Now it's Corning--When will the carnage end?

[sudsmaster]

Corning sales down because less glass is needed for fewer TV's???

Um, the old glass hog cathode ray tube sets are pretty much obsolete. And virtually an new flat panel TV isn't made in the USA, it's made in Asia - Japan or China, mainly. I would hazard a guess that even a big 40+ flat panel LCD will contain less glass by weight than a standard 27" CRT TV.

But maybe if Corning started making "Grab-Its" again they could recoup their losses ;-)

 

[twinniefan]

The public must share some blame

Hi Laundress,
In my view the public,re:consumer HAS to share some of the blame for this economic mess we are in, you see in my experience and I have worked in retail type environments for nearly 30 years,the public want everything cheap, I now work as a store manager for a very large charity organization and believe it or not people still want to barter and haggle over our prices for our goods,imagine trying to haggle over a flipping $4.00 shirt or blouse or $6.00 pair of jeans but they do they want the best of both worlds they want top quality however do not wish to pay accordingly for it.
I dont know about the U.S. situation, but here in Australia this is why we dont manufacture washing machines anymore and very few fridges either, people only want stuff that is cheap, I recall the fridge repairman a couple of weeks ago telling me that fairly soon there will be even more Chinese cheap imports in whitegoods and they will be fairly cheap, I think he said the brands were Hisense,Centrex(which have been here awhile i think.),Hotpoint(no not the european Hotpoint a chinese version.)
Anoter poster mentioned how do you compete with $2-$3 an hour nations, well you simply cannot unless we are prepared to accept that standard of living which I think we would all find unacceptable,mind you as for here I think the unions have a bit to answer for also, wanting people to be paid penalty rates which can go up to double time and a half and of coursde we mostly get 17.5% loading on holiday pay,pricing many industries out of the market.
Senior and executive management have also contributed to this also with this mantra of a company's shareholders having to always come first and their cunstomer base a distant second and their employees an even more distant third,for example senior management here at where I work have made some really appalling decsions in the last few months, and who wears the blame and the mud the paid staff,i.e. store managers and our poor loyal volunteers, many of which I am sad to say simply gave it all away when they saw what they thought was a charity/welfare organization suddenly being run like it was a corporation.
The end result,unhappy staff/volunteers who are now leaving the organization and store now undermanned and more pressure put on the remaining staff/volunteers, this situation did not exist 2-3 years ago,we had a system which was working okay,but soem senior manangement decided they needed to hire a corporate type from a very large retail chain who thinks he can run a charity like it was a retail chain.
Cheers.
Steve.

 

[alr2903]

I am thinking, the first downfall in the avg american wallet was when you could no longer deduct credit card interest on income taxes. Part of Detroits woes per Mr. Rick Wagoner is banks won't finance cars anymore. Auto loan interest is no longer deductible. Our last deduction is mortgage interest on home mortgages. So the banks have got the bail out, they are very slow to loan money according to the New's. The mortgages are adjustable rate that really caused this real estate bubble mess, and evidently, if you miss a payment the credit card interest rate is phenomenal. I hope Tim Geithner regulates the deregulated banks, IMHO they are totally out of control. JEFFG, U Sir are right we would scramble a good while for tennis shoes and TV's nothing is made in the USA, We have tree hugged and unionized wages till our jobs and goods are priced out of the market. What percent of the PARTS of a Cadillac or Chevy are actually made in the USA? Its an American car assembled from foreign components, at best. Our last 2 Buicks were assembled in Canada, Our little Chrysler was made in Mexico. I really am praying this mess is soon behind us. signed not bright enough to fix it.... but bright enough to see it.

 

[launderess]

No one has ever held a gun to a bank's head and forced t

Err, yes they have.

The federal and local governments have long leaned on banks via various laws and regulations to make loans and give credit in not just prime areas, but low income and disadvantaged as well. This included mortgages, just look it up.

JeffG, as for the balance of that post, you are simply just flat out wrong. Do some research and you will find most Americans are living vastly over their means, which is why the current credit crunch is causing so many woes to the economy and why the federal government is leaning on banks and other issuers of credit to loosen the mouse trap.

One of the reasons the economy is doing so poorly is that many Americans simply aren't spending or cannot. Persons used to running up huge credit card debt, then paying the minimum each month, only to charge right back up again, are finding their limits lowered, if the card is not closed down totally. Or, as another poster stated, their interest rates go through the roof.

Yes, part of the reason is wages on average have not kept pace with inflation these past few generations, but there is also the fact persons believe it is there right to not only own a home, usually one much larger than they can afford, but to furnish said home with everything top of the line under the sun. Worse, as credit card interest is no longer a tax deduction, they used home equity loans to pay for everything from trips to Europe to meeting day to day bills.

