Ron Bloom, The Manufacturing Czar: A Blooming Mistake!

I guess if you absurdly think that it is labor -- specifically union labor -- and not management that creates jobs, then, it makes sense that you appoint a man like Ron Bloom as Obama's new manufacturing czar (Click to See Full Story: "President Obama to Appoint Ron Bloom Manufacturing Czar").

But, having spent years working on the opposite side of the labor unions, I know that the only way that hiring increases, at least when unions are involved, is by the time-tested union technique of worker slow downs. As a manager, I was able to create hundreds of in-house jobs because outside, contracted unionized labor for various services was just too expensive. Because of the cost efficiencies in hiring my own staff, our company had more working cash to expand or create manufacturing jobs or to spend more on Research and Development into new products that would ultimately create new jobs.

I find it very interesting that an ex-union executive would be nominated as the person -- another czar -- whose job it is to increase manufacturing activity in America. Ask yourself this simple set of questions: "Which came first? The Unions or the business they work for? " I am personally unaware of any company who started up with its workers already unionized.

One of the primary reasons that manufacturing has left this country -- in addition to high tax rates and strict government regulation -- is the high cost of labor and the inability of unionized companies to increase productivity because the unions will almost always resist any attempts to automate manufacturing. That's because any automation would eliminate union jobs. Like it or not, labor unions are just another form of a cartel; like OPEC for oil prices or De beers for diamonds. They force higher wages through non-competitive tactics. As a result, the lack of competitiveness forces companies to ship more and more manufacturing to overseas locations. For years, they've refused to concede any small losses of jobs; only to have much of their jobs completely lost to other countries like Ireland, China, Japan, and Mexico. Union membership has consistently declined in the last 25 year from a high of 21 percent of the workforce, 25 years ago, to today's 12.4%.

This year's best examples of labor union's having an opposite and negative impact on the manufacturing sector is the bankruptcies of both General Motors and Chrysler. And, if anyone thinks those two companies have any real future with Obama and his people running the show, one only has to look at the Cash For Clunkers program, where both Chrysler and GM failed to match their current market share by selling cars under that program. GM, for example, has an overall 19% market share in auto sales in this country. Yet, in Cash For Clunkers, GM only sold 17 percent of all the cars sold under that program. Chrysler was even worse. The big winners were Toyota, Honda, and Nissan; all of which have non-union production facilities in the United States and who beat American manufacturers in the depth of quality, craftsmanship, and fuel efficiency. One of the reason that Toyota has such high sales against American autos is because of its resale value. In 2 to 3 years of being in service, American cars have higher repair rates and, subsequently, lower resale values. That all has to do with the fact that, in order to be cost competitive, more of the expense of building a vehicle goes into salaries and not into the quality of the parts that make up the car.

I would think that you would want a manufacturing czar who had a proven track record of creating manufacturing jobs in this country. There are hundreds of them; but, they are almost all CEO's and that's when reality and Obama's labor-leaning ideology and anti-bourgeoisie philosophies are at complete odds with each other. For that reason, don't expect American manufacturing to bloom under Ron Bloom.