Jul 27, 2007

AstraZeneca Gives 1-In-10 The Unemployment Pill

AstraZeneca announced that they will be laying off 4,600 after 3,000 layoffs where announced in February. The company’s website lists over 66,000 employees with 27% in the Americas? The company will have 69,000 after their purchase of Medimmune Inc. These layoffs represent more than one-out-of-ten.

They list 10 U.S. locations with the largest employment concentrations in Wilmington, DE, Westborough, MA and Newark, NJ. It will be interesting to find out what the percentage of U.S. layoffs will be.

Earlier this year Times
100 best companies to work lists AstraZeneca as 71st on the list. An interesting statistic from the Times list is that they hired 174 people last year after receiving almost 110,000 applications.

Medimmune Inc. website about lists 3,000 employees is headquartered in Gaithersburg, MD., manufacturing in Fredericksburg, MD. and Immune facilities in Philadelphia and Bensalem, Pa., and Santa Clara, Ca. Their about page also lists a facility in Kentucky with no further identification.

Jul 26, 2007

Wells Fargo Deserves Kudos

It is unusual for a company, the size of Wells Fargo, to give specific information and show such a high level of concern for their people.

Wells Fargo has issued a Press Release that announces the closure of their brokered subprime lending unit. In Baton Rouge, La. the company will affect 170 and 67 in Des Moines, Iowa. From the statement: “the Company is working to identify positions in other areas of the organization”.

It is easy to understand why they are the only S & P’s AAA rated bank in America.

Help Wanted Ads At 49 Year Low

The Conference Board issued a Press Release today on its monthly reading of U.S. help wanted advertising. It also stated that on-line advertising took a 2% dip in June.

With this reading happening in June, at the start of a busy summer season, does not bode well for the remainder of the year. The report also pointed out that the reading has been down in all regions of the country for three consecutive months. The Pacific region is leading the country by being down almost 25%.

Another issue is the effect that lower job demand has on wages. As competition for applicants moves down, so do the salaries that employers have to pay to fill those openings.

LSI Leveraging Worldwide Contract Manufacturing Ecosystem = U.S. Layoffs

As written about earlier this month LSI announced 900 layoffs - Strategic Restructuring 900 To The Unemployment Line.

Less than three weeks later they announce another 2,100 layoffs. From their website they have 13
North American facilities outside of their home town of Milpitas, Ca. The company made no indication of where or when the cuts will take place or if any severance packages will be offered.

From the LSU July 25, Press Release:

Abhi Talwalkar, LSI president and CEO, said, "As a result of the steps we are taking today, LSI will be well positioned to leverage the worldwide contract manufacturing ecosystem to further reduce our costs and improve our gross margins over time. Additionally, we anticipate significant benefits from additional sourcing options and worldwide fulfillment capabilities."

The company, other than their own back-slapping, gives no information on employment numbers or layoff information. If anyone can add to this sparse info, please leave a comment.

Additional article in the Silicon Valley / San Jose Business Journalabout LSI: LSI posts $378M Q2 loss, plans $100M sale and 2,100 job cuts

Jul 25, 2007

Support John Kerry’s FORWARN Act.

Imagine that, I actually agree with Sen. John Kerry.

STEVE EDER and JAMES DREW staff writers for the toledoblade.com reports that Senators Kerry and Stabenow support Senator Sherrod Brown’s reform of the WARN Act.

I have often stated that employers are finding numerous ways around the reporting requirements of the WARN Act. I only hope that the final reform passes with solutions that closes the Bill’s loopholes.

I am usually against additional regulations on American employers, but if employers had to provide comprehensive reporting on layoffs and restructuring, we might see a little less of the under-the-table shuffling of staff to hide layoffs and offshoring activities.

Can Ailing Boomers Be Intel’s New Market

From a Sara Solovitch article in the Silicon Valley / San Jose Business Journal, Intel is collecting data on the “860 million people worldwide who are diagnosed with one or more chronic diseases,”

That number will double in the next 18 years and double again in another 25. How Intel will turn that into future profits is anyone’s guess. From the article:

“They see a future of profit gain for innovators with products and services to deal with this senior tsunami and years of profit drain at businesses where growing numbers of employees become caregivers.”

