There have been many wonderful letters written through time on a number of topics including love (Napoleon, Beethoven and Lewis Caroll), fatherly advice (Reagan and Fitzgerald), and condolence; perhaps none better than Lincoln's letter to Mrs. Bixby, but my favorite letter of indignation, honesty, and dire warning came this week from the CEO of Titan (NYSE:TWI) to the industry minister of France.
On January 31 of this year, Goodyear Tire made the decison to close its sprawling commerical and farm tire plant in north France. The company in fact decided to bolt Europe, Africa, and the Middle East. It simply became too expensive. In fact, the company lost $74.0 million in the fourth quarter on the plant and $230.0 million for the year. Although the company clearly cannot afford to operate the 54 year old plant, which has capacity to make 6 million units a year but eked out only 1.3 million in 2012, it still has to wait for approval to exit from the European Central Works Council. In the meantime, France has been scrambling for a savior. That took them to Titan, which is an American success story of a comapny that began in 1890 making wheels for wagons and farm implentments.
The letter from CEO Maurice "The Grizz" Taylor hit on so many things that all Americans should understand.
France has boxed itself into a corner. It's a giant social welfare state that only knows one solution, higher taxes, and that is obviosly backfiring. The notion we are looking to hike taxes more in America is appaluing. It's not an economic measure but a punitive one.
China is having its way with France, which coupled with so many regulations and high taxes has crushed its industry's might. In fact, its symbol of industrial expertise, Michlin, is now in danger of not being able to generate domestic jobs.
It was Titan that forced the US government to act against unfair advantages of China, and yet tariffs collected by the government stay with the government. What would the government do with taxes on emmissions? What about a carbon tax that increases our energy bills? What did the government do with the money paid back by AIG and Goldman Sachs? All of these great things for the public never put money into the pockets of the public, and take my word for it, there will be taxes on fracking and natural gas production to make alternatives more compeitive but mostly to fund this gargantuan government.
Union greed run amok can destory and become so belligerent as to chase away would-be saviors whether we're talking Hostess or the jobs of 1,173 tire workers in northern France.
I hope this letter makes the rounds and people see it for what it really is-a love letter. A love for capitalism, success, and achievement.