May 28, 2007

Canada - More Trucking Business Unusual

Southern Ontario is losing 150 manufacturing jobs a day. From the London Free Press:

Thomas Assembly Plant: Cutting about 900 jobs with elimination of a shift.

Accuride wheel rim plant: 253 laid off since last summer.

Siemens: The plant that employed 1,300 in 1995 now has 200. That will sink to 50 by the end of 2009.

Dow Chemical Canada: Sarnia plant will close in 2008, cutting 380 jobs.

Sterling Trucks in St. Thomas: Announced 800 layoffs in 2007.

International Truck in Chatham: Announced 640 layoffs.

Dura Automotive Systems: Stratford auto parts announced closure this year, eliminating 280 jobs.

Hendrickson: Stratford truck parts plant announced layoff of about 150 workers.

Mega-Plas: Auto parts plant will shut in August, eliminating 120 jobs.

Stoughton Trailers LLC Trucking - More Business Unusual

Stoughton Trailers LLC has filed with the Wisconsin Department of Workforce Development of possible layoffs from their three manufacturing plants in Wisconsin. Stoughton employs 1,100 but has not issued any information on the number of layoffs, which plants would affected or when the layoffs will happen.

Auto Truck Transport Corp. - More Trucking Business Unusual

Auto Truck Transport Corp. has laid off 189 from its Dublin, Virginia facility due to the downturn at the Volvo truck manufacturing plant also in Dublin.

They have also laid off 20 in
Jacksonville, Florida. There is no info from their numerous other locations.

TRW - Trucking Business Unusual

The layoffs at TRW might be small but is an example of how the 2007 EPA emission standards have affected the entire supply chain of the trucking industry.

From a Dylan McCament
article in the Mount Vernon News, TRW has started laying off 160 assembly and machining operations jobs to an undisclosed location. The article states that these jobs are being moved to Georgia.

The Journal & Courier reports that the TRW Lafayette Commercial Steering Division plant in Lafayette has laid off of 25 out of a staff of 270.

May 25, 2007

Paccar, Peterbilt & Kenworth

Paccar companies Perterbilt Motors Company & Kenworth Truck Company started handing out the first round of pink slips last November. Since the companies refuse to issue specifics, layoff numbers are from leaked information. The companies submit mass layoff notices to the BLS, these numbers are public information if any reporter in the area has the energy to go get them.

Perterbilt Motors Company has plants in Denton, Texas and Madison, Tennessee listed on their web site. But 4News in Nashville wrote that they laid off 154, just after the first of the year, at a plant in LaVergne. Tenn. 4News also reported that 667 layoffs took place at their Madison, Tenn. Plant. The Denton Record-Chronicle reported that the Denton, Texas plant had lay offs in early February.

Kenworth Truck Company has plants in Ste.Therese, Quebec, Chillicothe, Ohio and Renton, Washington. The best layoff information I have come across is also from the 4News article and states that the Madison, Tenn. And Denton, Texas facilities are cutting down to one shift. No lay off numbers have been available.

Finally, some good news.

In a Paccar Inc.
May 11, Press Release Kenworth is building a $400 million powertrain plant in Columbus, Miss. This plant should be ready for the sales boost of 2009 trucks, that truck manufacturers anticipate to take place just prior to the next round of EPA emission standards that become effective in 2010.

From the Press Release:

“…shared Jim Cardillo, executive vice president. "The facility will initially hire approximately two hundred employees and it is anticipated that there will be five hundred employees as production increases over time. Additional employment opportunities, which will generate significant economic benefits to the region, will be created during the construction phase and as a result of suppliers expanding their capacity in the area," added Cardillo.”

May 23, 2007

Freightliner The Long Haul From North Carolina To Mexico

Last week Freightliner LLC announced that they will be cutting 1,528 production workers at its Cleveland, N.C. facility in July if orders don’t pick up by June 10th. This follows a March layoff of 1,180. The plant employs 4,000 and these layoffs represent 68% of the plants production workers. Also, another 478 people from its Mount Holly plant has been put on a temporary layoff.

