Thursday, June 5, 2008

Where will all the Automotive and Airline Workers Go?

Just skimming through all the restructuring/firings of late [May 21: American Airlines Cutting Jobs and Routes], I am wondering out loud where will all these people go to work next? Just looking at the airline industry, in the past week or two alone
  • Continental(CAL) became the latest airline to announce cutbacks in its schedule, saying it will chop fourth-quarter domestic mainline capacity by 11%, resulting in about 3,000 job losses.
  • On Wednesday, United Airlines, a unit of UAL(UAUA), announced plans to reduce its fleet by 100 aircraft, taking out 17% to 18% of its mainline domestic capacity by 2009, and eliminate several thousand jobs.
  • American Airlines, a unit of AMR(AMR), said it would lower mainline domestic capacity by 11% to 12% in the fourth quarter, retiring at least 75 mainline and regional aircraft. Overall capacity will decline by 7% to 7.5%, and thousands of employees will be let go.
  • Delta(DAL, which is merging with Northwest(NWA), has announced capacity cuts of about 10%, which will be accompanied by about 3,000 job losses.
I realize this news is great for the "stocks", but being a bleeding heart liberal and all shouldn't I ask what we are going to do with these people? I count about 10,000 new Walmart (WMT) workers, medical transcribers and new federal government workers (state governments will soon be cutting jobs since they actually have to BALANCE a budget - so all we have left is the federal government to soak up these people). [Apr 15: Factories Fading, Hospital Step In] After all these are the "job growth engines" we've been seeing in the job reports (along with the fake construction and financial jobs created out of thin air) Don't even get me started on the automotive side which makes the airline industry look like a walk in the park.

I mean, at some point don't we need Americans who can actually afford to buy new cars (without crazy credit terms like we've seen of late - 7 and 8 year loans) [Feb 13: Car Loans Being Stretched to 7 Years] and be able to afford fly on the airlines? [Apr 8: Now on to Airline Inflation] Or is this going to be reserved for the upper 1/3rd of society? Just asking - being a liberal bleeding heart and all. Obviously we know these people do not deserve health care either because they "don't work hard enough" to deserve it (source: Fox News)...

Perhaps Signapore Airlines or a Chinese or Indian airline will pick up some of these workers - they come cheap! Or when does the day start when hungry Americans looking for a better life smuggle themselves across the border to Canada... to do work that Canadians won't do? Oh the irony of it all.

Oh well, we'll look forward to all the "green collar" jobs the candidates are talking about. Should bring a ton of new job creation here. What's that? We're about 10 years behind most major Western economies on that front? Oh ok. Well don't worry about details like that - 5M green collar jobs will be here soon enough - the candidates pinkie swear. Or perhaps many will return to our roots and become farmers again - I mean that is a product that the rest of the world actually wants. Wouldn't it be sweet to return full circle - a nation of farmers... again. (ruled by the financial elite financed by Uncle Ben of course) Ben, can the automotive and airline workers give you their junk debt so you can give them treasuries in return for a "rollover" loan that last "until credit markets return to normal" (i.e. could be forever). Or is that just reserved for the NYC elite? I mean it would probably be a nice touch to do and lift the burden from all these people - debt for cash - it works in corporate America - why not for the little people? Just asking.

And the service economy beats on.... the pooring of America, and elimination of the middle class right along with it. [Do the Bottom 80% of Americans Stand a Chance?] Two Americas, with kudos to John Edwards, is not only thriving, its accelerating. Conclusion: buy stocks, they don't need Americans.

Short the service economy

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