Hi Yupette,
If Arlington County Government wants to build shared-street light rail it should look at the significant safety hazard that would pose to pedestrians and bicylists.
Cindy
Tuesday
Friday
County's Board's Pet Developer Defaulting on Underwater Properties
Hi Yupette,
Did you notice the article in the Wall Street Journal on August 25th about commercial property owners defaulting on mortgage payments for "underwater properties"? According to the Journal a prime player is the Arlington County Board's pet developer - Vornado Realty, which I believe owns and manages the County office building at 2100 Clarendon Blvd.
Joan - 22207
Did you notice the article in the Wall Street Journal on August 25th about commercial property owners defaulting on mortgage payments for "underwater properties"? According to the Journal a prime player is the Arlington County Board's pet developer - Vornado Realty, which I believe owns and manages the County office building at 2100 Clarendon Blvd.
Joan - 22207
Wednesday
Bloomberg story
See a quote of me in Bloomberg, on Honda. But I also suggested that the reporter, Alan Ohnsman, call Toshi Amino -- the quotes of Toshi are much more central to the topic. With US$1.00 = ¥84.24 [and €1.00 = ¥106.66] this morning (10am EDT on 25 Aug), Honda's strategic position of "make where you sell" looks pretty good compared to Toyota's heavy export orientation.
Mike Smitka
Tuesday
Taking It In(house)
Automotive suppliers in North America continue to face many challenges. First, they are capital constrained at a time when the “factory” is trying to build more vehicles – it is not just the odd “hot” car that is in short supply, it is entire brands. Second and surprisingly, the past 18 months’ turmoil facilitated new entry. The French firm Faurecia is an example, since it was (at least in relative terms!) cash-rich and scooped up several suppliers that were in temporary trouble. That immediately expanded Faurecia’s customer base, and since they (like many suppliers) are emphasizing new technologies, such access to the purchasers and engineers at target customers is important.1 Finally, at least in the United States, there remain both incentives to as well as increased potential for assemblers to pull work in-house.
Ford is explicit in this. Mark Fields, their President for the Americas, notes they will add 635 jobs to undertake work currently done by suppliers (Automotive News, 9 August 2010, p. 8). This represents a reversal of trends over the past 15 years, when among other things GM and Ford spun off the bulk of their parts operations into (respectively) the supposed-to-be-independent firms Delphi and Visteon. Both ended up in Chapter 11, and in both cases their former parent companies bought back or otherwise propped up some of the factories they had spun off. Now GM appears to have found purchasers for some of those (e.g., the former Saginaw Steering), but they remain the lender of last resort to more suppliers than they would like. So not all of the reversal was undertaken willingly, and thus may in due course be reversed. However, Ford in particular continues to have the issue of legacy costs, since it did not go through bankruptcy. If it can avoid offering early retirements and rehire some of those on extended layoff, then those “legacy” costs fall on a per-vehicle basis.
At the same time, the UAW made major concessions, permitting two-tier wage structures. That means that bringing work in-house is more attractive as a commercial proposition, particularly when suppliers are unionized or otherwise have a labor cost approaching that of new “Detroit 3” hires. Ford has already pulled work in-house. Locally, the Strasburg VA facility of International Automotive Components used to make door panels for the F-150, at the rate of one every seven seconds; Ford now does that work itself. Labor costs weren’t the only issue; at the northern end of the Shenandoah Valley, the Strasburg plant is no longer well-placed geographically, as all the east-coast assembly plants, including the former Ford truck plant in Norfolk, VA, are now shuttered.2 Now none of the plant’s customers are within an 8-hour drive. Indeed, most of their output gets exported to Ontario, a long haul from here, made worse by the need to skirt first mountains and then Lake Erie.
