Replies to post #41925 on Cytogenix (fka CYGX)

[bigworld]

scooter: The Japanese car quality is still perceived to be better, they adapt to market conditions quicker, their operations are more streamlined, and the old American car companies are hamstrung by old union rules and the costs of pension and health benefits for retirees. Before a single part is begun on a car the US Companies are $1500.00 in the hole compared to the base costs for the Japanese automakers, and that includes the Japanese plants located in the US. People vote with their dollars. Do you even see "Buy American" bumper stickers anymore? Enonomic patriotism is dead. Price and quality determine buyer's choices. For better or worse this isn't the 1950's any more. We are in an economic "war" with the rest of the world. We're desperately trying to maintain our standard of living, and the rest of the world is trying to improve theirs. There is an inevitable levelling off in motion. Our standard of living is dropping. Not for the well off, but for the middle, lower middle and lower classes. There is no question about it. I grew up in an era where one breadwinner could provide for a family of 5. How many families do you know that can do that now? With real estate costs in Chicago as high as they are, I would say 90% of families couldn't do it here. We as a nation have been keeping up the appearance of prosperity by borrowing against our homes and racking up credit card balances. But it like a "Potemkin" village. There's nothing behind the fascade. But at least we'll have our CYGX profits to fall back on...we hope.

[Sanoman]

Scootergrrrl:

Contrary to your opinion, most yacht builders are hourly workers. And most of the workers in other factories who make parts for the yacht builders are hourly. Additionally, 6 of the 8 workers I employ are hourly. We sell parts to Viking Yachts. So if you tax the yacht business hard, rich people either don't buy yachts or they buy them in other countries like Dubai. We then quit selling parts to Viking yachts and I have to fire one of my employees. That is how it works. By punishing the yacht builder, you have screwed a worker who was making $10-15/hours with full (company paid) health insurance.

So please before you start reciting liberal talking points, I suggest that you become familiar with a supply and demand curve.

On a different note, you will be happy to know that our favorite communist country has adopted your tax philosophy. It must be nice to be in such good company. LOL


China imposes Yacht Tax
(From Sail.com)

11:17 AM Thu 23 Mar 2006
China has imposed a 10 per cent luxury tax on yacht ownership, at a time when the industry is still in the embryonic stages of development and needs nurturing.

Yachts were caught in the dragnet of tax reform when the Chinese government announced sweeping changes to the country's consumption tax laws, aimed primarily at the luxury goods market.

China's booming economy coupled with a growing urban population and more mature and discerning consumers has led to a larger appetite for luxury goods. Ernst & Young reported China's luxury goods market to be the third largest in the world, and is expected to grow at 20 per cent annually for the next three years. It estimates volume will top US$11.5 billion by 2015 to become the second largest luxury goods market after Japan.

But high economic growth spawns its own set of problems. High income disparity is not unusual in emerging markets where the typical growth dynamic sees budding entrepreneurs and insiders seize the business opportunities and pull away from the crowd to form a new wealth class. In China, there are an estimated half million US dollar millionaires — enough to draw all the major boat manufacturers to its doorstep. The problem, from a policymaker's perspective, is that the wealth gap — a contributor to social instability — is not only unacceptably large, but is increasing.

Against this socio-economic backdrop, the government announced the broadening of consumption tax to embrace luxury items, including yachts. Commencing April 1, 2006, yachts, golf clubs and golf balls will face a 10 per cent tax, while high capacity automobiles, luxury watches and hard liquor (baiju) will be taxed at 20 per cent. On the other hand, taxes on skin and hair care products will end (this tax was introduced in 1994 when such items were considered luxuries).

New taxes were also introduced for disposable chopsticks and planks for wood floors. Clearly, in addition to the business elite, policymakers were also aiming to address the country's environmental record.

[Sanoman]

scootergrrrl:

We can't compete with the Japanese because the US auto maker has to tack on over $1,000 per car to pay for union pensions and workers that it can't layoff. Oh, they can lay them off, but they still have to pay their wages for years.

GM program gives laid-off nearly full pay
By Reuters | November 30, 2005

Dean Braid does not have a job, but the 49-year-old auto worker is not unemployed either.

The Michigan native, who once helped develop the V6 engine for General Motors Corp., was laid off after about 20 years on the job -- yet he still collects his full salary.

''I'd much rather be working, doing what I enjoyed doing," Braid said. ''But things could be worse, I suppose."

Braid is one of thousands of US autoworkers who, instead of working on engines or installing car parts, spend their time doing crossword puzzles, watching movies, or doing community service -- and keep getting paid by GM's jobs bank program.

The jobs bank was established in 1984, during contract talks between the United Auto Workers Union and the Big Three -- General Motors, Ford Motor Co., and Chrysler Corp. The program guarantees pay and benefits to union members whose jobs were eliminated due to technological progress or plant restructurings.

Some analysts estimate GM has about 5,000 employees in its jobs bank, but the auto giant does not disclose figures. However, according to a four-year labor contract GM signed with the UAW in 2003, the automaker agreed to contribute up to $2.107 billion over four years.

Rival Ford Motor Co., which was also responsible for Visteon Corp.'s union employees, agreed to contribute $944 million in its contract, drawn up the same year.

In most cases, GM workers end up in the jobs bank after 48 weeks in ''layoff status" -- which entitles them to government unemployment benefits and a supplemental payout from the automaker that brings the total payment to 95 percent of their take-home pay.

The workers then move into the jobs bank, which entitles them to their full gross pay. In some cases, workers go directly into the program and in all cases, the workers can stay in the jobs bank until they are eligible to retire or be placed in another job.

Braid used to work at the Buick City complex in Flint, Mich. -- once a manufacturing complex more than a mile long, now reduced to mostly empty parking lots. Baird lost his job in 1999 when GM ended Buick production in Flint.

When Braid first joined the jobs bank program, he was required to spend 40 hours a week at the plant, but without work. Others like him go to the plant and sit around, read the paper, solve puzzles, or watch videos.

''People think it's awesome to get paid for something like that. But the thing is, it steals your dignity, your feeling of self-worth. It's a horrible thing to ask a worker to do, day after day, year after year," he said.

GM spokesman Stefan Weinmann said he was not aware of a mandate that requires workers to be at the plants. ''I'm pretty certain that everyone has a choice," he said, ''they can go to school, go to the plant, or do community service."

Braid now helps Doug, a 50-year-old quadriplegic, with household chores such as mowing the lawn or patching the roof. It is part of a community service effort organized by the union, with the support of the company.

As GM struggles with high healthcare and commodities costs, loss of US market share to foreign rivals, and sputtering sales of its sport utility vehicles due to high gasoline prices, analysts worry that new jobs cuts will add to costs that are already too high.

GM has lost nearly $4 billion this year and its recent pronouncement that it would close 12 plants and slash 30,000 jobs could mean more additions to its jobs bank.

Some analysts say the union and GM are in talks about the plant closings and the fate of the affected workers, and that GM was expected to press the UAW to eliminate the jobs bank.