From a
Charlotte Business Journal article (no author):

“The company said truck orders had dropped dramatically after the imposition of federal diesel-emissions standards and price increases for technology needed to deal with those changes.”

A Steve Huffman article, in the Salisbury Post, covers the walkout at the Cleveland plant on April 2.

“Union members had been threatening since last week to strike, though Whiteside said such action was "a last resort for fair bargaining." He said the strike was necessitated because company officials refused Monday to meet with union leaders.”

"This isn't about money," said Robert Whiteside, chairman of the bargaining committee for United Auto Workers Local 3520. "This is about health and safety. We're fighting for a way of life."

“Freightliner had previously announced that 1,180 workers would be laid off at the Cleveland plant by Sunday. The layoffs are based on seniority, with those hired after May 19, 2004, losing their positions.”

From a Holly Fesperman Lee article:

“According to Cindy Harris, a 17-year Freighliner employee, company officals sent out an automated message Monday night telling employees to come to work as usual Tuesday.”

“According to Harris, first shift workers wouldn't walk off the job because "they're threatening to fire the people if they walk out."

“David Crisco, barganing committee member, said he and other committee members went inside the plant to try to get word to first-shift workers that they couldn't be fired for walking off the job.”

“As union leaders walked through the plant, managers spotted them, told each member he was fired and escorted the men out of the plant's gates, Crisco said.”

"They're being held in there by fear...If they knew the truth, they'd be out here," he said.

How does the new plant being built in Mexico enter into this? Since management does not feel that business for new trucks will pick up until 2009, just prior to when the new 2010 EPA standards go into effect, their new $300 million plant being built in Saltillo, Mexico will be ready. This does not bode well for the prospects of the workers at the Cleveland plant being recalled.

Of course one has nothing to do with the other.

From a December 20, 2006
Freightliner LLC Press Release:

“…We expect another surge in customer demand in 2009 prior to the next round of EPA emissions regulations, and the construction of this new plant will ensure that we are fully prepared.”

“The Saltillo plant is the second Freightliner LLC manufacturing facility to be located in Mexico, joining the Santiago Tianguistenco plant which produces Freightliner-branded heavy- and medium-duty trucks…”

The writing is on the wall for the entire truck industry:

“…Five major U.S.-based OEM’s now have Mexican manufacturing capability, including Freightliner LLC,” said Roger Nielsen, Chief Operating Officer. “DaimlerChrysler has had excellent success in recent years with quality, cost and efficiency through our Mexican operations, and we fully expect the new plant in Saltillo to set benchmark standards for DaimlerChrysler Truck Group manufacturing facilities worldwide.”

North Carolina isn’t alone, Brent Hunsberger tried to insert a little humor (very little) into his article:

“The last Freightliner-branded commercial truck rolled off the production line in Portland Thursday night, catapulting 750 workers onto the unemployment rolls and into a job market that's suddenly cooler than a parked sleeper rig at dawn.”

NetWolves Corp. On The Endangered Species Lists

Did the news media really cause NetWolves Corp. to file Chapter 11?

According to a
Michael Hinman article in the Tampa Bay Business Journal Scott Foote CEO of NetWolves Corp.:

“In a press announcement about the bankruptcy, Foote blamed the need to file for bankruptcy on "certain press reports" that he said "inaccurately attributed statements to the company about continued operations." Because of that, Foote said, some of NetWolves' (OTC BB: WOLV) vendors tightened their credit terms and began to demand payment on accounts.”

If the articles printed such substantive inaccuracies, then liability should be attached and they could be argued to a positive outcome.

Nowhere on the NetWolves web site do the list any of their facilities or staffing.

From the article:

“In reporting its third quarter results to the SEC last week, the company's 10QSB filing said, "The company's main source of liquidity has been equity and debt financing, which has been used to fund continuing losses from operating activities. Based on the company's cash position of approximately [$800,000], and further taking into account ongoing litigation expenses as well as the current maturity dates of the company's long-term debt, the company believes that they may not have sufficient cash to meet the company's funding needs through March 31, 2008 ...”