Now at another level the organizational structure that made albatrosses of the plants handed over to Delphi and Visteon remains. In-house suppliers will remain unionized, and executives will have incentives to “game the system” by skewing head counts and pushing for internal transfer prices that cloud the real costs of such operations. Furthermore, it is very hard to create incentives that encourage innovation, absent arms-length price setting for transactions and wage setting that need not follow larger corporate norms. So how well things will work really is an issue of management discipline. In the early days of GM under Alfred Sloan, senior management had hands-on engineering and operational experience. They could and did intervene, even while implementing a structure of divisionalization that on paper tasked senior executives with strategic tasks and divisions with operational tasks. But once the locus of power shifted to finance–an inevitable trend as that’s the only common language shared by the divisions of large corporations–then things gradually deteriorated. Shifting work to “out-house” suppliers was, uh, something that smelled bad to all concerned: the line executives, the unions, engineering staffs and even corporate staffs, threatening power and perks. Costs (and in the old days, quality problems) could be passed on to the assembly operations and the customer.
Those concerns aren’t central in the short run of one or two model cycles–as long as the wage gap between incumbents and new hires does not create too much friction. To the extent that new hires work in new operations, Ford and others can finesse that, because they can keep the two groups from mixing. Where such control issues are a problem may ironically be Toyota: over the past two decades, it has had a hard time finding places to invest its hoard of cash. One thing it did do was build up stakes in suppliers, which it believed (with some justification!) would offer better returns than Japanese financial markets. Furthermore, growth was at Lexus. Rumors I’ve heard in my wanderings among suppliers make me suspect that the pressure to pinch pennies fell by the wayside–plus engineers and purchasers were just plain busy, and watching costs took time they didn’t have.
The Detroit 3 should not emulate Toyota. Instead, they should let suppliers be suppliers.
Ford is explicit in this. Mark Fields, their President for the Americas, notes they will add 635 jobs to undertake work currently done by suppliers (Automotive News, 9 August 2010, p. 8). This represents a reversal of trends over the past 15 years, when among other things GM and Ford spun off the bulk of their parts operations into (respectively) the supposed-to-be-independent firms Delphi and Visteon. Both ended up in Chapter 11, and in both cases their former parent companies bought back or otherwise propped up some of the factories they had spun off. Now GM appears to have found purchasers for some of those (e.g., the former Saginaw Steering), but they remain the lender of last resort to more suppliers than they would like. So not all of the reversal was undertaken willingly, and thus may in due course be reversed. However, Ford in particular continues to have the issue of legacy costs, since it did not go through bankruptcy. If it can avoid offering early retirements and rehire some of those on extended layoff, then those “legacy” costs fall on a per-vehicle basis.
At the same time, the UAW made major concessions, permitting two-tier wage structures. That means that bringing work in-house is more attractive as a commercial proposition, particularly when suppliers are unionized or otherwise have a labor cost approaching that of new “Detroit 3” hires. Ford has already pulled work in-house. Locally, the Strasburg VA facility of International Automotive Components used to make door panels for the F-150, at the rate of one every seven seconds; Ford now does that work itself. Labor costs weren’t the only issue; at the northern end of the Shenandoah Valley, the Strasburg plant is no longer well-placed geographically, as all the east-coast assembly plants, including the former Ford truck plant in Norfolk, VA, are now shuttered.2 Now none of the plant’s customers are within an 8-hour drive. Indeed, most of their output gets exported to Ontario, a long haul from here, made worse by the need to skirt first mountains and then Lake Erie.
Now at another level the organizational structure that made albatrosses of the plants handed over to Delphi and Visteon remains. In-house suppliers will remain unionized, and executives will have incentives to “game the system” by skewing head counts and pushing for internal transfer prices that cloud the real costs of such operations. Furthermore, it is very hard to create incentives that encourage innovation, absent arms-length price setting for transactions and wage setting that need not follow larger corporate norms. So how well things will work really is an issue of management discipline. In the early days of GM under Alfred Sloan, senior management had hands-on engineering and operational experience. They could and did intervene, even while implementing a structure of divisionalization that on paper tasked senior executives with strategic tasks and divisions with operational tasks. But once the locus of power shifted to finance–an inevitable trend as that’s the only common language shared by the divisions of large corporations–then things gradually deteriorated. Shifting work to “out-house” suppliers was, uh, something that smelled bad to all concerned: the line executives, the unions, engineering staffs and even corporate staffs, threatening power and perks. Costs (and in the old days, quality problems) could be passed on to the assembly operations and the customer.
