Okay, so you might get the feeling I am anti-union. Not really, unions do hold an important place in certain developing economies, but in the western world you would be hard pressed to tell me one good reason we still have unions. Especially professional sector unions.

All unions do in our economy is distort wages and working conditions. Ask any knowledgable person in a “mill town” and they will say how the mill and union have provided a stable source of employment, but at the same time have provided a road block to any future growth. Their youth doesn’t aspire to anything but getting their union card when they get hired on at the mill, sometimes without even completing high school. Small business can’t start up because they are unable and unwilling to compete for workers on the union pay scale.

And why do we have unions in professional circles? Why do nurses, doctors and teachers have a union? Is it the sweat-shop conditions? Is it the over whelming fear that they will be replaced by scab workers? Maybe their employers will decide to shut down the whole operation and put them all out of work. None of the above. The plain and simple truth is that by holding their employers to ransom, ( that means you and I pay more in taxes ) they can get more money. Yup, that’s it. The union line is that they are trying to protect us from substandard service, but what has any union done to help you and I? Are your children learning more or your waiting times less?

While that may sound harsh, the truth is that unions inhibit efficiencies and protect sub-standard workers and policies. When employers do want to change they are met with union barriers. Take the current postal strike. Talking to one of the postal workers/union member caught up in this strike exposes the fact that Canada Post is trying to get a handle on sick leave. As the postal worker stated to me, “a few bad apples in the union have ruined it for the rest of us.” Seems that the number of sick leave days applied for was astronomical. Canada Post wanted to bring it back in line so proposed that a private insurance company would track sick days and not allow any that seemed unnecessary. Doesn’t sound like a bad thing does it? Well, the union would have none of it. Rather than try to control those “bad apples” or let Canada Post deal with them, they had to go on strike to force Canada Post to submit to their demands. Unfortunately for the worker I was talking to, it doesn’t look like Canada Post is going to give in so easily. As a result all the “good apples” are stuck on the picket line at Christmas. Happy Holidays.

Having relatives in Industrial Cape Breton I was amazed and aghast any time I would visit and hear of the terms that the mine workers had negotiated with DEVCO. Men were actually putting in a few hours of honest work and being paid for a full day! And they wondered why it shut down. They were soooo hard-done-by.

Probably the worst aspect of unions is the mentality it brings to workers. The “Us vs. Them” mantra doesn’t work in this economy. We need businesses and workers who are going to sit down and develop strategies to keep the business ongoing and the workers employed for the long term. Not a union trying to grab everything that “they deserve”.

I have to hand it to Buzz Hargrove. The tireless complainer, who up until six months ago was the head of the Canadian Auto Workers union, has vanished. Yup, the guy who was going to fight plant closures tooth and nail, and protect the “unfairly treated Canadian auto worker” is no longer with the union. Interesting that he would scram at such a crucial time in the CAW’s history. With the government mandated concessions that the unions are going to have to make to keep the Big Three alive, I guess Buzz saw the writing on the wall. Who wants to lead a union when everything is going south, literally and figuratively. So to Buzz, I take my hat off. He truly has the union spirit. “Cover thine own arse first.”

The current economic shake up will hopefully provide and opportunity for business and its workers to come to a working arrangement that benefits both, and I personally hope that unions are not a part of it.

Until then, I remain,

A Sour Kraut

I like unions this much! (My thumb and fore-finger are touching) The US and Canadian governments are throwing massive amounts of money at two of the Big Three. Why? Because its is TWO of the Big Three and one is GM. If it was only Chrysler begging, they would be told where to go. But, with GM in tow and all of the fall out that would arise from their failure, the governments felt they had to do something to cushion the eventual fall. In actuallity, a gutsy administration would have cut them off and let them go bankrupt. Contrary to popular belief, filing for Chapter 11 ( the US option ) or declaring bankruptcy ( the Canuck version ) does not mean that the businesses shut their doors immediately. Under those two senarios they have the option of restructuring while getting protection from their creditors. Remember Air Canada a few years ago?

