“You’re headed for a one-term presidency,” Steve Jobs told President Obama in 2010. According to the recently released biography Steve Jobs, by Walter Isaacson, Jobs went on to say that “To prevent that … the administration needed to be a lot more business-friendly. He described how easy it was to build a factory in China, and said that it was almost impossible to do so these days in America, largely because of regulations and unnecessary costs.”
Last month, there was another suicide at a Chinese manufacturer. It’s possible Obama read about it on his iPad. The suicides are an ongoing catastrophe at China’s largest computer manufacturer, Hun Hai Precision, better known as Foxconn. Former SEIU President Andy Stern didn’t bring that up in his Wall Street Journal editorial praising China’s economic model. I wonder if he talked to Obama about the suicides on his frequent visits to the White House.
Foxconn is a giant. It employs over 800,000 computer manufacturing workers. For perspective, there are about 166,000 computer manufacturing employees in the U.S. Apple has 250,000 Foxconn employees in southern China building “i”products. There are about 25,000 Apple employees in the U.S., for a 10-to-1 ratio. There’s no question Jobs would have liked to have more workers here. But even he couldn’t make the numbers work.
Foreign auto companies have. They’ve solved the U.S. car manufacturing problem. Over the last decade, they’ve set up plants mostly in right-to-work states. The ones that are in forced-union states, like Honda’s plant in Indiana, avoided the UAW. They did it by restricting jobs to people living in 20 rural counties, avoiding 92 counties where most card-holding UAW workers live. A Wall Street Journal article from October 10, 2007, “Honda and UAW Clash Over New Factory Jobs Residency Rules Exclude Most Union Members; Indignant in Indiana” reports:
Of the 33 auto, engine and transmission plants in the U.S. that are wholly owned by foreign companies, none have been organized by the UAW, despite repeated attempts. Mainly, foreign auto makers have located plants in Southern states where the UAW has little presence and where right-to-work laws limit union power. When they have ventured into Northern states such as Indiana and Ohio, they have mostly chosen rural locations far from any unionized plants and UAW halls. The moves now are helping the foreign-owned plants begin to lower wage scales. In the case of Honda’s latest plant, in Greensburg, Ind., the company received $140 million in tax breaks and other incentives, at least $50 million of it in statewide funds. But the company wasn’t required to consider all state residents for jobs [my emphasis].
Last week, the UAW announced it will take a softer approach in its attempt to organize workers of foreign automakers in the U.S. “It’s a retreat,” says Gary Chaison, professor of industrial relations at Clark University in Worcester, Massachusetts. “I think they are in the embarrassing position of trying to announce an organizing drive that has yet to come to fruition.” Now if only their success could translate to all of our public-sector unions.
During his meeting with Obama, Jobs went on to attack America’s education system, which is crippled by union work rules. Isaacson writes that Jobs argued “Teachers should be treated as professionals … not as industrial assembly-line workers. Principals should be able to hire and fire them based on how good they were.” In a March TED talk titled “How State Budgets are Breaking U.S. Schools,” Bill Gates explained that U.S. GDP is $14.7 trillion, and that government spends 36% (including federal, state, and local) and takes in only 26%, leaving a 10% deficit. He has suggested better use of the Internet and better use of cameras in the classroom. But he doesn’t say much about the 800-pound gorilla that is public-sector collective bargaining stinking up classrooms across the land.
In our entitlement state of America, debt is 100% of GDP. Ireland was bailed out at 74% of GDP and Greece at 137%, notes Jim DeMint, the Republican senator from South Carolina in his Wall Street Journal editorial “How the U.S. Can Help Europe: Just Say No.” He continues, “With President Obama in the White House, liberals have succeeded in their longstanding quest to make America more like Europe.”
Meanwhile, in his WSJ piece “A Silver Lining in Europe,” Matthew Kaminski writes:
In a paper presented at a Witherspoon Institute conference this week, German finance ministry official Ludger Schuknecht, who previously headed fiscal policy surveillance at the ECB, notes that the U.S. increase in its size of government over the past decade was on par with those of Italy, Spain, Portugal, Greece, Ireland and the U.K. All the others have tried to rein it in, he writes, but the U.S. “stands out as the country that seems to be quite oblivious to the need for adjustment over the near future.” Americans can’t say the Germans didn’t warn them.
President Obama may not have lit the fire, but he’s certainly done nothing except fan the flames of antibusiness and pro-union rhetoric that Steve Jobs spoke to him about—and that should make him a one-term president.