Sanmina-SCI Corp. - There Is More To The Story

This was an article that I wasn’t going to write, but Sanmina was an unknown company too me, and being ranked 203rd on the Forbes 500 list, I wanted to do some back up research. When I started to dig a little, a story popped out.

From a
Mike Sunnucks article in the Phoenix Business Journal, Sanmina-SCI Corp. will be closing their plant in Phoenix this summer, releasing 602 staffers.

The San Jose Business Journal
printed a notice on May 15, that Sanmina would be closing a plant in Texas, putting 87 workers out of work. There was no indication of which plant or when this will happen but Sanmina has plants in Allen, Austin & Plano Texas.

My-Ly Nguyen wrote for the Gannett News Service that Sanmina laid off 100 workers at its Owego, N.Y. facility on Friday April 13. This was after a lay off of about 90 people a month earlier.

Both writers indicated that requests for information were cold shouldered.

The company has more than 40,000 workers and their world-wide operations are on this

But these lay off events have received little attention while the “street” seems to be more interested in an options back-dating scandal.

From a Huntsville Times
article by Gina Hannah written back in December:

“In a 370-page report filed with federal regulators, the company listed a number of problems in the way it recorded certain transactions during the past several years, including the backdating of stock options.”

“Sanmina-SCI said backdating practices will cost the company about $224 million.”
Other accounting problems listed in the report include:

“In fiscal 2004 and 2005, outstanding intercompany transactions between Sanmina-SCI's U.S. holdings and foreign divisions were not recorded as taxable income as required by federal law. The adjustment increased the company's tax liability to $27.4 million.”

“Sanmina-SCI said it had overstated goodwill, or intangible assets, by approximately $28.8 million as a result of understating the value of the stock awards exchanged in connection with its acquisition of SCI Systems in 2001.”

“The company said a fixed-asset reserve account was overstated by $27.4 million in 2001.”
That adds up to more than $300 million in accounting boo-boos. Not to mention the shareholder lawsuits filed against the company and a handful of execs.

In March CALPERS, the huge pension fund run for government employees in California, listed Sanmina as one of 11 companies in desperate need of better corporate governance.

More troubles for Sanmina. From a May 4 San Jose Business Journal article:

“U.S. Internal Revenue Service and the Labor Department have joined the organizations looking into the company's stock-option granting procedures.”
Other agencies have shown an interest:

“Sanmina-SCI had received informal requests for documents and other information from the SEC and a grand jury subpoena from the U.S. Attorney.”
“The company also said it is a party "to certain legal proceedings that have arisen in the ordinary course of our business.”
Maybe ordinary to their business.

May 18, 2007

Discovery Closing All Stores

Discovery Communications Inc. will be closing all of its retail units by September, this will result in the laying off of approximately 1,000 people.

From a
Neil Adler article in the Washington Business Journal, Discovery has decided to market their considerable product line through partnerships with established retail chains. From the article:

"By eliminating our owned and operated brick-and-mortar storefronts, which are cost-intensive and complicated businesses, Discovery can focus its efforts on high-growth e-commerce and licensing operations, said David Zaslav, Discovery's president and CEO,”

From a previous article,
Discovery Employees Discover Pink Slips, Discovery has recently laid off 11% of their Silver Springs, DC operations, that was 200 people on April 16 and 80 in December.

May 17, 2007

Politics In Maryland Cost Residents $5,300 Per Year

The Washington DC Examiner Newspaper (no author given) printed an interesting article concerning a $1 ½ billion shortfall in the states budget.

The article says that Maryland has a current budget of $30 billion and Gov. Martin O’Malley has ordered legislators to cut $200 million from it. The headlines showing that the Gov. has ordered $200 mil. in cuts looks like he is on top of things and is acting responsibly, when in fact, these cuts represent only 13% of the problem.

The estimated 2005 population of Maryland is 5,600,388, and the State will spend over $5,300 for each resident. My question is; what are you getting for that $5,300?