In my humble opinion, one which is shared by at least two other crackpots, GM and Chrylser should have been forced into bankruptcy. While the governments requirements for this “bailout” are as strict as a bankruptcy, there is nothing forced on the manufacturers. If they don’t meet these requirements they have to pay back the bailout, really a loan, at once. This decision will be made by the government in March. The manufacturers have to renegotiate everything; from suppliers contracts to credit terms to (LOOKOUT) workers contracts. Specifically, W. wants the American manufacturers to bring their workers wages “in line with those paid by their Japanese competitors” in the country. Another wide held misconception is that that Honda you buy is really a Japanese car. Designed and made in the land of the Rising Sun. Nope. That Honda, Hyundai, Nissan, Toyota and many others are built in places such as Mississippi, South Carolina, Indianna and Ontario. So much for the idea that the workers building these cars are crazy Japanese that are happy with a bowl of rice and a nice thank you from the company every year. These cars are being built, and well built I might ad by regular ol’ Yanks and Canucks. So why do GM and Chrysler have to bring their wages for their good ol’ boys in line with the wages of Toyota’s and Honda’s good ol’ boys? Simple. The Japanese and Koreans won’t set up a plant if there is a wiff of the UAW or CAW setting up shop. Why would that be you ask? Because the Japanese aren’t stupid? To be fair neither are the Big Three. But the UAW and CAW have been there forever, so no matter how much they would like to get rid of them they can’t. The new import plants don’t have that baggage.

The every car manufacturer in world knows that you can’t be competitive paying workers $70,000 plus to put screws in a door panel. And the workers joining the new, non-unionized import plants know that they are not worth $70,000 plus just to assemble a door. Now the government is telling the plants what they already knew. Except this time they are also telling the union that they better clue into reality.

Already the UAW and its less intelligent cousin, the CAW are saying that they are not going to give up their harde earned wages and benefits. Hard earned! This is a family site so I will keep the expletives to myself. “Hard earned” could easily be replaced by “extorted”. Unions don’t get increases in wages through hard work. They do it by threatening to shut down a business. Sure the business is the bad guy and they are burning hundred dollar bills in their mansions to keep warm while the workers are risking life and limb at the workplace hoping to get enough to put food on the table. Ha! The UAW and CAW have bled the car companies dry just like the Mine Workers in Cape Breton bled Devco to the bone.

The rise of the UAW and CAW occurred in the fifties and sixties when the Big Three could do no wrong and were making money hand over fist. The Unions wanted a bigger piece of the pie and since a car plant is a pretty capital intensive thing, the better business decision was to keep the unions happy and keep the plants running. The Japanese are at an advantage. They don’t have a couple billion tied up in a plant so if they do not get the assurances that they can run it union free, they cancel the project and move on. No extortion there. As a result they can open as a good corporate citizen, offer their workers an above average wage with perks and benefits and contribute back to the community. Doesn’t sound so bad.

If the unions don’t get on board with this, the government has said that they will not back them and the loan will be called. As a result the companies will be forced into bankruptcy, wherein they can tell the union where to go and the UAW and CAW will be left blowing in the wind. Since the union leadership has to show its members that there is a good reason why they take such a whopping chunk of their paychecks it is only logical that they will put up an offense front. Hopefully it is all smoke and mirrors.

Now, the companies take a lot of the blame. They signed these contracts didn’t they. Yes they did. Why? Because times were good and they knew that they could always produce the high-margin Lincolns, Cadillacs, trucks and SUV’s that would allow them to afford the wages. GM at the moment has a $700 billion health care liability for its retired workers. Unbelievable and obviously unsustainable. However, the landscape has changed. They can’t afford to compete in the compact car market that the imports own even if they wanted to. Sure the Big Three saw the writing on the wall, but they kept hoping that they could ride it out with their big stuff. The last six months changed all that. The bottom fell out of the truck market at $147 a barrel for oil. It also fell out for BMW, Mercedes and Porsche.

So, the while Ford has the option of bringing in its line of well designed, well built and fuel efficient Ford of Europe line, GM and Chrysler have to reinvent themselves. Hybrids are a no go, they lose too much money. Electrics are a better option but they need government help to provide the recharging infrastructure. What’s left? Kick out the union and start competing.

Until then, I remain
A Sour Kraut.

Re: Oil is dead.
In last weeks blog about oil, I stated that OPEC would no longer be able to control the market through squeezing supply. Last Friday Saudi Arabia began making noises that it may be thinking of drastically cutting its output. The Saudi’s are the forward thinkers of the OPEC countries and usually are quite pragmatic when it comes to tempering the screaming idiots like Chavez. So, any news that the world’s largest oil producer was going restrict supply would normally panic the oil markets and prices would skyrocket. Well, oil went up 10% on Monday but has since fallen back.

Told you.

I remain,

A (Smug) Sour Kraut

Motor Vehicle Inspections. The path to safer roads and highways. Big brother insuring that people are driving safe, reliable vehicles. The logic is that if the car is in top notch condition we should have fewer accidents. Well, in little brain, I can’t remember any recent major accidents that could have been avoided because the car was not up to the Province’s MVI specifications. In fact, most of the cars I see in the pictures in the paper are so torn apart that you can’t tell what make they are.

