sheril is next . labor cost taken off and forcing the nation's airlines to the depround. parent of the american airlines claiming 68 billion was the driving forcbehind the bankruptcy. that is 600 million more than any other airline pays. i am cheryl casone and welcome to cashin' n we have wayne and john and tracey and john. and joining us the president of mercer and associates david mercer. johnathon this story is fascinating. you think that big labor is hurting businesses like it did american? >> sure, we hear on this program how union help

employees. that was one of the main factors cited by american airlines in the bankruptcy. their pilots make 10 and 15 percent more than competitors and they were offered by the company job security and a signing bonus and they walked away and now the company is bankrupt. that happens a lot with union-dominated firms. >> they negotiated two weeks with the union and negotiated with the pilots with no deal on the table. is it the fault of the unions. >> when you say in a labor dispute whose fault is it? the problem is a simple one and johnathon touched on it. competition is what makes the airlines work or not work. if they compete with each other. if they are not competing on a level playing field someone gets an advantage. in the free market system you

need competition and that levels the playing field and they have got to get the costs down. you just can't do that and compete with the other airline. >> he has a fair point. labor costs for american 6.8 billion alone and had the highest fee structure and now filing for bankruptcy. and the consumer will be the one to end up paying for this. >> cheryl. john alluded to the only cost factor to bring down. they are the most antiquated fleets. they spent a billion more than last year. and then a lot of factors that contributed to it and secondly they went into bankruptcy. and nonunion labor force.

and to say that labor itself causes the primary cause for companies like the airline industry to go in bankruptcy doesn't hold true with delta being a case in point. >> i think what we are saying for the parent of american airlines. 31 percent of the operating expenses went to labor costs. i think we are saying labor costs in general is the bane of many. it costs more because of all of the legacy costs and union costs and labor costs hurt our american companies. >> tracey. >> john, they were looking for huge pay increases and sevenpercent annual pay increases. i know americans would love that. >> david is right on this. these are poorly run businesses. you have had 16 go bankrupt.

and over 110 billion. and ual and american. and delta at 21 . northwest at 14 billion. all of them are going bankrupt, this model simply doesn't work . part of it is the tructure - structure is not good for making money. and legacy issues and has something to do with the labor unions as well >> cheryl, if i might add. you made a point about the consumer, and one of the things that is interesting, you brought up delt afine. and american, the only airline that did not make money this year. they have a lot of problem labor was one of the biggest accord toth company. and also management and coming in to negotiate with labor. american airlines pilots put a billion three of concessions a couple of years ago and

allowing for profitability. obviously management did not take that and leverage it and avoidingly bankruptcy . now they will have to negotiate it under a bankruptcy court and jurisdiction. bring it in competitive. >> the pensions are lost anyway. and my god, cheryl, you pointed out they were offered job security and annual raises and signing bonuses. and you are right. it is a mutually beneficial transaction. if it didn't work for the investors, it will not work for the employees and anyone else. >> the consumer will probably suffer. american will have to deal with a restructuring and still going to deal with unions whether now or later and consumers will end up facing

higher cost for everything. >> the consumer might. i said earlier, i don't believe so. ultimately compitition does that. if i am american and unite we are competing on the same line. new york to atlanta. those costs will be controlled by the competition. >> wayne, wayne, wayne. you make this point all of the time. this is where it doesn't exist. the government plays an intregal role in regulating everything of how airlines are run. it can't. maybe you weren't listening, i said that before. i said that before. i am saying that is right, you can't, you are o have a "free market." you can't have the government interfering.

>> wayne you advocate the antitrust department that provepts companies from buying. >> you are wrong. creating monopoly. that is what is wrong. big government and big labor and big corpation controlling costs. >> david, what do you think happens to american and amr. the bankruptcy filing is done and happening. are we having concession from the pilots now in >> i think you are to have cost reductions and along the operational lines and employees and the unions. but to make a point to what was earlier said on competition. i spoke to a senior vice-president of delta airlines to get retropect last night. he said the reason delta went in bankruptcy was revenue. the way the economy was hit

from 9-11 and brought down revenue and added costs. they are now looking to the best improved economy that we can get and get people flying for them to get in profitability in addition to being competitive as pointed out earlier. tracey. last word? >> that's why we have the fees. in the end consumer will pay for this. let's face it. >> thank you, great discussion. get ready for a revolt. sales not catching fire but the car is? taxpayers may be getting burned. and time for the holiday on line shopping. congress is kicking up a new cyber tab. the inspiring story of how a shippingiant can befriend a forest may seem lie the stuff of fairy tales. but if you take aw the faces on the trees...