The GAO Should Apply GAAP At FNM

Back in April I wrote, The Mess Won’t Stop At Fannie Mae, in that article Fannie Mae announced that it would be trimming $200 million from its annual operating budget. After hiring an extra 1,000 staff to sort out the accounting mess that the Office of Federal Housing Enterprise Oversight ordered to be done, it looked like they were back on track. After all, why announce such drastic cuts if the job is not completed.

Washington Business Journal article by Neil Adler Fannie Mea didn’t file their 2005 financial report with the Securities and Exchange Commission until May, 2 and has until next Feb. 29, 2008 to submit the annual report for 2006.

If a public company handled their accounting this way, heads would roll and they would face strong regulatory discipline.

IBM An Extreme View On Offshoring

The whole idea the IBM could cut its U.S. staffing level by 100,000 is not unbelievable.

Over at THE PULPIT, Robert X. Cringely penned his controversial view, that IBM is committed to building out its staff in India. He suggests that during that process IBM could be dumping as many as 150,000 jobs from the U.S. and other higher wage locations.

Mr. Cringely came to this number believing that a system wide reduction of 20,000, out of a staff of 355,000, would be more than reasonable. Add to that the offshoring of a good portion of their support positions it India, where wages are 25% to 30% of what they currently pay, and the U.S. could see a reduction of 100,000 jobs out of their current employment level of 135,000.

This article was posted May 5, and has received over 1,000 comments, quite a few from IBM staffers. One of these comments stated the IBM has dedicated $6 billion to the development of an infrastructure in India.

As I wrote in,
How Fortune 500 Companies Can Save $58 Billion a Year -- Just Send 1.5 Million More Jobs Overseas:

“A Hackett Group research study that as much as $58 billion a year can be saved, by America’s fortune 500 companies, by sending back-of-the-house and administration functions overseas.”

The whole idea the IBM could cut its U.S. staffing level by 100,000 is not unbelievable.

May 15, 2007

Jerry Falwell Quiet Respect

Today Rev. Jerry Falwell passed away. I wasn't a follower, nor did I agree with his more controversial opinions. I find myself with respect for his continuing persistence towards improving the lives of all of us. He believed in and fought for family unity, education and living a clean healthy life. The media types will pound us with some of his extreme comments, when in fact, we need more like him.

May 9, 2007

Imation Putting The Hurt To Wahpeton

Imation is closing its diskette manufacturing plant at Wahpeton, NO. The plant employs 390 people in the Twin Cities area which includes Wahpeton , NO and Breckenridge, MN. According to the Wahpeton City web site the Twin Cities area has a total population of approx. 13,000 and the lay offs represent 3%.

At the plants peak, when it was operated by its previous owner 3M, it had a staff of 900. Imation purchased this 3M division in 2002 and has been cutting staff, from a high of 800 in 2002 to its present employment of 390.

The Imation plant is featured on the
Economic Development Section of the Wahpeton City web site and the picture above is copied from there.

From the
Daily News article (no author given) the company will offer all impacted employees Imation’s standard separation package:

“The package included a minimum of 60 days notice or 60 days pay in lieu of notice or a severance in exchange for signing a general release of claims. The severance package includes one week of base pay for each year of credited service (with a minimum of four weeks and a maximum of 26 weeks); an additional cash payment that can be used for payment of COBRA premiums; outplacement assistance; and an automatic vesting of Cash Balance Pension Plan.”

Also from the
Daily News article, Breckenridge Mayor Cliff Barth puts a positive spin to the announcement at a City Council meeting:

“That’s a huge hit for a small community,… The best news is they are going to try and fill those buildings and businesses.”

But don’t feel too sad for Imation, from their press releases on April 19, 2007:

“Imation Reports Q1 2007 Revenue of $421.9 Million, up 25.9%”

Also released on April 19:

“Imation Board Authorizes Repurchase of up to 5 Million Shares of Common Stock”

That plant would make a great home for some of these businesses that are sending jobs overseas.

May 7, 2007

New Century – Case In Point

Since the downfall of New Century is practically history I wasn’t going to write this article, but after reading the Companies History from their web site there were several things that need to be said.