Those concerns aren’t central in the short run of one or two model cycles–as long as the wage gap between incumbents and new hires does not create too much friction. To the extent that new hires work in new operations, Ford and others can finesse that, because they can keep the two groups from mixing. Where such control issues are a problem may ironically be Toyota: over the past two decades, it has had a hard time finding places to invest its hoard of cash. One thing it did do was build up stakes in suppliers, which it believed (with some justification!) would offer better returns than Japanese financial markets. Furthermore, growth was at Lexus. Rumors I’ve heard in my wanderings among suppliers make me suspect that the pressure to pinch pennies fell by the wayside–plus engineers and purchasers were just plain busy, and watching costs took time they didn’t have.
The Detroit 3 should not emulate Toyota. Instead, they should let suppliers be suppliers.
----
Notes- I am a judge for the Automotive News PACE supplier innovation competition, doing vetting visits to 2-3 finalists a year for the past 15 years. During that time innovation went from undertaken reluctantly and irregularly because the product line or company was at risk to a core (or the core) element of corporate strategy.
- See joint work by James Rubenstein of Miami [of Ohio] University and Thomas Klier at the Chicago Fed, check the link at right for several working papers and Fed publications.
Mike Smitka
Monday
Why I'm Voting for Ron Fisher for Congress
Hi Yupette,
If you didn't see the front page of today''s NY Times, you should:
Pakistanis Tell of Motive In Taliban Leader's Arrest
Officials Say Spy Agency Sought to Squelch Militants' Peace Talks With Afghans
By Dexter Filkins
ISLAMABAD, Pakistan
When American and Pakistani agents captured Abdul Ghani Baradar, the Taliban's operation commander, in the chaotic port city of Karachi last January, both countries hailed the arrest as a breakthrough in their often difficult partnership fighting terrorism.
But the arrest of Mr Baradar, the second-ranking Taliban leader after Mullah Mohammad Omar, came with a beguiling twist: both American and Pakistani officials claimed that Mr. Baradar's capture had been a lucky break. It was only days later, the officials said, that they finally figured out who they had.
Now, seven months later, Pakistani officials are telling a very different story. They say they set out to capture Mr. Bradar and used the C.I.A. to help them do it, because they wanted to shut down secret peace talks that Mr. Baradar had been conducting with the Afghan government that excluded Pakistan, the Taliban's longtime backer.
"We picked up Baradar and the others because they were trying to make a deal without us," said a Pakistani security official, who, like numerous people interviewed about the operation, spoke anonymously because of the delicacy of relations between Pakistan, Afghanistan, and the United States. "We protect the Taliban. They are dependent on us. We are not going to allow them to make a deal with Karzai and the Indians."
Yupette, it's been obvious to me for years that Bin Laden and the senior Taliban commanders are worth more alive than dead to the New Democrats and NeoCons who are ruining American with warfighting in the Middle East. I'm voting for Ron Fisher for Congress. Ron will help get us out of fighting ruinous wars with Third World nations.
Joan 22207
If you didn't see the front page of today''s NY Times, you should:
Pakistanis Tell of Motive In Taliban Leader's Arrest
Officials Say Spy Agency Sought to Squelch Militants' Peace Talks With Afghans
By Dexter Filkins
ISLAMABAD, Pakistan
When American and Pakistani agents captured Abdul Ghani Baradar, the Taliban's operation commander, in the chaotic port city of Karachi last January, both countries hailed the arrest as a breakthrough in their often difficult partnership fighting terrorism.
