Howzit Howard

What GM teaches us about baby boomers

U.S. automakers are in trouble because (1) they're out of step with what the public wants, and (2) they pay their workers more than Japanese automakers do at their own U.S. assembly lines, and (3) they pay vast sums to former employees who don't contribute to production any more because they're retired. It has occurred to me that there is a lesson in that for the entire country as baby boomers approach retirement age, since we constitute the single largest age group of the U.S. population and most of us have got this idea that we'll all be retired one day. Let me take a moment to explain the back story for twentysomethings. The U.S. population grew only slowly before World War II. There was a global influenza epidemic in 1919 that killed millions of people worldwide in a matter of months. Then came the Roaring Twenties, when some people were too busy drinking to settle down -- like the Sixties but apolitical, with people getting blotto on bathtub gin while listening to jazz instead of doing blotter LSD while listening to the Moody Blues. Then came the Great Depression, when people postponed families for financial reasons and more children died young from illness due to lack of money for medical care. Then came World War II, when the most robust men and more than a few of the robust women were "over there." When World War II ended, the economy is strong, the national mood was good, you could buy a home for $3,000, and there was a lot of marrying and conjugality, with the inevitable result: the egg in the demographic snake, the biggest boom in U.S. population growth in more than a century, a generation of "Leave It to Beaver" watchers, hula hoop twirlers, Hardy Boys and Nancy Drew readers, and Instant Breakfast drinkers. I was born in 1953, entered the first grade in 1959, and got to junior high school in 1965. I remember when Pop-Tarts were new, and came in cinnamon and strawberry -- when high-quality cartoons like Road Runner gave way to cheap ones like Johnny Quest -- when 7-Elevens opened at 7am and closed at 11pm -- when rock music started to appear on FM radio -- and when it got out that Detroit believed in "planned obsolescence." Now I'm 55 and some of the earlier baby boomers are already retiring. Not so many yet. Many baby boomers, like me, still enjoy good health, enjoy working, and don't really WANT to retire. I'd like to have a little more free time to pursue my hobbies and write books, but the traditional picture of retirement as some kind of Mister Rogerslike besweatered quietude holds no appeal to me whatever. And there are many babyboomers for whom it doesn't really matter if they want to retire or not because they never saved much money, or their savings were much eroded by the shenanigans of those thieving Wall Streeters and those con artists masquerading as mortgage sellers, and they can't afford to retire. Even so, as baby boomers age, at some point tens of millions of Americans will be retired, no longer productive as far as the economy is concerned, but still drawing social security and still a drag on resources when they get sick. Just as General Motors is being dragged down by its retirees (by its failure to anticipate and plan for the increasing need for cash to meet pension requirements) so is America on the verge of having a similar situation.

Can Hawaii cure your ills?

West Nile Virus can cause encephalitis (a $15 word that means brain fever) that sickens most people and kills the young, the old, and the immuno-compromised. It is known to have existed on the North American mainland for only 10 years yet is has already afflicted 25,000 cases, more than 1,000 of them fatal, and those are just the ones we know about. Birds carry West Nile, sometimes without getting sick -- it depends on the species, and mosquitoes vector it from birds to humans. When West Nile turned up on the Atlantic Seaboard in 1999, officials took time out from their busy schedule of scaring us about Y2K to urge people to eliminate the standing water in which mosquitoes breed (the water that accumulates inside a spare tire, on in a rainspout clogged with leaves.) There has been sentiment by health officials for some time that West Nile could easily and suddenly become a lot worse, even without mutating, if for some reason we had a season with a lot of mosquitoes when people were weakened by the last round of flu or something. Enter Hawaii Biotech Inc., which announced Monday it has completed dosing healthy subjects in a safety study of its new West Nile vaccine. CEO Elliott Parks said preliminary data from 24 subjects suggest the drug is safe. Complete safety and immunological data will be done by a third quarter of next year. Parks described the vaccine as "nonreplicating and designed to be safer than live-attenuated vaccines." Hawaii Biotech is also working on a vaccine for dengue fever.