"Yes, it's a business opportunity for Intel but it's also a business imperative," Eric Dishman, general manager and global director of Intel's Health Research & Innovation Group concedes. "We have 90,000 employees and we know that a third of them do elder care. For many, it's a huge challenge -- like having a day job and a night job."

“According to an AARP study, the economic value of family caregiving is worth $350 billion a year -- with productivity losses costing American businesses $33 billion.”

“As 78 million Baby Boomers reach retirement age in less than three years, the impact is set to skyrocket. By 2030, 60 percent of Boomers will be managing more than one chronic condition; by 2040, seniors will outnumber caregivers 3-to-1.”

Previous articles: Intel Corp. An Interesting Twist About Their Layoffs, Intel Chipping Away Another 1,000 and Intel Investing 2.5B In New Plant - In China

What’s Wrong With This Picture

From the Not Your Average Drug Bust article and written by Paul Duggan and Ernesto Londoño, Washington Post Staff Writers”

“44-year-old Zhenli Ye Gon… Born in Shanghai, lived in Mexico and ran a pharmaceuticals company -- a front, authorities allege, that supplied Mexican drug cartels with massive quantities of a chemical used to make the street drug methamphetamine. Police raided his luxurious Mexico City home in March, carting off what they said was $207 million, most of it in $100 bills that had been stashed behind false walls and in closets.”

I had to show that picture because drug use is a major problem in today’s work place. Personally I feel that every workplace should have a continual drug testing program.

What is the fascination with drugs, at first it’s youthful curiosity, but after that I’m lost. When does a person “grow up”? I know people that work full-time, have homes and families, but every extra dollar (and some that aren’t) goes towards drugs. Are we raising our children to believe that they are not good or special enough, in which something more is needed to make a person more special, more individualistic or more self-absorbed?

Jul 24, 2007

OPEC & China Worried That Their Draining Too Much From The American Economy

This week OPEC President and United Arab Emirates Energy Minister Mohammed al-Hamli, said that the group was concerned that rising fuel costs might be harming our economy and will increase production, pushing prices down, if they get the whim.

From a
Forbes.com article by Brian Wingfield:

“After years of soaring economic growth fueled by low-cost goods sold abroad, the Chinese government is tapping the brakes on its export industry.”

“Beijing earlier this month dramatically cut the tax rebates that exporters get on more than 2,200 products, including soap, plastics and glassware. For another 553 goods--particularly those that cause pollution and use up a great deal of energy--it eliminated the rebates completely."

“The move is intended to let the air out of China's ballooning trade surplus with the rest of the world, which is projected to reach $250 billion in 2007.”

Could it be that they are just concerned that the patient is being drained to fast?

Movie Gallery & Hollywood Video Gets Extension

Follow up to: Movie Gallery Parent Of Hollywood Video Will Be Adding Pink Slips To Their Shelves

Cindy F. Crawford writes in the Birmingham Business Journal that Movie Gallery has received and extension till Aug. 19, 2007. It would appear that movie Gallery has caught up with their payments and creditors are waiting to see if the company is capable of making the next payment on time.

With so many jobs at stake, this is a huge issue. My hope is that the company uses this time wisely and finds a path that retains the greatest number of jobs.

From my previous article:

“It would appear that the company is in worse shape than their letting on, the restructuring of their senior debt only happened last February, and after one “softer than expected” quarter they are unable to meet their payments”

Jul 23, 2007

UAW, General Motors Corp., Ford Motor Co. and Chrysler Fight To Survive At Retirees Expense

Over the years auto workers have given up wage-gains, allowing the company to walk away with a promise of improved retirement benefits. Now that the future is here, the companies are going to attempt to negotiate their way out of those promises.

Last year the combined big three (B3) lost $15 billion and face legacy costs of $114 billion from those previous “promises”. The auto makers priorities are no secret; transfer those legacy costs to a shrinking UAW, drastically cut wages, shift the healthcare and retirement costs to their current workforce, implement a two-tier wage schedule and increase the use of part-time workers.