What we have is an MVI system that puts more emphasis on wiper blades than it does structural integrity. A car fails inpsection if a wiper blade is “not the same length as OEM”. ( OEM – Original Equipment Manufacture) It may be working fine, but if it is one centimeter longer – fail! At the same time a car’s frame cannot be “cracked, broken or rust perforation affecting its integrity”. Here is where we get into the problem with the current MVI system. The government has downloaded its responsibility on to the shop mechanic. In this climate all vehicles will have some rust issues after 5 to 7 years. So as a mechanic you are looking at the underbody of a car and trying to make a judgement as to whether the rust you see has affected the frames structure. In some cases it has. The car will probably fold up on impact. But, since there are no obvious holes or cracks the mechanic has nothing concrete to use to fail the car. If the mechanic errs on the side of caution, he/she is called a money-grabbing crook.

Brake lines are the same. If they are rusted and “deteriorated or damaged to the extent that failure is imminent” the car fails. Can you pick out a mechanic who has the special ability to determine when a corroded brake line (again in this climate all of them are) is about to fail?

The other area that is absolutely stupid is tires. Tires do not fail until there is less than 2/32 of an inch of tread. That is often less than the wear bars placed on the tires by the manufacturer. So, while a wiper will fail the car, a stone chip in the windshield will fail a car almost bald tires do not! When was the last time you heard of an accident that was caused by a stone chip!

So in my opinion the three most important pieces of this MVI game are mishandled. The three vehicle systems that I think are the most important when it comes to accidents and saving lives. Brake lines should be mandated to be changed after a certain period of time. I’m suggeting seven years. As for the body, some countries require that vehicles of a certain age be taken off the road. If the drivers don’t want to do that, they should be able to have their vehicle recertified at special inspection stations with the proper tools that can test the strength and thickness of rusted panels/frame components. And tires should be thrown away after 60% of their useful tread is gone.

This would eliminate any of the stupid liability exposure that most large repair shops are afraid of and put them back in the business of repairing problems not guessing whether something will fail or not.

As far as getting what we deserve, I have never heard of anyone who actually maintains their vehicle, complain of the MVI system. Ask any mechanic and he/she will tell you that the worst cars are the ones where the owner states “Oh, there is nothing wrong, just throw a sticker on it!” Yeah right. It is those people that drive around in junk, yet will be the first to come back and sue the garage if it gets a new MVI, yet the wheel falls off two-hundred yards down the road. And ask these people to pay for new tires when their “car needs absolutely nothing” and they will scream bloody murder.

As far as the MVI system being a government money grab, its not. The goverment sells a book of twenty-five MVI stickers to licensed inspection stations for $86.75 hst included. Reject stickers are FREE – imagine.

So, lets get a system that makes sense. New cars don’t need to be inspected for at least three years. And after that the crucial systems should have mandated replacement periods. A good upfront system that will allow people to budget for repairs and place vehicles on our roads that may not be OEM perfect, but will be solid and safe.

Until then, I remain,

A Sour Kraut.

I am going to go out on a limb here and state that it my opinion oil and other fossil fuels are as dead as the dinosaur remains that make them.

I am tired of “knowledgable” people talking about peak oil, dwindling reserves and getting ourselves off our reliance on fossil fuels. First of all, the outrageous prices of 2008 will never happen again, and without the upward pressure of speculators would never have happened this past year. The demand numbers were not there to justify it. What this did is scare everyone into looking at their fuel use habits and changing them. A good thing. It also put the final nail in the coffin reserved for the North American car industry’s product line. Also a good thing. As a result of the sky high energy prices, the world economy, already teetering because of the credit crunch was pushed over the edge. Another good lesson.

So, the aftermath is going to shape up like this. People are going to use a lot less fuel over the short term. The North American auto industry is struggling for survival and when it restructures, either through a bailout with many strings attached or bankruptcy, it will be forced to produce efficient diesel, electric and hydrogen vehicles.

By the time another economic boom comes around and people want to return to their wasteful ways, their options will be limited. Hummer’s will be sold at flea markets and the big V-8 pick up truck will be a thing of the past.

Oil demand will continue to stagnate if not fall. Developing countries like China and India will see the writing on the wall and in order to compete will have to produce similar vehicles with similar technology. The smog problems in both countries will also mandate a switch toward clean vehicles. The petrochemical industry will come back, but I don’t think strongly enough to affect demand.

