As I pick up the pace of work again, coming into the midterms, I have to get some stories cleared off the desk in order to make room for some others, and that’s what we’re about today.
We’ll be talking about saving more than 300,000 of this country’s most important jobs, and paying for it in a way that is not only good policy, but is a real problem for Republicans who are yelling “no new taxes!” once again while pretending they care about actually paying for actual spending and actually want to cut actual unemployment.
We have a bit of work to do today, but we want to keep it somewhat short...so let’s get going.
So across my desk have come documents that report how many jobs will be saved by the House coming back into session to vote out H.R. 1586 and send it to the President for his signature.
Long story short, after all the commemorative pens have been distributed about 319,000 more people will be working, including 161,000 more teachers who will be in class this year then there would have been there if it wasn’t for this bill...and as it happens, that many teachers is actually about 25,000 more people than the total number of workers in all of America’s coal mines combined.
It’s going to cost $10 billion for the “save the teacher’s jobs” part of the bill; another $16.1 billion will be paid to states to help them pay for their share of Medicare expenses this fiscal year, that will allow them to avoid laying off the remaining 158,000 workers, many of whom are working for someone like Child Protective Services or are State Troopers or are working for your State’s Department of Corrections...and about 80,000 of those jobs are private sector jobs, as contractors who work for the various states are also kept on the job.
To give you an idea of just how many teachers we’re talking about, Florida will have 9200 more this fall than they would have otherwise, Illinois will have 5700 more, Kentucky, 2200 more, and in California there’ll be about 16,500 more teachers in the classrooms this fall than if this bill wasn’t going to pass.
You can look up how many more teachers your State is estimated to have this fall at a handy page on the House Committee on Education and Labor’s website.
I don’t have a handy chart for the remaining workers, but if those jobs are more or less distributed the same way you could expect California, as an example, to save a total of about 33,000 jobs with just this one bill, and Florida to save about 18,000.
How badly do states need the money?
By an amazing coincidence, as I’m putting this story together I’m watching tonight’s “The Rachel Maddow Show”, and sure as life, she’s working the same story...and she’s reporting that Paul Krugman’s reporting that several states are literally unpaving their roads because they can’t afford to maintain them any more.
So here’s the best part: it’s all paid for by closing a variety of tax loopholes and recovering money that wasn’t being used from other programs, so no new deficit spending or additions to debt are required.
The tax loopholes?
They take aim at the various methods multinational companies are using to shield US income from US tax collectors; these mostly involve getting a Post Office box in the Cayman Islands, or something similar, and more or less claiming all your US business is derived from your new “regional office”, or that you believe you paid all your income taxes on your US income to some other government.
Our Republican friends are going nutty about this, claiming, as John Boehner just did on “Meet The Press”, that: “...they want to raise the taxes on the American people .”
This is particularly tough for Republicans because they’re dying to save The Bush Tax Cuts For The Really, Really Rich, all $800 billion worth of ‘em, without explaining how they would be paid for, all the while complaining about the much, much, lower cost of paying for saving these 300,000 jobs—and, in the very next sentence, saying they hate deficits...and if you check out the transcript from that “Meet the Press” interview, you’ll see that David Gregory asked Boehner about how he planned on paying for the $800 billion in tax cuts he wants, three different times, and he wouldn’t give a straight answer once.
So when people ask you: “What’s Washington doing about jobs?”, you can tell them they’re not only saving about a third of a million of the jobs that fight fires, and put criminals in jail, and teach your kids this fall—and paying for it, to boot—but those smaller classrooms are also making it more likely that your kids will have better jobs when they grow up; all of that without much help from our Republican friends, who’s biggest job right now seems to be figuring out how to borrow another $800 billion from you and China to give away to their wealthiest friends.
Which is its own special kind of job...and I’m pretty sure the word “snow” is somehow involved in the job description.
Showing posts with label Unemployment. Show all posts
Showing posts with label Unemployment. Show all posts
Monday, August 9, 2010
Tuesday, May 19, 2009
On Cutting Dealerships, Or, We Examine The Costs Of Selling Cars
So there’s a lot of conversation out there about car dealerships being told they won’t be selling cars for Chrysler and GM any more.
The idea, we are told, is to save the auto manufacturers money by reducing the number of dealerships with whom they do business.
I don’t really know that much about the car business; and I really didn’t understand where these cost savings would come from, but I was able to have a conversation with the one person I do know who actually could offer some useful insight.
Follow along, Gentle Reader, and you’ll get a bit of an education at a time when we all need to know a bit more about these companies we suddenly seem to own…and about the closure of thousands of local businesses that will make the news about our bad job market worse.