Americans have the lowest savings rate in the Western world, and vastly lower than most Asian countries. Instead of saving persons spend or charge on credit. Problem with credit is unless you can pay the notes in full each month, or very quickly, you are transferring your wealth to someone else. Same as what is going on with the Feds printing money like mad. Sooner or later those notes will come due, and our children, grandchildren and generations to come will have a reduced standard of living for paying off this debt.

If you listen carefully to Obama and the rest, they only speak of getting the country over this current mess, they are quite silent about what the future and for good reason, no one has a clue what they are going to do to no only grow the economy, but pay down federal debt without starting another bubble.

As I stated previously, no where in the world do you have a populace and economy so reliant on cheap and easy credit as in the United States. As this has come to a crashing end, many a person will finally have to live off what they earn, or else.

 

[jeffg]

Even in government chartered programs like Fannie Mae and Freddie Mac, banks were never *required* to make a loan to anyone. Deregulation simply *allowed* these institutions and banks to make loans to people that they knew were unqualified, and would not be able to repay. So why did they make these loans? Because in most cases loans were resold to other companies immediately after they were made, putting the original lenders out of harm's reach and eliminating their risk. Deregulation caused this catastrophe (try Googling "Foreclosure Phil"), not evil greedy consumers.

As for rates of saving and credit card balances, these problems are primarily a result of outsourcing. Most people I know today are making 1/4 to 1/2 as much as they were 15 years ago, because their jobs were sent overseas or to Mexico. One of the most brilliant hardware designers I've ever met is now pumping concrete to make a living, at 1/4 his old salary. What people should do to adjust, and what they can do is sometimes not the same thing.

 

[andrewinorlando]

Jeff, that's plain BULLSHIT! Like I said, it comes down to individual responsibility. PERIOD. You borrow the money and you don't know you can't afford to pay it back??? Give me a break. Back to my point - INDIVIDUAL RESPONSIBILITY. Problem with this country is everyone looks to blame the "system". Take responsibility for your own actions. You borrow, you pay. Simple. This crap where all of these people who got in over their heads are being "bailed out" and having their "mistakes" forgiven is the biggest load of crap I've ever seen. Give me a f'n break.

 

[dalangdon]

I think a big part of the problem is that CEO's and upper managers lost track of what it was they were supposed to be doing: Instead of producing quality widgits, they concentrated on making sure the Widget's stock was high performing - at least for that quarter.

They also had a a thing for constructing big ugly trophy buildings, rather than focus on what it was their company actually did, but that's a whole other story.

This was a big departure from previous generations where upper management usually came from the ranks and were not usually compensated with company stock - at least while they were working at the company.

Another problem is that boards of directors have been cross-pollenated with other CEO's, along with compensation committees. This is how the idea of a multi-million dollar salary became accepted. Sort of like how the mortgage companies and bankers colluded to drive up the value of homes far beyond the supportable market prices. After all, they didn't care if people had the money to pay the mortgages - they were just going to pass the mess along, and sell it as securities.

 

[bajaespuma]

I beg to differ...

Hey, how 'bout that spiffy new 50 million dollar luxury jet Citibank top execs just bought for themselves after their government bailout check arrived.

American top executives have become psychotic with greed and entitlement. They have to be extirpated.

 

[toggleswitch2]

Fear and greed are tremendous motivators .

~Outside of the United States, credit as one knows it simply does not exsist. If one was in France, try using your debit card or credit card to purchase more than what was either in your bank account, or limit. The transaction simply will be declined...

In Greece going "overlimit" is considered theft and you will be arrested.

Similarly IIRC there is no such thing as a mortgage as we know it (secured by the real estate). But you can get a home loan which, AFAIK is unsecured. This tends to keep the price of homes relatively lower, (Read: more affordable) since large downpayments don't grow on trees. Speaking of the 1950's one could buy a home on one income. Now, since many families have two income-earners, this has had the long-term effect of raising the price of homes such that two incomes are now required (at least in my market) to own a home. GOne are the days (in my area) of a mosdest home being [equal to or lees than] 3 to 4 times one's annual income.

Ya know thre are two sides to every coin, and as usual the blame-game is now being played to pin this economic mess on someone or something. How about this: the SUM TOTAL of the mentalties and systems involved made this mess.

Not all executives are evil, nor are all benevolent. However misappropriation of corporate funds is s crime. Period. And if businesses and industries are not going to be self-regulating (to maintain the public trust and overall economic stability) the government will HAVE TO step in and start setting limits.

That little farm in the middle of nowhere with a wood-burning stove and some land to grow my own food looks better and better all the time.

Rant over.

 

[toggleswitch2]

...and as far as all these layoffs go, one can be 100% sure a great deal of it is an excuse to fire the expensive and hire the less expensive (over time).