A really big shoe

"The shoe of the century," one Baghdad resident said. By now you've seen the video. A Baghdad television reporter, so little-known he has only been kidnapped once, threw his shoes at President Bush during a news conference. In Arab culture this is a lot more insulting than it is to us. (Though my colleague Steve Uyehara challenged us to come up with a culture in which it would NOT be insulting to fling footwear.) The president showed quick reflexes, as if he had been preparing for this for years. After his term is over he could get a job as a Secret Service agent! Maybe he could replace one of the agents who were so slow to respond. I haven't been a big fan of this chief executive, but somehow it pleased me to see his reaction to wingtips on the wing. Not only did he duck smartly, but he seemed genuinely amused. That's good. You don't want a commander-in-chief whose temperament would produce any other reaction to this. The reporter later said he was angry about all the people who have died in the U.S. invasion and occupation of Iraq. Well, that's understandable. We invaded a country that had nothing to do with 9/11, believing it did, and toppled a dictator who did not have weapons of mass destruction, believing he had. We promised to bring peace and didn't. Iraqis are justified in being upset, but we Americans should also be upset. We bungled a couple of key things over there, and we need to face up to it in case we need to pull off an operation like this someplace else. Here are two key things we got wrong:

• Insufficient oversight of security contractors. One company that essentially hired mercenaries to help police Iraq made things worse. Iraqis hated them, and, significantly, U.S. military personnel thought they were a bunch of cowboys. These oafs created more hatred and risk for Americans, thus further endangering actual soldiers. (UPDATE: The Associated Press reports the State Department is recommending that the company's contract, which expires next year, not be renewed.)
• Mismanagement of rebuilding efforts. No single department or agency was in charge, and, despite the presence of the aforementioned cowboys, no one stopped local mobsters from siphoning off a lot of the reconstruction money. Remember the Marshall Plan? In Iraq we've proven we no longer have the know-how to pull off something like that.

If you aren't aware of these things, check it out. And if the shoe fits... Postscript. Late night talk show hosts had a field day with the shoes thrown 'round the world. Leno called the reporter a "shoe-icide bomber." Letterman complained that when the reporter bought the shoes at Payless "they didn't even do a background check." Conan O'Brien said when the reporter dies he'll be greeted in heaven by 72 podiatrists. Craig Ferguson said the shoes were as close as we'll get to finding weapons of mass destruction in Iraq.

The moving target of Detroit wages

The Big Three U.S. automakers claim they have been wounded by unfair comparisons of their wages to those of Japanese automakers with U.S. assembly lines. However, it turns out that they shot themselves. The issue is how much employees of General Motors, Ford and Chrysler make compared to employees of Toyota and Honda. We were told the difference was between $40 an hour (Japanese automakers) and more than $70 an hour (U.S.-based automakers). The numbers, it turns out, were provided by the U.S. automakers themselves. In briefing papers aimed at getting a bailout, they added up wages and fringe benefits, then, for good measure, they added in the benefits they pay to past workers who are retired. All of this added together, adds up to anywhere from $70 to $77, depending on which automaker you're talking about. The New York Times dialed that out to compare apples to apples and found that the Japanese automakers with plants in America pay roughly $45 an hour in wages and benefits while the U.S. carmakers pay roughly $55 an hour. So when the confusion is removed, employees of the financially-troubled American automakers still make a lot more than employees of the healthier Japanese automakers. The United Autoworkers union has refused to accept wage cuts, which is why Senate Republicans killed the bailout bill. O.K. Let it happen in bankruptcy, then, where automakers have the power to reject labor contracts altogether. These people need to get real or face losing their jobs altogether, with very little sympathy from other Americans, most of whom make less than half of what they do.