So, all of the countries that are now relying on oil to keep themselves afloat are going to be wondering how they can turn this black goop into anything usefull. Sure there will still be a market, but as OPEC has seen over the past several months, oil will no longer be king and trying to control the market through supply won’t work.

All of the concern over the Alberta tar sands emissions and environmental impact will disappear, since those projects will shut down. They need $70 oil, to break even.

The last year has been painful, but in hindsight it will have taught the world a few crucial lesson. Remember, once bitten, twice shy. Even as oil plummets, people will still say, yeah, but remember it could still go back up again.

One of the great things that could come out of this is the destruction of the whole ethanol industry. Getting government subsidized ethanol producers out of the food crop market will lower the price of staples and allow developing nations to feed their populations again.

So you heard it here first. Oil is dead. Forget about peak oil and all that other stuff, just worry that the countries that had been relying on oil to fund their economies don’t go crazy and do something foolish when oil goes in the toilet and stays their – Russia are you listening.

Until then, I remain,

an optimistic Sour Kraut.

If you are like me you have had quite enough of the infantile behavior that has been center stage in Ottawa. Get a grip children!

In the front of the pack we have the three musketeers: Dion, Layton and Duceppe. Behind them we have all of the slavering followers who can taste the power of government, ie. Ed Broadbent. On the other side we have little Stevie Harper and his clan trying to look innocent and saying “What!?”.

Here is what everyone needs to understand. Little Stevie views politics as a game. To him it is a game that is just starting once you get into government. Don’t kid yourselves, everyone up there will stab you in the back if they get a chance, its just that in Parliment they have an agreement that no matter what goes on in the House of Commons, you can still have a beer afterward. Stevie isn’t like that. He is very up front about it. He doesn’t want to have a beer with you afterward, so you better be on your game or he is going to take away all of your pieces if he gets the chance.

So, up comes the Economic Update. Rather than just deal with the information on the economy, lil’ Stevie sees his opportunity to stick it to the other parties. Since the ordinary Canadian is going to have to cut back in the coming months, Stevie thinks it would be a good idea if Canada’s political parties, Conservatives included, showed some leadership and did not accept the $30 million in funding they get from you and me the taxpayers. Sounds simple enough. Well, not really. What lil’ Stevie knew is that the Conservatives are very good at fundraising. The other parties not so much. Who’s fault is that? The other parties of course. They rely on the public purse, so they don’t put the effort into developing good fundraising campaigns. If you take away the public funding, these parties don’t have the money to continue to exist. That’s why we have the problem. It has nothing to so with a lack of an economic stimulus package. If you ask leading economists what the Conservatives need to do to stimulate the economy they will tell you that the Government has already done everything it needs to or should do. It has lowered interest rates, injected billions to improve liquidity, lowered taxes and tried to coordinate everything with the other G8 nations. In addition because of the fall in commodity prices the Canadian “Petro” dollar has fallen nearly 25% this year. Very good for exports.

Now, the opposition parties must have gotten wind of lil’ Stevie’s plan because this whole coallition thing must have been in the works for some time. I find it hard to believe that they could pull this all together in two days! This had to have been planned for some time. If that is the case the term “coup” is appropriate.

Faced with all of this lil’ Stevie had to back down. Out goes the cutback in public money to the parties. Out goes some of the lower wage increases for public servants. Basically a red faced Stevie had to admit that some of these things were probably ill suited for an “Economic Update”. If you have ever played chess against someone like lil’ Stevie you know that you can’t take your eyes off your Queen. No matter how many pieces they lose in the process, players like lil’ Stevie will always take your Queen.

So here you have a Prime Minister that basically gets his knuckles rapped and is told by the House and people in his own party to smarten, and grow, up.

On the other side you have the used car salesman that passes as leader of the NDP, Dion the peon of the Liberals and flying down the left wing, good ol’ Gilles. Naturally, when they heard of the cut back in funding they realized they had to do something to insure their survival. A coalition was the only way. Telling the people that it was because the goverment was not doing enough to stimulate the economy was insincere at best. Their “immediate” $30 billion plan to boost the economy on infrastructure and other program spending (that would be decided after they got into government and got a firm handle on the finances) was not immediate or well thought out. Throwing money at the economy will only do one thing – line the pockets of the consultants hired to best determine the projects to be funded. How will spending hundreds of millions on asphalt help out-of-work autoworkers? It won’t, but that’s not what the three musketeers want you to believe. By the time they really had to come up with specific areas where they could help the economy, they were so enthralled by the prospect of actually taking power they could not see straight. Neither could Dion’s camera man! Sorry, camera person.