New Century is a classic example of the ideal modern business. This is what everyone dreams of; making outrageous money moving other people’s money. Yes, they brought home ownership to difficult to finance individuals, but in the process they became one of the preferred vehicles for property speculation. They had to be so leveraged out that a relatively small dip in housing, not commercial real estate, brought the company down.

This was a young company that made its first loan in 1996 and went public in 1997.

From the
Company History section of their web site:

“As the company has grown, so has recognition of its success. The company was named to FORTUNE Magazine’s list of “FORTUNE’s 100 Fastest Growing Companies” – ranking 12th in 2003 and third in 2004. In 2005, it ranked third on The Wall Street Journal’s “Top Guns” list of the best performing companies…”

“…New Century kicked off the “New Shade of Blue Chip” brand identity campaign in February 2005, with the message that the company wants to be seen as a modern blue chip company, while striving to become a world-class mortgage company. New Century’s goal is to become one of the top 10 U.S. mortgage companies for volume and one of the top five for revenue.”

“We’ve achieved a lot in our first 10 years,” says Brad Morrice, Vice Chairman, President and COO, New Century Financial Corporation, “but as I like to say, for New Century the best is yet to come!”

From the New Century web site the company peaked last year with 6,800 employees. And from a Los Angeles Business from bizjournals article they are currently laying off 2,000 more leaving only a 250 “corporate team” to finish burying the company.

Our systems award the “fast-buck” and puts up road blocks to the slow solid growth type businesses. One look at the current budget before Congress shows draconian cuts in the programs that aid small business while heaping on additional taxes and regulation. Common sense just isn’t popular in our financial and regulatory circles.

May 4, 2007

Does Low Wages Equal Strong Management

James O'Toole and Edward E. Lawler III penned an interesting article on They contend that just the opposite is true; that lower paid staff is indicative of weaker management. From the article:

“In almost all industries, productive, higher-paid workers can more than cover the costs of their salaries and benefits, if they are managed appropriately.”

It seems that their article was inspired by the outrageous actions by Circuit City management. As posted in, Circuit City Is Now Hiring – Cheap:
“This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.”

For the last four years American business has been growing and expanding, with over-all profits up over 100%. Now that growth has slowed, mangers are looking to cut staffing to demonstrate their ability to maintain bottom line growth. This is only a short term solution and the problem remains on how to win the race, but with fewer and lower quality horses.

Intel Chipping Away Another 1,000

From the Observer and written By Tom Treweek, Intel is laying off about 21 %, or 1,000 people, at its Sandoval County “campus” in New Mexico.

As written about in;
Intel Investing 2.5B In New Plant - In China. Intel is investing $1 billion to retool their fab11x to produce 45 nanometer chips. But fab 11 and other undisclosed positions, across campus, will be eliminated.

From the Observer article: “Intel employees leaked news of the layoffs; there was no press release. Shipley said the company wanted to inform its employees before the news appeared in the media.”

May 2, 2007

IBM = I’ve Been Moved Overseas

News is coming out on the latest round of 1315 layoffs at IBM. Here’s a list of what I’ve found so far:

Denver & Boulder, Co. 150
Poughkeepsie, N.Y. 45
Westchester County 15
Endicott, N.Y. 13
East Fishkill, N.Y. 11
Essex Junction, Vt. 7
Burlington, Vt. ??
Southbury, Conn. ??
Lexington, Ky. ??
This is way short of the 1315 layoffs that are being reported, so if anyone has additional info please post in the comment section or E-mail me through my personal profile button. I'll update the above layoff numbers and all other info is confidential unless released.

From a Craig Wolf article in the Poughkeepsie Journal: “Lee Conrad, national organizer for the employee group, the Alliance "at" IBM, said members had sent in paperwork issued by IBM internally showing a major downsizing nationally.”

