Staggering blow: Delphi's bankruptcy ominous sign

GM to cut 25000 jobs

I remember that you said something along the lines that the workers enjoyed an overly rich health care package and benefits. Do you know how much the workers were paying in dues to create it?

Well, they had a pretty good union I guess, but now the liabilities are, at least in part, putting the company on the brink of bankruptcy.

GM's balance sheet. $81 billion in accrued and other expenses, mainly healthcare. Pensions, $40 billion. Shareholders equity, $25 billion.

The whole thing makes a case for protectionism.

"Free Trade" really isn't, and all the free trade in the world isn't worth a bucket of warm spit if you lose your job to some guy in Thailand who makes $.75 an hour.

This is happening industry wide from Northwest and Delta airlines to the auto industry. The hallmarks of American standard of living are under assault. This will have to have an effect on the standard of living upon the entire US and the world economy. Something will have to give as more is shipped overseas. If blue collar Americans don't make a stand soon there will soon be nothing left to stand for.

Speaking of blue collar, nice avatar Bart it suits you.

Avro, my man, I look forward to you arguing why the softwood tariffs are a good thing. After all, the reason why America has them is for protectionism.

HO-HA! Y'all are about to get an Internet, beat-down Avro. You's in my house now!

Scape

Wages have been rising despite manufacturing falling. That's the whole point. People can afford to shop at Wal-Mart.

Besides, there is nothing magical about manufacturing. During the transition from the agarian economy to the industrial one 200 years ago, people lamented the loss of jobs on the farm to the "demon factories", and that people would starve because there would be less food harvested. Now today, people think that because service jobs are replacing manufacturing jobs, the economy is somehow "losing". That is wrong too, and the data bear it out.

As for the other statistics you posted, inflation is rising, interest rates are rising, there is too much consumer debt, and I believe the economy is going to slow. And maybe we'll have a recession, perhaps a sharp one, which will re-calibrate some of the excesses. Then the economy start growing again, like it always has.

Buying at WalMart is only going to be good in the long term for China because to them in relation to economies of scale the production of WalMart is like the US auto industries effect on the US during Fords boom days.

Being able to afford WalMart prices to US citizens is a step down not up to US consumers and like the jingle said "Oh Big Box Mart, look what you’ve done to me, He’s gotta start all over now, at the age of 53" We are not going from an agrarian economy to an industrial one here we are going from an industrial to none. High tech, silicon valley and nano technology, is a bust when it comes to supporting massive amounts of jobs and job growth has grown but regressed back to the service sector. Wages have indeed gone up but have never kept up with inflation so its a shell game your presenting. The American economy is losing the all too important initiative and it will be more than a simple recession. The manufacturing base reflects the ability of an economy to rebuild, without it what is to stop the entire economy from collapsing?

In real terms what this means is the current manufacturing base can really only support the 1958 level of total jobs or 51,426. That is the scale of the initial correction we are looking at here and globalization is only slowing down this process but it can't stop it and there is a serious lag and that lag will come in a form of a correction that could rupture the economy.