automakers, not to mention the millions of people that receive pension benefits and health care courtesy of Ford and GM, there would be no market for foreign automakers to tap into.
Reason #3: Many economists believe that a GM bankruptcy would roil the markets, which is especially unattractive as they struggle to stay out of bear territory. According to a July 2, 2008, Wall Street Journal article, GM has already saved the Dow Jones from a bear market at least once already this year. And according to a May 9, 2005, Business Week article, the 54-day strike at GM in 1998 cut the economic growth of the entire country by a full percentage point for that quarter. The article continues by saying that it is “undeniable” that what is bad for GM is bad for America, citing that GM either directly or indirectly supports the employment of 900,000 Americans.
The anti-American car crowd continually points to Toyota as the shining example of what a car company should be like. They also seem to believe that GM apparently made a “mistake” over the last two decades by simply responding to supply and demand and focusing on trucks and SUVs. America fell in love with the SUV back in the 1980s when Ford practically invented it with its Explorer. From 1987 to 2007, the average vehicle gained almost 900 pounds, almost doubled in horsepower and was 8 percent less fuel efficient. Americans drove over twice as many miles in 2006 compared to 1975. According to a Business Week survey, we bought 10 percent more gasoline in the first six months of 2006 than the first six months of 2000 even though gas prices rose 75 percent in that period.
But it wasn’t just American companies making automobiles that were growing bigger and guzzling more gas. The 2006 Lexus 470 SUV, for example, boasted of an increase of 40 horsepower and 12 ft. lbs of torque compared to the 2005 model. Toyota’s Tundra and Sequoia, Nissan’s Titan and Armada, and Honda’s Ridgeline make it impossible to deny the entry of foreign automakers into the profitable big truck and SUV market. American trucks and SUVs usually get the better gas mileage, too. Chevy’s Tahoe gets better mileage than Toyota’s Sequoia, and Chevy’s Silverado and Ford’s Ranger get the best mileage in their segments.
Should GM and Ford have turned their back on consumer demand considering it resulted in higher profits? Of course not. General Motors has the number one market share in the world and in the U.S. precisely because they’ve been making what consumers want to buy. How else does one garner the number one market share? And they have the second-highest market share (behind Volkswagen) in China (the world’s second-largest car market behind the U.S.) because China prefers big luxury cars and SUVs. In China, where hybrids like the Prius don’t sell well, the top selling automobile is a Buick minivan.
But General Motors doesn’t just produce in China to sell to that market. According to a June 18, 2008, Wall Street Journal article, GM will export $1 billion worth of vehicles, machinery, component kits, and other equipment to China between now and 2010.
Everything that American automakers are dealing with is also being dealt with in the foreign car company camps in one degree or another, so it’s unfair to single out GM or Ford for their struggles in adapting to fast-moving marketplace changes. Toyota made an ill-timed push into the big truck and SUV market earlier in this decade considering the recent onset of high gas prices, and now has too much manufacturing capacity in North America. Beginning in 2009, Toyota will no longer make the Sequoia SUV and Tundra in Princeton, Indiana, but will instead consolidate production to the San Antonio, Texas plant. According to a July 28, 2008, Wall Street Journal article, the Big Three and Toyota all placed bets on trucks. And yes, the domestic sales for GM and Ford are falling. But domestic sales for Japanese automakers hit a 25-year low in June, according to Business Week.
All automakers are idling some plants and ramping up or adding shift to others. GM plans to close two American truck/SUV plants, but recently announced a $350 million investment in Lordstown, Ohio, for its next generation of small cars. The Chevrolet Volt will also be made in the U.S. for the 2010 model year. On July 25, 2008, GM dedicated a new state-of-the-art 450,000 square foot, $463 million Powertrain Engineering Development Center in Pontiac, Michigan that will employ 1,200 workers.
A Wall Street Journal article on August 22, 2008, pointed out GM currently generates little, if any, profit selling passenger cars in North America, but they continued to stay here to employ and support Americans anyway. Yet Japanese companies are cutting production here and ramping up back home. According to Honda president Takeo Fukai, “The time has come for our Japan operations to once again take the initiative.”
Business Week detailed in its June 9, 2008, issue that all the major Japanese automakers are either investing in existing plants at home or building brand new ones. Honda is pouring $1.5 billion worth of investment into a plant near Tokyo. Toyota is building a new car plant near Tokyo. Nissan is expanding another Japanese factory by 22 percent.
GM alone has 17 models that get 30 mpg or more, and they’re considering bringing the 40 mpg Chevrolet Beat mini car – a vehicle now sold overseas – to the U.S. Ford spokesman Jay Ward told the Wall Street Journal on July 5, 2008, that Ford has “small cars on the shelf all around the world.” Bill Ford recently told Business Week that his company is bringing over successful, profitable, award-winning, fuel efficient and well-appointed smaller cars from Europe, mentioning that they don’t have to “create these products from scratch.”
What about quality? The Chevrolet Malibu won the 2008 J.D. Power Initial Quality Award, the Mercury Milan won it for 2007 and the Buick Century won the 2008 Vehicle Dependability Study. Ford’s quality ratings now approach those of Toyota, saving Ford $1 billion in warranty costs in 2007. And according to the Consumer Reports' 2007 Annual Car Reliability Survey, 93 percent of Ford, Lincoln, and Mercury models scored average or better, while the redesigned Camry and Tundra both scored below average.
At Edmunds.com, it’s clear that American consumers are finally taking notice of American quality where a list of consumers’ top rated picks for 2008 reveals the Saturn Astra, Buick Enclave, Lincoln MKX, and Chevrolet Avalanche all won first place in their respective classes. The top consumer hybrid pick according to Edmunds.com is the Mercury Mariner SUV, not the Toyota Prius. The sales success, however, of Toyota’s Prius may be at least partly due to their patent infringement on drive trains used on hybrid electric vehicles. The U.S. Supreme Court upheld a $4.3 million ruling against Toyota back in 2005 for using patented designs equivalent to those of Paice LLC, of Bonita Springs, Florida.
But I don’t have to look at quality awards to know American cars are deserving of American consumer dollars. My 1996 Michigan-made Lincoln Town Car has over 228,000 miles and shows no signs of letting up, averaging 23 mpg. Not bad for a big American “gas-guzzler.”
If you’re looking for the least expensive car to own, look no further than the Chevy Aveo. According to Edmun