Where the toys are

KB Toys filed for bankruptcy this week but rather than reorganize it intends to proceed directly to liquidation, closing all its stores, including four in Hawaii. Toys 'R Us and KB Toys used to own the national toy business, the two of them having muscled smaller competitors to the sidelines. But then the same thing was done to them by Wal-Mart. One day the only competition for Wal-Mart toys will be (1) some other really large chain choosing to get into the toy business in a big way, and/or (2) boutique chains like Thinker Toys, a Hawaii business that is holding on well. Wal-Mart isn't the only remaining megaplayer. McDonald's actually hands out more toys than any other retail chain including Wal-Mart. Video games are sold by electronics stores. And then there's Amazon. Amazon is probably going to be the way I buy model trains when and if I ever find the time to get back into trains. I used to do a Christmas layoff of HO trains in my garage on the mainland -- a different layout every year, and friends came over to help build and wire it. My condo hasn't got the space for an HO gauge layout of any size -- I might manage to have three or four trains moving at one time if I switch to N gauge but it will be tight -- or maybe the key would be to work with the condo management and staff. That would solve the problem of storing the parts during the balance of the year. And they do better carpentry than I do. My model train buffs are big on reality. They like trains to move very slowly, like in real life, with the same number of cars. Some won't run a train without a "reason" and even generate paperwork like they have on real railroads. Not me. My train layouts are like my drawings: exaggerated and fun-loving. I just like to see a lot of moving parts. My garage layouts were designed with at least half a dozen discrete routes for trains. Sometimes I connected them for more complex manual operation but usually I preferred simply to set seven or eight trains running automatically and then watch them. One year I built three levels of ramps, three deep, two rising in one direction and one set descending, all hidden inside tunnels. No train disappeared into a tunnel adit without reappearing either higher or lower than the level it started from. My friend figured out how to use reed switches embedded in the tracks to automatic some switching. A magnet mounted on a caboose would trigger things -- throw a switch, kill power to one line, reverse power to another -- and miraculously a train would come flying out of a tunnel onto the same track the first train just vacated, moving the opposite direction, as if a horrible accident had just been narrowly avoided! One key to fitting a lot of trains into a small space is understanding that single-truck trolleys can make much tighter turns than other rolling stock. HO trains aren't supposed to run on any radius tighter than 15 inches but a single-truck trolley can turn a 3-inch radius if you bank it right. I hope this was more interesting than you thought it would be when I started by whining about Wal-Mart.

Following today ' s world to the letter

Each letter of the alphabet has its own personality, argued James Thurber, though these personalities may change with the times. For example, he argued, the letter G used to scare us with its ghosts and goblins and giants. But who today is scared of gargoyles, gorgons or ghouls? No, Thurber argued, today we are scared of B, the letter of burglars, buglers, blowhards and butlers. To which I would add bonds, bailouts, and bankruptcies. Thurber, to get back to him, which is how he would get back to him, wrote of a hospital stay in which he discussed this with his doctor, who was having trouble sleeping. Roles reversed as Thurber prescribed the letter N, the letter of nothing, nirvana and never-never land. It didn't work. The doctor dreamed of ninety naked night nurses and had to get up and get dressed.

In search of ways to use electricity

The usual way we think of electricity is this: it's expensive, and it usually requires oil to make, so let's use less. But some interesting exceptions have arisen lately which are worth looking at. Molokai and Lanai could generate far more wind power than these islands can themselves use. So the thinking now is to lay cables to Oahu and sell the power to Honolulu, where a fifth of the state population lives. Maui Electric this week announced a memorandum of understanding with a Los Angeles area maker of electric trucks to test their operation. What the electric company wants to test, specifically, is recharging vehicles at night, when there is always excess capacity, and perhaps even take some power back from the batteries of parked vehicles during the day if there is a lot of demand. Puna Geothermal, now celebrating 15 years of operation, produces a fifth of the Big Island's electricity needs, and could easily produce more than twice that much by drilling a second hole. But Hawaii County, which also gets power from oil-fired generating stations, wind turbines, solar panels, and even hydro, just doesn't need that much juice. And cables to Maui may not be as feasible as cables from Maui County to Oahu due to the ocean being a lot deeper in the channel between the islands. So is there anything else we could put on the Big Island to use it? One idea is to charge big batteries there. In brief, what the electrical power industry is looking at is any way to take excess power at night and use it for something, any way to take some power back during the day when it sometimes has trouble meeting demand, and any new way to take power from HERE and move it THERE.