But the arrest of Mr Baradar, the second-ranking Taliban leader after Mullah Mohammad Omar, came with a beguiling twist: both American and Pakistani officials claimed that Mr. Baradar's capture had been a lucky break. It was only days later, the officials said, that they finally figured out who they had.
Now, seven months later, Pakistani officials are telling a very different story. They say they set out to capture Mr. Bradar and used the C.I.A. to help them do it, because they wanted to shut down secret peace talks that Mr. Baradar had been conducting with the Afghan government that excluded Pakistan, the Taliban's longtime backer.
"We picked up Baradar and the others because they were trying to make a deal without us," said a Pakistani security official, who, like numerous people interviewed about the operation, spoke anonymously because of the delicacy of relations between Pakistan, Afghanistan, and the United States. "We protect the Taliban. They are dependent on us. We are not going to allow them to make a deal with Karzai and the Indians."
Yupette, it's been obvious to me for years that Bin Laden and the senior Taliban commanders are worth more alive than dead to the New Democrats and NeoCons who are ruining American with warfighting in the Middle East. I'm voting for Ron Fisher for Congress. Ron will help get us out of fighting ruinous wars with Third World nations.
Joan 22207
Thursday
Baghdad Installing 21st Century Solar Powered Street Lighting
Hello Yupette,
My brother just returned from Iraq. He visited me in Arlington and was amazed that 21st Century solar powered street lights are being installed in Baghdad while Arlington's street lighting system is 50 years old and he could not find my house because the street lighting in my neighborhood is so poor.
Marena
My brother just returned from Iraq. He visited me in Arlington and was amazed that 21st Century solar powered street lights are being installed in Baghdad while Arlington's street lighting system is 50 years old and he could not find my house because the street lighting in my neighborhood is so poor.
Marena
Tuesday
Moran's Expensive Constituent 'Newsletter', What a Hoot.
How much did the taxpayers pay to produce, print, and mail Congressman Moran's lavish constituent brochure? BTW, Congressman, the photo of Key Bridge on the back cover was taken in the District of Columbia.
Fed Up Dem
Fed Up Dem
Friday
NTSB Report Indicates Zimmerman Was Grossly Negligent Re MetroRail Safety
Hello Arlington Yupette Bloggers -
I have to conclude, after reading the NTSB report, that long-time WMATA Board member Chris Zimmerman was grossly negligent during his tenure on the WMATA Board for ignoring major MetroRail safety problems and concentrating instead on Metrorail "cosmetics".
Comments?
No Longer a Metro Rider
I have to conclude, after reading the NTSB report, that long-time WMATA Board member Chris Zimmerman was grossly negligent during his tenure on the WMATA Board for ignoring major MetroRail safety problems and concentrating instead on Metrorail "cosmetics".
Comments?
No Longer a Metro Rider
Favola Directing Re-Paving $$$ to North Arlington
Hey, Yupette,
If you wondered why South Arlington's streets aren't being repaved it's because Marymount University's Chief Lobbyist and Arlington County Board Member Barbara Favola is directing repaving funds to Yupscale North Arlington.
Carole - 22207
If you wondered why South Arlington's streets aren't being repaved it's because Marymount University's Chief Lobbyist and Arlington County Board Member Barbara Favola is directing repaving funds to Yupscale North Arlington.
Carole - 22207
Thursday
The Simple Economics of Social Security and the Trust Fund
Post moved to HERE at our companion blog US and Economics.
Traffic Sign Funds Going to Bicycle Signs - Markings
Hi Yupette,
In case you wondered why street center lines haven't been repainted, crosswalks haven't been repainted, and Speed Limit and Stop signs haven't been maintained and upgraded it's because the money is going to paint bicycle lane markings on streets and post signs stating that bicycles can use vehicle lanes.
This is another attempt by the County Board to inflict its pet special interests on everyone. Puleeze don't tell me I have to start riding a bicycle in traffic, which is obviously Fisette's next move - exclusive lanes for bicycles only and prohibitions on motor vehicles. This is the same gang that approves 400 new parking spaces under every large building.