Too bad companies are not judged/rated in terms of:

environmental resposibility
social responsiblity
jobs created / maintanied
energy efficiency

etc.

because pure price-per-share, earnings-per-share, etc. are motiviating some nasty repercussions and activities, IMHO.

 

[toggleswitch2]

oh, and another thing. (Sorry kids Dorothy and I [Yes, I am a friend of Dorothy's] are off to see the wizard to get me a brain).

And as far as those clauses go.. "Do this that and the other-thing to get your bonus" also gives rise to some nasty transactions as well.

 

[iheartmaytag]

Now Boeing

They announced a workforce reduction of 10,000 for 2009. If this keeps on we will be the Air-Capital in name only.

Before I get shot for this I want to say, I was raised in a Union house and my Dad was a 35 year Employee of Boeing (Union). But I think the unions are somewhat responsible for this recent layoff. They had a big strike that lasted almost two months Oct-Dec. They turned down a $5,000 sign-on bonus a guaranteed 4% pay increase and they held out for more. So they cost the company up in the millions a day, delayed the 787 projected deliveries and now cost their fellow members their jobs. Don't they think that the company is going to make up their losses somewhere?

According to this morning's Wichita Eagle, Boeing only delivered 50 planes in 2008, down from the 112 in 2007 they attribute some of this to the decline in the commercial airline business and some to the strike.

http://www.kansas.com/news/breaking/story/679797.html

 

[jeffg]

> How about this: the SUM TOTAL of the mentalties and systems involved made this mess.

I'll never buy the claim that consumers are to blame for this situation. If you put your hand out and offer a dollar bill, someone is going to take it. There's nothing new or different about that fact, and it's not going to change in the future.

But I agree there's not much point in arguing about it. Time will tell who was to blame, and whether this mess is just a normal recession and/or correction, or if it's just the start of something much worse and more permanent.

What angers me more than anything is how so many Americans (and their elected representatives) have offered their backsides to multinational corporations who have no concern for or loyalty to our country, and are only too happy to see our way of life permanently destroyed. A few weeks ago I saw Dick Durbin having a press conference, and he was saying he was soooo happy that Citigroup agreed to a certain piece of legislation. I almost put my foot through the TV. We just went through eight years of this nonsense. Republican or Democrat, it doesn't matter: it's government by the corporation and for the corporation (but not of the corporation).

We're 150 years overdue for another revolution.

 

[danemodsandy]

Launderess:

I certainly don't want to try and refute every point you've made here, but there is one I want to speak to: motion picture salaries for stars.

It is irrefutably true that movie stars make outlandish amounts of money - per picture - compared to most of us. And there are certainly a lot of cases - and more of them all the time - where such salaries would seem to be unjustified. But in the case of stars whose movies really do make tons of money for studios, the average member of the public has little idea of what such salaries represent.

To begin with, while a movie studio puts a lot of money, time, effort and talent into a motion picture, the public could not care less about those factors. What the public comes to see is stars. A star's indefinable "something" is what makes the whole enterprise of making motion pictures financially possible. If you doubt me, try raising money to make a movie starring your Aunt Hattie, then try again with one starring Angelina Jolie. The presence of a truly popular star is money in the bank; within the industry, such stars are literally known as "bankable."

Owing to many factors - including the fickleness of the public and the ever-present possibility that a movie that looked good in script form will turn out to be a turkey, stars put their careers on the line with each new movie; the long-term contracts of the Classic Era are long gone. In fact, the average period of real "bankability" for stars is seven years. A good actor may make decent, even good money before and after that time, but the big bucks are compressed into that time frame.

A star's expenses are high. Agents take between ten and fifteen percent off the top. There are union dues, and the charitable contributions expected of stars to industry charities such as the Motion Picture Country Home, an eldercare facility for movie people who can no longer provide for themselves. Such huge chunks of salary coming in that short seven-year time frame mean that a star can end up paying some of the highest possible tax rates. Industry events are costly to attend, with travel and appearance issues eating up lots of money. Stars must, in these difficult and dangerous times of ours, live in highly secure environments, which costs more than most of us can imagine. People like publicists, financial advisors, governesses, personal assistants and housekeeping help are an absolute necessity for a top star; there is no time whatever for a star to take care of such things personally while working.

Essentially, if an actor is fortunate enough to become a genuinely bankable star, much of his or her earnings will evaporate in taxes and expenses. The ride won't last long. And it can all vanish with one bad stinkeroo of a movie. We won't even go into all the ways in which a lifetime of earnings can be stolen from stars, but it happens with disconcerting regularity.

I would be the last person to disagree that there are some outrageously overcompensated people in the entertainment field today (Paris Hilton, anyone?), but an honest-to-Pete movie star - one who is actually bringing in the bucks to justify their price tag - has to put his or her entire career on the line with every project, is going to spend a fortune on expenses, and deserves to be compensated accordingly.

 

[mattl]

I think a big part of it perception.