Recession threatens news coverage

The newspaper conglomerate Gannett Co., owner of USA Today, said Wednesday its 2008 newspaper revenue was down 18%, and more job cuts were to come. You may read elsewhere that Gannett revenues are down 8%. That's for the whole company including its broadcast holdings, which got a bump from political messages in the weeks before the election. The 18% figure I'm using is the actual decline in revenue at newspapers. Gannett also owns the Honolulu Advertiser, which cut another 50 jobs in the past couple weeks. I hope this means our local paper got ahead of the curve and has already cut enough jobs to weather the economic downturn. But it's most definitely a tough time for newspapers, which were suffering from shrinking circulation even before the economy faltered. This has sweeping implications for news coverage which are rarely explained to the public, so I thought I would do that here. News coverage without newspapers would be shallower, easier to manipulate, missing more stories altogether. News coverage by newspapers has enormous impact on what is reported by other media such as television, radio, magazines and the Internet. Broadcast news organizations are well-suited for mobilizing rapidly to cover a breaking story. When the story is an event -- a fire, a news conference -- that can be captured on audio and video -- broadcasters are faster than newspaper reporters and, having taped it, less likely to get the quote wrong. But there are many other stories which only a newspaper can cover well, using a reporter who is allowed to devote several hours to talking to people or taking careful notes in a hearing or poring over court records. You need newspaper reporters to track the details of a legislative session, to make the calls necessary to keep track of the next bankruptcy hearing, to survey some residents of a community to get a sense of the depth of opposition to a proposed development. Most newspapers, television stations and radio news departments are members of the Associated Press, a cooperative news organization that has its own reporters and writers. But much of what the AP reports is the simple passing along of "electronic carbons" from member newspapers. The fewer stories those newspapers cover, the fewer stories the AP will transmit. And broadcasters rely heavily on AP news items. The more newspapers pull in their horns, the less pointed will be all news coverage, including the content in other news media.

Can racial slurs sell cars?

O.C. Welch, a Ford dealer in Hardeeville, S.C., says he has sold 15 cars at his Ford dealership after running radio commercials full of bile against the Japanese and their Toyotas. "All you people that buy your Toyotas and sent that money to Japan," he said, "when you don't have a job to make your Toyota car payment, don't come crying to me. All those cars are rice ready. They're not road ready." He would have sold more, but Hardeeville is home to a lot of smart, decent people and only 16 xenophobic morons, counting Welch. Now, I drive a 50th anniversary Ford Thunderbird, and I love my car, and I thank my Ford dealer in Aiea for taking good care of it, but the fact remains that those vehicles Welch demeans as "rice ready" consistently get higher ratings than the ones he sells. As for sending money to Japan, Toyota employs 36,000 Americans, and two thirds of Toyotas sold in America are made in America. Ford makes many of its cars in Mexico. About a third of all the parts in Big Three cars and trucks are foreign-made. The world is complicated, even if Welch is simple.

The bailout reaches Hawaii

Central Pacific Financial Corp. reveals it is accepting $135 million in bailout funds from the U.S. Treasury Department, the first Hawaii banking company to do so. American Savings Bank applied for funds but then changed its mind and decided not to take any bailout money. Bank of Hawaii was approved for $200 million but appears to be keeping the approval in its hip pocket, to be used only in the event of a surge in loan defaults. Central Pacific Bank did not specifically say it will use the money to lend more, which is what the program is for, but it came close. "This capital will further strengthen the fundamentals of our bank and provide additional resources to support our commercial and retail customers," CEO Ron Migita said in a statement. Central Pacific, uniquely among Hawaii banks, is under new leadership which has the luxury of not being responsible for loan losses earlier in the year. Former CEO Clint Arnoldus, seeking to diversify the bank by involving it in the California economy, lent heavily to Southern California developers just before the bottom fell out of the real estate market over there. He tried anchoring the company to an economy that he thought would remain strong during the next weak period for Hawaii, and instead found it dragging the company down at a time when conditions in Hawaii were still pretty good. Ron Migita, who was non-executive chairman during all that, was coaxed into taking the executive reins after Arnoldus retired a little early. He has sold off most of the non-performing loans (some of which were acquired by Finance Factors). Migita, the onetime CEO of Honolulu's City Bank and before that an executive of Bankoh, says he intends to focus on the Hawaii market.