As written about in
Toyota Is Running A One Person Hybrid Race, the B3 made a conscious decision to give up the small car market preferring the higher margins obtained by pumping out petrosauruses. That decision has allowed the small car manufacturers to capture the U.S. market putting the B3 at a huge disadvantage.

As the contract negotiations get underway there are a few other current events that help shape the UAW’s position. In the recent contract signed with bankrupt (financially and morally) Delphi,
the Future of the Union writes:

“A federal bankruptcy judge approved this morning a new labor deal between Delphi Corp and the United Auto Workers that offers senior workers cash payments in exchange for accepting lower wages."

“Delphi will close 11 of 21 UAW represented plants. It will operate 4, while 7 will be sold and operated by other companies. As a result, the 17,000 UAW members at Delphi will drop to 10,000 or 11,000 in the next few years —“

But it would appear that the UAW is getting help laying down the rules for the “part-time” designation, from a Business First of Buffalo article Delphi faces out-of-state hurdle by Thomas Hartley:

”A union representing more than 2,000 workers at Delphi Corp. plants in Ohio, Alabama and Mississippi said Friday that it has filed a contract termination notice with the bankrupt automotive-parts supplier.”

From Delphi accepts equity bid; judge approves union deal by Vinnee Tong
of the Associated Press and printed on the journalgazette.net:

“Wages will drop to a range of $14 to $18.50 an hour from $27 an hour. The cuts are effective immediately."

Equal work, unequal pay Josee Valcourt / The Detroit News

"BELVIDERE, Ill . -- At $18.50 an hour with limited benefits, Forrest Ammons earns a decent living building cars at Chrysler's Belvidere, Ill., assembly plant."

"But Ammons toils side-by-side with workers who make $10 an hour more than he does and enjoy full health care coverage, generous vacation time and a host of other benefits and protections."

"Ammons, 35, is what's known at the Belvidere plant as an "enhanced temporary worker," a designation that not only sets him apart from his full-time co-workers."

From the Dayton Business Journal article Delphi union initiates strike plan:
“The IUE-CWA labor union said Friday that it has filed a contract termination notice with Troy, Mich.-based Delphi. The notice allows the local chapters to strike after midnight Oct. 13.”

“As part of the notice, the union also revoked its permission for Delphi to continue to use temporary employees in IUE-CWA represented facilities. The union said Delphi has the option of reducing production output or hiring the workers as permanent.”

From Contract showdown begins by Josee Valcourt / The Detroit News

”Nothing less than the future of the U.S. auto industry is at stake in this year's bargaining. Automakers want to eliminate a $30 gap in hourly labor costs that puts them at a competitive disadvantage with their Japanese rivals.”

“The key issue is can we have competitive firms and middle-class jobs?"

“Amid shrinking sales and mounting losses, Detroit automakers have cut tens of thousands of jobs since the last round of bargaining in 2003.”

“In an unprecedented move in 2005, the UAW agreed to shoulder more health care costs at GM and Ford because of the companies' financial problems. Under those deals, active workers agreed to give up pay raises to help finance retiree health care while retirees' out-of-pocket expenses increased.”

From Powerless, retirees fear losing benefits:

“Retirees are typically fiercely proud of their auto careers and staunch defenders of the United Auto Workers union. But they are growing increasingly concerned about the fate of their health care coverage and pensions during upcoming contract talks.”

“They will have no vote on a contract that could dramatically overhaul their benefits, known as automakers' legacy costs. And many current workers say they expect to approve a deal in which everyone, including retirees, will have to make sacrifices.”

“The deals slashed $1 billion from GM's retiree health bill and more than $850 million from Ford's.”

"We took benefits instead of wages a lot of times, so our feeling is we've already paid for our benefits. Why should they be able to take it away?"

“With new workers paid far less than their colleagues doing the same job, Chrysler's Belvidere plant may be the future.”