We know, at the moment, that Chrysler wants to close more or less 800 of its 3181 dealerships, and that the list of dealerships was disclosed as part of the company’s bankruptcy filing. The dealer relationships with Chrysler are expected to end June 9.
We also know that GM intends to end relationships with at least 1100 dealers. That list has not been publicly disclosed, and the dealer relationships are not scheduled to end until after the end of the 2010 “model year”, in October of 2010.
It is anticipated that GM will eventually cut 2600 dealers from its current network in an effort to get down to about 3600 dealers; suggesting a second round of cuts is yet to come.
(It appears that Ford is seeking to cut sales costs by about $600,000,000 annually while not cutting the number of dealerships.)
In order to protect the innocent, I’m not going to name my source for this story, nor the dealer for whom he works. For our purposes, let’s refer to him as the “dealer rep”.
So the first thing the dealer rep told me is that many of the dealers affected are “midlevel” dealers who operate in a market with several other nearby dealers; closing these dealers will hopefully reduce costs without substantially reducing overall sales in those markets.
He reports that it costs GM about $250,000 a year to support each midlevel dealer.
The costs include providing unique tools to dealers, providing training to dealer personnel, and advertising and promotional expenses.
I’m told that these are “co-op” costs, with dealers also paying a portion of the same expenses…but GM’s share, multiplied by every 1,000 midlevel dealers removed from the rolls, equals a $250,000,000 annual savings for GM.
He also tells me that many of the dealers are located in rural markets and sell a relatively small number of cars. For these dealers, there is the additional cost of having to deliver vehicles on partially empty transport trucks (or as the dealer rep put it: they’re getting paid less for the delivery than it costs to actually make the delivery).
If we assume that GM spends only 30% of that $250,000 spent annually on midlevel dealer support for these dealers, each 1000 dealers cut saves about $85,000,000 per year; if they spend 60%, the savings is about $170,000,000.
Add it up, and the potential savings for GM might be in the range of $400-500,000,000. Chrysler might expect to save roughly a third of that amount…but that would assume the composition of dealers, and the money spent, is about the same as for the GM dealer group.
(Here’s a quick bit of gossip that I have not confirmed through a second source: the dealer rep told me that some GM dealers are being cut not for lack of sales, but as a result of “customer service” issues.)
There is another group of dealers who will be cut “through attrition”. These include Pontiac dealers, who already know there will be no more Pontiacs to sell, and Saab dealers, who know they won’t be part of the GM future. There are also dealers who are (and have been) closing because of the general economy.
Hummer and Saturn dealers currently face an unknown future.
Something else you should know: the dealer rep told me that Chrysler filed for bankruptcy before terminating the dealer relationships, which may give those dealers more rights in a bankruptcy proceeding than GM dealers that were notified before any bankruptcy filing.
He suggested such a filing might occur as soon as the second week in June…but that is also something I did not confirm through a second source.
He also points out that the successful outcome of all of this is that the two companies are able to make the same sales goals as before with fewer dealers…and he has no idea whether that will come to pass or not.
As for options: the dealer rep reports that the one manufacturer seeking dealers today is Hyundai; but even if they became Hyundai dealers, a lot of stores—particularly in rural areas—are not going to be as successful selling Hyundais as they were selling Chevy, GMC, or Dodge trucks…which might turn out to be good news for Ford and Toyota.
So what have we learned?
GM and Chrysler could save substantial amounts of money by reducing dealers; that process is underway…and for some number of dealers, it’s not about sales volume as much as it’s about sales practices.
GM and Chrysler hope that they can sell the same number of cars with fewer dealers, but as of today there is no way to be sure if that will come true or not.
The biggest winners in this process might be the surviving dealers, or the Ford and Toyota dealers with whom the closed dealers are no longer competing.
The employees of nearly 3000 dealers—and the cities in which they are located--are unlikely to end up winners in this process; however, some (such as mechanics) might eventually find work at the surviving dealerships.
Finally, I apologize for the fact that this wasn’t as inspiring a story as we like to present in this space…but now that we are basically the owners of two major auto manufacturers, it’s a set of facts and figures we better get to know.
WARNING—Self-promotion ahead: I am competing for a Netroots Nation scholarship, and I was not selected in the first round of voting. There are two more chances to be selected, and the voting has restarted from scratch…so even if you’ve done so before, I still have to ask you to stop by the Democracy for America site and click on the “Add your support” link to offer your support for me again. Thanks for your patience, and we now return you to your regular programming.
The idea, we are told, is to save the auto manufacturers money by reducing the number of dealerships with whom they do business.
I don’t really know that much about the car business; and I really didn’t understand where these cost savings would come from, but I was able to have a conversation with the one person I do know who actually could offer some useful insight.