J.K. - 22201
In case you wondered why street center lines haven't been repainted, crosswalks haven't been repainted, and Speed Limit and Stop signs haven't been maintained and upgraded it's because the money is going to paint bicycle lane markings on streets and post signs stating that bicycles can use vehicle lanes.
This is another attempt by the County Board to inflict its pet special interests on everyone. Puleeze don't tell me I have to start riding a bicycle in traffic, which is obviously Fisette's next move - exclusive lanes for bicycles only and prohibitions on motor vehicles. This is the same gang that approves 400 new parking spaces under every large building.
J.K. - 22201
Wednesday
County Will Not Fare Well After a DOD Downsizing
Hi Yupette,
If you are not concerned about the effects of DOD downsizing you should be. The County's "tax, borrow, and spend" fiscal irresponsibility is the result of vastly increased local federal spending for warfighting, homeland security, and national security. Obviously, Arlington's "decision makers" believe that the feds will go on spending trillions in the same manner for decades. But that is foolish thinking. The federal government has ignored civilian infrastructure needs for more than a decade. And the Feds can't keep borrowing $500 billion a year for much longer. Arlington should brace itself for at least a 10% reduction in local federal spending.
Larry - 22207
If you are not concerned about the effects of DOD downsizing you should be. The County's "tax, borrow, and spend" fiscal irresponsibility is the result of vastly increased local federal spending for warfighting, homeland security, and national security. Obviously, Arlington's "decision makers" believe that the feds will go on spending trillions in the same manner for decades. But that is foolish thinking. The federal government has ignored civilian infrastructure needs for more than a decade. And the Feds can't keep borrowing $500 billion a year for much longer. Arlington should brace itself for at least a 10% reduction in local federal spending.
Larry - 22207
Friday
Neglect of Tree Canopy Ensured Destruction from High Winds
Hello, Yupette,
We had a pretty significant destruction of the tree canopy here in Fairlington when the thunderstorm went through yesterday. We have been after the County to trim street trees to reduce the wind load for years. Nothing has been done. Hundreds of County workers wre driving around in trucks surveying the damage and some trees were removed. Power was out for most of Fairlington last evening. It's going to cost a lot more repairing the damage than it ever would have cost to have maintained the street trees.
fairgrrl
We had a pretty significant destruction of the tree canopy here in Fairlington when the thunderstorm went through yesterday. We have been after the County to trim street trees to reduce the wind load for years. Nothing has been done. Hundreds of County workers wre driving around in trucks surveying the damage and some trees were removed. Power was out for most of Fairlington last evening. It's going to cost a lot more repairing the damage than it ever would have cost to have maintained the street trees.
fairgrrl
Thursday
Next COG Petition - Draw Election Districts
Hi Yupette,
I signed the last Change of Government petition. I suggest starting over. But this time make things really simple, just change from at-large representation to election districts for the County Board, based on 2010 Census data, with boundaries drawn by a multi-party commission.
Regards,
Linda
I signed the last Change of Government petition. I suggest starting over. But this time make things really simple, just change from at-large representation to election districts for the County Board, based on 2010 Census data, with boundaries drawn by a multi-party commission.
Regards,
Linda
Tuesday
Arlington Street Re-Paving Will Cost More Than $100 Million
Hey, Yupette,
I saw the County Board put $14 million for street paving on this year's bond referendum. The $14 million will only repave Wilson Blvd., Clarendon Blvd., and Washington Blvd. It's really expensive to repave boulevards, up to $500,000 per mile. It's going to cost at least $100 million to put Arlington's streets and roads back into good shape.
EFC Homeowner
I saw the County Board put $14 million for street paving on this year's bond referendum. The $14 million will only repave Wilson Blvd., Clarendon Blvd., and Washington Blvd. It's really expensive to repave boulevards, up to $500,000 per mile. It's going to cost at least $100 million to put Arlington's streets and roads back into good shape.
EFC Homeowner
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