Also from the Alliance "at" IBM web site here is a list of departments being effected:
Server Systems Operations
Technology Integration & Management
Global Infrastructure & Resource Management Americas Delivery Engagement Support
Security, Asset and Risk Management Americas Industrial Sector Delivery
Financial Services Sector Delivery
Distribution Sector Delivery
Communications Sector Delivery
IBM Global Account Delivery
Global Network Services Delivery

Conrad also said "IBM has been very clear they will be eliminating jobs in the United States and shifting jobs to India and China and other low-cost countries,".

From a Paul McDougall article on
“IBM's spokesman said the job cuts are related to the company's effort to redistribute its workforce from low-growth to high-growth areas. The plan was unveiled two years ago, when IBM said it would cut 10,000 to 13,000 jobs worldwide. IBM took a charge against earnings of $300 million last year primarily to cover costs associated with those cuts.”

May 1, 2007

WaMu’s “Amazing Accomplishment”

The Puget Sound Business Journal’s staff writer Justin Matlick penned an in depth article on the recent layoffs at Washington Mutual.

From the article, President and Chief Operating Officer Stephen Rotella said that trimming $700 million off expenses in a short time span, "is an amazing accomplishment."

Rotella also said that the streamlining effort is now complete, and is already being reflected in WaMu's bottom line.

Chairman and Chief Executive Officer Kerry Killinger has since made it WaMu's goal to bring their expenses inline with other big banks, spurring a series of moves that included:

Cutting overall staff levels by upward of 10,000 workers, or 18 percent
Moving thousands of jobs to India, the Philippines and Costa Rica
Shuttering more than 80 retail branches
Closing 10 of 26 home-loan processing centers
Matlick writes:

“In addition to the Philippines location, WaMu contracts out call center work to Costa Rica -- where Spanish-speaking workers handle calls from the company's bilingual customers -- and outsources some back-office operations to India. Its goal is to eventually move the equivalent of 7,500 full-time positions offshore.”

WaMu is among a growing number of financial institutions, including JP Morgan Chase & Co., Citigroup, B of A and Countrywide Financial Corp., transferring operations offshore.

Something to think about; in an effort to alleviate the problems with sub-prime loans, WaMu is refinancing 2 billion of these loans with hopes that a little time will allow the borrowers to get their act together. Or could they just be pushing these problems out of the current financial statements.

From the website:

"We have a simple philosophy: Everyone should be treated with dignity and respect.This simple approach has been in practice for years at Washington Mutual. We're committed to creating a work environment where everyone has the opportunity to thrive and succeed."

Lenovo Hitting Triangle With Layoffs

Since my computer blow a power supply and it took half of everything else with it, I’ve had some time to think about what the layoffs happening at Lenovo might mean.

Back on April 19th
Rick Smith wrote a thoughtful article, on, about Lenovo’s second round of layoffs since they bought the IBM division for 1.25 Bil back in 2005. Like the cat that just cornered the canary, the big boys seemed confident that they now had what they needed to make a serious dent into the U.S. market. But that little canary was slipperier than the cat thought and the powers at Lenovo also forgot to bring that one last ingredient needed to finalize the deal; a quality product. There just isn’t much of a good story out there about their product and follow-up service.

At least company spokesman Ray Gorman sounded sincere and was forthcoming with some details needed to give an honest assessment. When the jerk, sorry, company spokesman for Hershey Foods, Kirk Saville, discussed their layoffs, he sounded like the people who have worked their entire lives for Hershey deserved the boot.

Ray Gorman quoted from the Smith article:

"I think most employees understand that (these) actions reflect the realities of our fiercely competitive industry,… These are difficult and certainly painful decisions, and we do not take them lightly."
This is a great example of how attitudes start at the top, Lenovos CEO Bill Amelio, called the layoffs "totally gut-wrenching."

I believe that Mr. Amelio had dreams of building something real in North Carolina but got caught by the storms named Dell, Hewlett-Packard and Acer.

As these companies venture into the States (or is that vulture) and build a client base, they also build back of the house services such as R & D, accounting, marketing, sales, distribution and customer service. Once these departments are up and running it becomes irresistible to move them to lower cost locations. But cost is only one factor, being an employer in the States comes with a load of regulation and litigation.