The bottleneck in negotiations follows a settlement between Delphi and its largest union, the United Auto Workers. A bankruptcy court judge Thursday approved that contract, which cuts hourly wages from $27 to between $14 and $18.50.

"The union had allowed temporary workers as a goodwill gesture as long as talks toward an acceptable contract were progressing," Clark said. "Hopefully with this action, progress may improve."

Packard needs the temporary workers because of a large cut in its hourly work force last year. Nearly 3,100 of its 3,800 hourly workers in the Mahoning Valley at the time accepted buyouts and early retirement offers.

From a Bill Koenig article
UAW Chief Stuck Between Reuther Legacy, `Crashing' Car Industry:
“At the same time, Gettelfinger's union is shrinking. UAW membership in December was 538,448, about one-third of its 1.5 million peak in 1979, as GM, Ford and Chrysler have cut jobs while losing U.S. market share. Thousands more members are departing GM and Ford this year in UAW-negotiated buyout programs.”

Jul 20, 2007

Altria Optimizes Worldwide Cigarette Production

Is this an accident or a planned timed release of information. In June, Altria announces in a June 26, 2007 Altria Group Press Release that they will be closing their Cabarrus, NC. facility, “optimizing” as many as 2,500. Three weeks later they announce in a July 18, 2007 Press Release an additional purchase of Grupo Carso that takes their ownership to 80%.

From their
Altria Group Press Release:

“PMI is expected to shift sourcing of approximately 57 billion cigarettes from Cabarrus to PMI facilities in Europe by the third quarter of 2008,”

They state that only production for foreign market consumption will be moved. My question is could there also be plans in the works that would cause further moves of U.S. production to Mexican plants for U.S. consumption.

Jul 19, 2007

Government, SCHIP And The Sin Tax Revisited

Follow-up to: Government Loves Cigarettes

The problem, as I see it, is that government feels that the pool of American tax dollars is bottomless and it is their “responsibility” to create a new tax to fund every altruistic concept. I just don’t believe that government has unlimited authority to take every noble motive and make it theirs. The government has to be given parameters and it’s those restraints that will always cause controversy.

My argument isn’t with the issue of smoking, it’s with the government. I’m just tired of the back door tactics they use to get programs funded and going that will not make it through the front door.

Our government is contentious on purpose; if an issue can’t gain consensus then it should not be ready for prime-time. By providing $35 to $40 billion in initial funding for the SCHIP program we’ll have another huge bureaucracy formed over night that will be in the order of Medicare and Medicaid. It’s the American way to build and grow and the SCHIP would become a launching platform for nationalized healthcare.

Since it’s the implied goal of these “taxes” to further the cessation of smoking, it’s also reasonable to assume that the programs funding will also dry-up. Exactly what form of funding will take place as the sin tax revenues disappear? What are the SCHIP mandates and how are they going to be implemented. How many children will be covered, what will be accomplished by this funding and what will their needs be 5 or 10 years out.

Are we just going to provide funding and then answer these questions based on Congresses directive to go forth and spend. No one wants to deny uninsured children healthcare, but this situation is far from critical and shows no signs of becoming one. There is plenty of time to do it right.

Jul 18, 2007

G.M. Buying 50% In Italian Diesel Manufacturer

A follow-up to the last article.

G.M., listen up, the answer is not to keep remaking the “super tank” segment of the car market but to bring true American ingenuity into the small and medium market. Take your Saturn brand and make it a superior American made vehicle and they-will-come.

From the
Business First of Buffalo bought a 50% stake into the V.M. Motori S.p.A. from Penski Corp.. As stated in the last article the auto manufacturers see diesel, not Hybrids, as the next step in combating foreign oil and pollution.

Toyota Is Running A One Person Hybrid Race we stated that G.M. will put diesels into their larger vehicles, from the article:

“The plant announced in June that it would start producing a new 4.5-liter turbocharged diesel engine in late 2009 for light duty pickup trucks and the Hummer H2.”

“GM will use a 2.9 liter, V-6, made in Italy by VM Motori, in the Cadillac CTS and Saturn Aura.”