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>> two batteries went up in smoke after a crash test. nothing compared to the toyota camry . when you say taxpayers are the ones getting burned here. >> and i think you got to worry. we bailed out general motors and we were talking about bankruptcies. they are the largest that ever occurred in the united states. you can't -- so the company is suspect in the first place and management is suspect. and they couldn't run it when they were operating gas lin engines. i know theirs is up this quarter. that doesn't help this particular model. it is not working. and the fact that it is caught

on fire twice is not in. necessary. you can get your car back in. the taxpayer. . it is frustrating and 40 miles per hour plus gallon. and the way that the government is going about it and trying to get people to buy a car they don't want is not a way to spread -- you have to do different things. >> i am glad you are a believer in a electric car. you can dumped 50 billion in to it. the taxpayer is out a lot of

money to the suzuki samuri. dwaynewade probably did more business. it is touted as the end all and be all. it is a disast yer created for political purposes and the taxpayer is taken. >> to be fair, trace. they had to change up the production lines a bit. that takes time. they should do it. the fire issue could turn in a big one. wayne is right. it doesn't do much for the pr of the electric car, does it now? >> people are buying trucks. silverado is on fire. this is what people want. and wayne said the government is pushing out the green agenda. and maybe chrysler and gm is not ready to push the car out.

give them time to create it properly. >> regular companies are spending their own capitol and the gm is spending taxpayer capitol . it is an investor and they did see the return on the investment in the initial bail out. >> that's not true. and if i might finish and go on. wayne pointed out gm sales are pointed up. and the autosales are doing better than it would have been doing if not supported by the american public. they are expanding. and thirdly. we have to know that the consumer approves of the car by 93 percent. and it has the highest consumer rating.

can meet demand. >> what is the consumer buying this car? the consumer is not buying them. (talking all at once.) >> tracey it has the highest satisfaction. >> four people driving them, david. and of the four -- (talking all at once.) >> let me bring in john in this. john and i were talking about the fact that a lot of other vehicles are popular and tens of thousands of models being sold that chevy makes that are not the electric car. maybe we ought to wait a bit before we push it on public. >> they rolled it out wrong. you want widespread adoption of a electric car or hydrogen. do as boom boom said. get bloomburg said. get it on federal cars.

you can't man date to the taxpayer what to drive. alternative fossil fuels is the future but not right now. >> and wayne, last word? >> i being -- think it is clear. general motors and chrysler declared bankruptcy and ford did not. this is not just a question of making green or blue cars or whatever the heck you want to call them it is a question of management and how you run a business. ford did that without being bailed out with taxpayer money. general motors is using our money to make it work and it is not working. network thank you very much. here comes the grinch. just the on line source shopping. they are pushing a internet sales tax. are jobs on the line?

>> at this hour. we are waiting for news from herman cain. the atlanta businessman is expected to announce whether or not he is staying in the 2012 presidential race. some believe he will drop out. but the festive atmosphere at the new campaign headquarters has some doubting that. and gop hopeful mitt romney said eric holder

brought shame on the justice department. an exclusive interview coming up. conflicting words about panetta on israel. he said publicly that u.s. has israel's back. but now accusing israel of not doing enough in the peace talks with the palestinians. stay with us, everybody. just as we see unemployment falling below nine percent. lawmakers are pushing to collect internet taxes. it hurt thousands of businesses and tracey you say yobs as well >> look, if i go on line to buy something. i have a tax bill, i will buy less. company makes less money and that means less to hire. and it is all coming around. when they are trying to increase our consumption out

there, they will hit us with a tax and bring it down. >> executives from ebay said it hurts maul businesses over all and that's where the job creation is. >> think about the compliance costs. forget the cost to consumer. but the compliance costs and all of the money goes to whether it is albany or springfield or the federal, it goes to more government spending and more government wastes. cut spending as to finding excuse toz raise taxes. >> ceo of overstock said if the law was different, he would not have been able to start this. >> you have to level the playing field. why should i pay a tax if you don't . then i am prejudiced against and i can't sell my products at the same price over the internet. this is a state law that is terrible. it was a terrible case in which they decided you have to

have a presence in the state to sell. that is nuts. take all of the taxes off or have one tax for everybody. >> david, we have seen a lot of new technology start ups which is nice for the markets, but does it hurt the job market if the law changes? >> no, i don't. small business expected the sales tax to come. it goes to john's point with regard to the administration of that tax. and the cause associated with that which people and tholce policy makers need to take that into account and make sure they are not lost. going back to what banesaid. neutral channel on tax policy and it is coming. >> and these stocks have done well. we look at stocks. right now they are growing. that could change.

>> they have. and like an amawhereon. think about life before the great companies came in our lives and think about life before all of that. consumers certainly don't want to go back to that. we don't need new taxes or regulators . 165 in ecommerce sales and that is coming out of the retail sales. one tax is the problem. if you buy it or or in new jersey, this is a convoulated mess of compliance if they try to put it in one size fits all. >> we thank david mercer for joining us this week. >> pleasure to be with you . >> it is a cost of freedom. and john layfield was a victim of a daring robbery? it may be mission impossible for him to get his stuff back.

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>> i don't know which is worse. they know i drive a scooter. thanks to my friends in tmz. this is terrible news . buy harley davidson. and representative of georgia is proposing that people borrow to receive the unemployment checks. >> it was beat up because of the european debt problem and that was misanalyzed and trading seventimes earnings. it is a big rebound stock. great buy. >> back door bail out in europe will cause inflation here at home. it goes up and i am