I look at Tom Cruise or Angelina and I feel they should get what they can for each picture, they are putting themselves on the line, it is their face on the screen.

On the other hand I despise corporate CEOs for the most part. They get the big bucks by eliminating jobs, cutting wages, outsourcing. All these things hurt PEOPLE. The more the CEOs do it the more they get paid, their money comes on the backs of others. If these people choose to innovate and actually add value to something I don't think I or many others would feel as much anger at them as we do.

It seems the ONLY answer to falling profits is to cut people not come up with a new or better product. There is a part of me that would like to see the CEOs and Board of Directors of all the banks getting bailouts flogged in the public square.

 

[neptunebob]

Corning not the only one affected by TV..

Just after Christmas we lost the Sony plant in Westmoreland county, about 1700 people will lose their jobs. The plant used to make the rear-projection large screen TVs that I guess are obselete now.

This is the third time this facility has had a business that had and laid off a large number of jobs. In 1968 Chrysler built the place, but almost and never finished it. 10 years later, Volkswagen bought the plant, called it Volkswagen Westmoreland, and manufactured the Rabbit and Golf there, but in 1988, decided to close the plant. The next year Sony created the Sony Technology Center to make the TVs and even the glass that is used to make the picture tubes. Right now, Governor Rendell is trying to figure out who he can sell the place to.

 

[andrewinorlando]

Jeff - you are right - the sum total!! BUT, it is a question of the chicken and the egg. Which came first? The demand for the product has to be there before any organization can begin to make that available. And that demand has to grow and morph into a bigger and bigger monster that wants to be fed.

No matter what anyone says/thinks/does, the bottom line is that the credit crunch is a direct result of consumers who cannot/will not repay loans secured on property. And if banks are not certain folks will pay, they won't lend money. And it's really as simple as that. Money not available? Goods and products cannot be purchased that are traditionally financed by loans.

Think of it this way - if your friend/brother/sister borrows money from you, say $1000, and never pays you back or even offers to pay you back, then comes to you and asks to borrow yet another $1000, are you going to really loan it to them?? Is this a loan at this point? Or a gift? Whatever goods that person would have spent that money on will now not be able to be purchased. Now multiply that by billions, and you have today's credit crunch and resulting economy. Banks are afraid of their customers!

 

[mattl]

Either I'm surrounded by a group of very conscientious people or the perception that some here are espousing is wrong. I do not know ANYONE who ever bought a house or used a credit card or bought a car that did not intend to pay for or couldn't pay for the item. There might be a handful of people that fit that profile, but in no way can I believe that that is what caused this mess. Even if situations changed the people I know are making every effort to pay their bills.

I feel a big contributor to the current situation was the high fuel prices of last year. How much money was simply sucked out of the economy by the speculators that unnecessarily raised oil prices. Even now with prices back in line companies have not reduced their prices to reflect the lower costs. If you couple that with shady lending practices, regardless of what some here say banks did NOT have a gun to their head to give those loans, you have what amounts to a "perfect storm".

If you add in that you can't build an economy on consumer spending and at the same time take away the good paying jobs that allowed the economy to grow, the problem is amplified. Who took away the good paying jobs? Corporate management chasing the almighty stock price. Ship the jobs to Mexico or China and turn out a crappy product, who cares? If that is all that's available on the market so what?

In the end I put so much of the blame on a crop of @#$@#!% MBAs that came out of the greedy '80s and spread out across this country like vultures, and in the end destroying a basic fabric of this country.

Perhaps the rallying cry of the next revolution should be "Death to MBAs and CEOs".

 

[alr2903]

Hey remember in the late 80's early 90's the word on the street was we are leaving the "industrial age" and entering the "information age", Well "Yes We did", and the information is, The United States is broke or almost Broke. MattL, i think some folks have never lived in a community where the primary employer(s) just up and left. That said, lets move Government from Washington D.C. to Detroit so we can keep an eye on em. Detroit needs jobs just a thought.

 

[jeffg]

> I do not know ANYONE who ever bought a house or used a credit card or bought a car that did not intend to pay for or couldn't pay for the item. There might be a handful of people that fit that profile, but in no way can I believe that that is what caused this mess. Even if situations changed the people I know are making every effort to pay their bills.

Exactly. Credit card defaults in the U.S. have always been in the 2-3% range, and even in the middle of the current recession, more than 93% of us are still paying our bills every month.

Even with home mortgages, 4 out of 5 in the U.S. are being paid in full and on time. More than one-third of all mortgage defaults in the U.S. have occurred in one state: California.

As I said before, blaming consumers for a collapse of lending standards and corrections in the housing market is not only incorrect, it's ridiculous. In fact, with the overwhelming amount of pressure put on consumers every second of every day to buy, buy, and buy some more, what's amazing is the amount of constaint shown by consumers.