So, home comes Michele to sort through things. Naturally, she saw through the child’s play and said, go home boys and come back when you want to act like adults. If they can’t get their act together by the time January 26, 2009 comes around, then they can actually vote down the government on a bill that actually means something – the next budget. By then the Canadian gov’t may have an idea of where Barrack and his buddies are going and they can act accordingly. If they don’t come through with something that makes sense, sure, turf them out.

It would have been so simple if lil’ Stevie had just said that in these trying times the Conservative party wants to lead by example and will not be accepting any taxpayer money and they hoped the other parties would follow suit. The public pressure would have been enormous on the other parties, Stevie would have scored his points and that would have been that.

But we are dealing with children here.

Until then, I remain,

A Sour Kraut

We have a wonderful misconception in this country. We truly believe that we have universal medical care. Well we don’t. Not in the sense that when you need the best possible medical care you receive it. We have a medical care system that does two things. It makes you wait for treatment and it provides treatment that in some cases is the best and in others meets a certain standard.

Now to me the term “universal medical care” means everyone gets whatever they need whenever they need it. Would be nice wouldn’t it. Tell that to my friend who was on a clinical trial for an anti-cancer drug. Worked great. Now the trial is over. If they have $8000 every 28 days they can continue to receive it, otherwise the government will not be picking up the tab. Terminal cancer can be such a drag.

Then we hear that the Capital District Health Authority is running a deficit. They will not be able to cover their costs to the tune of $7 million. Well since you and I, the taxpayers, are the ones footing the bill why are we worried about a deficit? Really. This is a service that is supposed to be there when we need it. If the population needs it borrow the money. Why is it operating under a budget? It is not as though we can avoid the costs. If you need heart surgery you need heart surgery. We all have to pay for it sometime. So why not pay for them sooner and have a healthier population? There is the theory that in the long run this will actually reduce costs. If nothing else it will eliminate a lot of pain and suffering as people wait. Or maybe the strategy is to delay care so that you die first.

I just don’t get it. If we truly beleive that the medical system is operating as efficiently as possible and managing the money as best as possible, why does it run under a budget? The reason is that our government doesn’t like to operate with a deficit. Therefore they give the hospitals just enough to keep them at that “certain” standard of service year in year out. Good for the books, not great for the patients.

Secondly, nobody in the know thinks the medical system operates efficiently. You know why, because no one in the system does simple cost accounting. Yup, the kind of thing that would get you fired from running a private business just does not happen in our hospitals. Go ask how much a hip replacement costs and you will get an answer like “Well we require $xxxxx to run the orthopedic department.” So what. What does that $xxxxx really get us? Who knows. Go to your local vet and ask how much it costs to treat Fluffy. I bet they can tell you to the cent.

I would love to know where our health care dollar goes. Sure, they will tell you that so much is needed to do this and so much for such and such a program, but that does not tell me where and why it is being spent. I often hear the health care guru’s talking about the cost of a bed in a hospital. Costs of keeping a bed “open” are usually in the $1200 per day range. Well, that makes very little sense to me. The “cost” of a “bed” is depreciation. The room, the bed, the equipment the bricks and mortar are all bought and paid for. So having that bed empty or with Mr. Smith in it is going to “cost” the same. Now the variable cost will change with the patient. So many beds will require an extra nurse and a visit from the doctor. That can’t be $1200 per day! And if Mr. Smith really needs care the “cost of care” physicians fees, medications, nursing care etc. can not be saved by shutting down beds. When you think about it, if it truly does cost $1200 per day for a bed, why don’t we save a whole heap of money and send patients to the Westin Hotel in Halifax. Nice hotel. A suite and top quality food will run you about $250 per night. Heck we can send patients to Cuba to an all inclusive resort for $1500 per WEEK!!

This may sound crazy, but you have to see things from all angles to find out a solution. I don’t think that throwing more money at the system is going to be the solution until we can figure out where the money is going now. The problem is no one in the system wants to answer those questions. It requires people to analyze things like waste and efficiency. Do you think Joan Jessome wants her union members put under an efficiency audit? How about the nurses or doctors? Don’t think so. What about the administrators? Yeah, right.

It’s easier to cut and make the patients wait. After all, we are getting used to it.

So sleep comfortably all you people who are still healthy. Universal medical care is a pleasant thought, but, well night-night.

Until then, I remain,

A Sour Kraut