Follow along, Gentle Reader, and you’ll get a bit of an education at a time when we all need to know a bit more about these companies we suddenly seem to own…and about the closure of thousands of local businesses that will make the news about our bad job market worse.
We know, at the moment, that Chrysler wants to close more or less 800 of its 3181 dealerships, and that the list of dealerships was disclosed as part of the company’s bankruptcy filing. The dealer relationships with Chrysler are expected to end June 9.
We also know that GM intends to end relationships with at least 1100 dealers. That list has not been publicly disclosed, and the dealer relationships are not scheduled to end until after the end of the 2010 “model year”, in October of 2010.
It is anticipated that GM will eventually cut 2600 dealers from its current network in an effort to get down to about 3600 dealers; suggesting a second round of cuts is yet to come.
(It appears that Ford is seeking to cut sales costs by about $600,000,000 annually while not cutting the number of dealerships.)
In order to protect the innocent, I’m not going to name my source for this story, nor the dealer for whom he works. For our purposes, let’s refer to him as the “dealer rep”.
So the first thing the dealer rep told me is that many of the dealers affected are “midlevel” dealers who operate in a market with several other nearby dealers; closing these dealers will hopefully reduce costs without substantially reducing overall sales in those markets.
He reports that it costs GM about $250,000 a year to support each midlevel dealer.
The costs include providing unique tools to dealers, providing training to dealer personnel, and advertising and promotional expenses.
I’m told that these are “co-op” costs, with dealers also paying a portion of the same expenses…but GM’s share, multiplied by every 1,000 midlevel dealers removed from the rolls, equals a $250,000,000 annual savings for GM.
He also tells me that many of the dealers are located in rural markets and sell a relatively small number of cars. For these dealers, there is the additional cost of having to deliver vehicles on partially empty transport trucks (or as the dealer rep put it: they’re getting paid less for the delivery than it costs to actually make the delivery).
If we assume that GM spends only 30% of that $250,000 spent annually on midlevel dealer support for these dealers, each 1000 dealers cut saves about $85,000,000 per year; if they spend 60%, the savings is about $170,000,000.
Add it up, and the potential savings for GM might be in the range of $400-500,000,000. Chrysler might expect to save roughly a third of that amount…but that would assume the composition of dealers, and the money spent, is about the same as for the GM dealer group.
(Here’s a quick bit of gossip that I have not confirmed through a second source: the dealer rep told me that some GM dealers are being cut not for lack of sales, but as a result of “customer service” issues.)
There is another group of dealers who will be cut “through attrition”. These include Pontiac dealers, who already know there will be no more Pontiacs to sell, and Saab dealers, who know they won’t be part of the GM future. There are also dealers who are (and have been) closing because of the general economy.
Hummer and Saturn dealers currently face an unknown future.
Something else you should know: the dealer rep told me that Chrysler filed for bankruptcy before terminating the dealer relationships, which may give those dealers more rights in a bankruptcy proceeding than GM dealers that were notified before any bankruptcy filing.
He suggested such a filing might occur as soon as the second week in June…but that is also something I did not confirm through a second source.
He also points out that the successful outcome of all of this is that the two companies are able to make the same sales goals as before with fewer dealers…and he has no idea whether that will come to pass or not.
As for options: the dealer rep reports that the one manufacturer seeking dealers today is Hyundai; but even if they became Hyundai dealers, a lot of stores—particularly in rural areas—are not going to be as successful selling Hyundais as they were selling Chevy, GMC, or Dodge trucks…which might turn out to be good news for Ford and Toyota.
So what have we learned?
GM and Chrysler could save substantial amounts of money by reducing dealers; that process is underway…and for some number of dealers, it’s not about sales volume as much as it’s about sales practices.
GM and Chrysler hope that they can sell the same number of cars with fewer dealers, but as of today there is no way to be sure if that will come true or not.
The biggest winners in this process might be the surviving dealers, or the Ford and Toyota dealers with whom the closed dealers are no longer competing.
The employees of nearly 3000 dealers—and the cities in which they are located--are unlikely to end up winners in this process; however, some (such as mechanics) might eventually find work at the surviving dealerships.
Finally, I apologize for the fact that this wasn’t as inspiring a story as we like to present in this space…but now that we are basically the owners of two major auto manufacturers, it’s a set of facts and figures we better get to know.
WARNING—Self-promotion ahead: I am competing for a Netroots Nation scholarship, and I was not selected in the first round of voting. There are two more chances to be selected, and the voting has restarted from scratch…so even if you’ve done so before, I still have to ask you to stop by the Democracy for America site and click on the “Add your support” link to offer your support for me again. Thanks for your patience, and we now return you to your regular programming.
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