I had a bit of a discussion with a few friends last night on the topic of a Business selling out to a Foreign Holder. We used the recent AB selling as an example. Their argument is that it is un-American to sell a business that started in the US and got benefits from being in the US and that keeps all of the money in the US to a Foreign Entity. That this action makes our country worse off. My argument is that is it more American because there have many that have died for our right to have freedom and free trade and free market etc. etc. Not to mention if we start having some sort of economic isolationism that this will never be good in the long term. Also that we should put some blame on the FED and Congress for the terrible dollar dillution and huge money supply increases. I also suggested that if you don't like a foreign company buying a US company then DON'T BY THAT F'IN PRODUCT ANYMORE... What say you?
It's more complicated than that. Americans own many foreign companies, too, and we don't need retaliatory action based on our own short-sightedness. America is in fine shape when foreign capitalists invest here. So the Japanese bought Rockefeller Center and got hosed for it. What are they gonna do, take it back to Yokahama? Foreign investors are infusing our economy by investing here. Far from being un-American, this shows that the US is still most stable government and most stable economy on the planet and where folks want to have their money. Daimler-Benz didn't take Chrysler back to Germany with them, they poured Euros on it. Where do you think the middle-eastern Royal Families have their money invested? Largely in the US. The oil sheiks have a vested interest in seeing that the US economy remains healthy, putting some brakes on their avarice, which is good for us. The Nazi German government owned vast acreage in Colorado when they declared war on us in 1941. What good did it do them? I understand what you are saying about allowing too much foreign influence into US decision-making. As usual, I think there is a balance to be struck here between foriegn investment and foreign influence.
Well I think their thinking was more on the lines of not "investors" buy selling whole businesses out of the country thus taking that money out of the US (profit)
In the long term the competition will make the U.S. companies more efficient and lower prices. For example we will probably see a much better Boeing in the future since they now know they can't just sit around with their thumb up you know where.
I don't see how you could reach that conclusion. Look at Detroit, the automakers. They've knows since the early 70's that Japan had their number on quality and they have failed to build cars that americans want to buy more than Japanese cars, not just in the US, but worldwide. Toyota outsold GM worldwide in June, and will increasingly move ahead. It's a testimony to the weakness of the american corporate system. We've lost electronics, lost photography, lost the steel industry, losing the auto industry. The biggest culprit is executive pay. We pay our guys too much, too fast, and we accept the illusion of performance instead to doing the hard work necessary to demand real performance. Look at Citicorp and Merrill Lynch. Both deposed CEOs, Chuck Prince and Paul O'Neal, got filthy rich, while destroying the market capitalized value of two of the finest brand names in the world. Both are down 70% in the last year, give or take a percent (I didn't look it up, you can if you want). We don't pay for performance, we pay for the illusion of performance. Both walked away with golden parachutes, I think O'Neal got $160 million walking out the door. He should have been fired with nothing, then sued for failing to perform his fiduciary responsibility. Remember this, "It's good to be the king!". These sales of our brand names to foreigners are just testaments to our weakness. The govt. has cratered our currency, so our companies can be bought for half the price from 8 years ago, or even less if the stock has fallen, if they are bought with Euro's. Yes, we've bought foreign companies in the past, because our currency was strong, and our companies were well run. It's good to be the king.
To be honest, Boeing is @#%&*ed. As I write this, a huge metal fabrication plant is being built outside of Mobile. The raw materials will come in from Brazil. Siemens is heading up the power plant construction. Northrup G. plans to be active in the South for a long while! Too bad the liberal Congressional folks in Washington state are lying through their teeth about the possibility of Boeing reclaiming the air force tanker contract. Could an election be coming up soon? What needs to be done is for the Congress to once again go back to the 2005 corporate infusion tax plan that was so effective in bringing US corporation profits back into the country at a 13.5% tax rate and at a time when we need capital desperately. I am glad that McCain has pushed this of late and will gain some ground on it if he is elected. Meanwhile, Obama has his head so totally up his @ss on this that, if he is elected, you will see several more major US corporations being bought out in the near future. You see, when Pelosi talks about taxing US corporate profits overseas, at the same time when US corporate profits are also taxed by other countries, the writing is on the wall. We're literally (____ing) ourselves out of being competitive. The problem is..... once these US corporations are bought, the HDQRs often do not stay here. This will become a permanent glass ceiling for many young graduates and American professionals who will be managed by midlevels and senior management from other countries and will have no upward mobility. US women will be screwed over the most as most foreign corporations have no interest in equal gender work environments. As for myself, I have things pretty much figured out for the rest of my life, but I would hate to see the young people of this country being screwed over by these arrogant liberal anti-American socialists like Pelosi, Durban, Shumer, Rangel, Boxer, etc., with Obama as their rubber stamp.
I see it as a business decision, pure and simple. It is not un-American or pro-American. It is just a business decision likely based on a lot of factors.
That is my point and I was going to use them as an example. The American auto industry is more complex than most companies but they are one of the few industries that didnt adapt and look what it has done to them. Most, however, become more efficient and use more resources to stay competitive -- thus creating more jobs, etc. That's what I was implying. They also have been satisfied with their work and never thought this would happen. They have bought some time with appeals and now they are revising their planes, even though it won't be factored into the bidding.
No, listen to the wisdom of houtiger. Tax cuts are not the solution to poor performance by US corporations. Salary and perk cuts to corporate executives is what is needed. Instead of being fairly compensated for making their corporations competitive and useful, they are exorbitantly compensated for simply making money for stockholders and executives, even if it is to the long-term detriment of the company.