Toyota Is Running A One Person Hybrid Race

Jerry Flint, in a Forbes.com article, paints a clear picture of the market and the near-term prospects for the hybrid auto industry. The MSM has hyped hybrids as our only current solution we have to save America from the evil oil companies, at least till ethanol production and distribution spreads across the country. But that’s another article.

Toyota has five hybrid models that have combined sales, for the first six months of 2007, of 140,000. The Prius accounts for 94,000 or two-thirds of the hybrid sales for Toyota and Lexus combined.

For the same six months the
Honda Civic Hybrid sold 17,141, the Ford Escape Hybrid 11,444 units, while its half-brother the Mercury Mariner sold only 2,028 and Nissan’s didn’t bother to distribute the Altima hybrid nationally.

While Detroit will offer the Ford Tahoe and the Chrysler Durango with a hybrid option this fall, it appears that they still haven’t learned their lesson. The big three gave up on the small car market years ago, when oil was under $20 a barrel. They made a conscious and deliberate decision to capture the large (high margin) vehicle market with luxury sedans, pick-ups and vans. That decision worked for awhile but today the “Big 3” has become the small 3 and they are falling-over-themselves to send manufacturing offshore.

Other than Toyota, Flint does not paint a rosy picture for hybrids. He feels that the next reasonable step for the auto makers is in diesels. Honda has plans for a four cylinder diesel and again the “3” plan them larger vehicles.

They refuse to learn that margin is not always king and are making it harder and harder for Americans to buy American.

Jul 17, 2007

Government Loves Cigarettes

Or how to raise taxes $15.25 billion a year 61¢ at a time.

Politicians love to demonstrate their concern over the welfare of the American people by piling on the anti-tobacco bandwagon. At the same time fall all over themselves to figure out how they can tax, sue and squeeze more money from tobacco.

Currently the Senate Finance committee is passing an increase of the cigarette tax from 39¢ to $1.00 or a 156% increase. Of course this added revenue will be used to finance a health plan program for children. What happens when everyone stops smoking? I guess they will just raise taxes.

While the Democratically controlled Congress shouts about taxing the rich and helping the poor, they continually find it easier to impose taxes that impact the lowest wage earners the most. If you smoke one pack a day that will equate to a $222 annual tax increase.

From a Reynolds American Inc.
Press Release (pdf):

Does The Right Hand of the Senate Know What The Left Hand is Doing?

WINSTON-SALEM, N.C. – July 17, 2007 -- This week, two Senate committees will likely approve separate, but diametrically opposed, pieces of legislation related to tobacco products.

On the one hand, the Senate Finance committee is expected today to increase the tax on tobacco products by 156 percent to fund expansion of the SCHIP program. The increased taxes, falling primarily on middle- and lower-income tobacco users, will generate an additional $35 billion in government revenue.

Federal and state taxes and payments already account for more than 50 percent of the average cost of a pack of cigarettes.

On the other hand, the Senate HELP committee is scheduled on Wednesday to consider and likely approve legislation granting virtually unlimited regulatory authority over tobacco products to the Food and Drug Administration.

A chief proponent of the FDA legislation, Dr. Greg Connelly of Harvard University School of Public Health, testified before the HELP committee in February that the bill “could turn Marlboro into lard: legal, but no one uses it.”

“These consecutive committee actions beg the question of whether the Senate is trying to have it both ways: sell more cigarettes so the federal government can have billions of dollars more in tax revenue, while at the same time regulating tobacco products to the point no one will use them,” said Tommy Payne, executive vice president of public affairs for Reynolds American Inc.

PNC Cutting 450 in Maryland

According to a Rachel Sams article in Baltimore Business Journal, PNC will be eliminating 450 jobs from the recently acquired Mercantile Bankshares Corp. in Maryland. Company spokesperson Fred Solomon said that the Maryland market currently has about 200 openings and those positions will be available to the staff that is being given layoff notices.

Click on the
BBJ article to see where these layoffs are occurring.

Sprint - Boomers Under Attack Again

From a DAVID TWIDDY article on Breitbart.com Sprint Nextel settled an age discrimination suit for $57 million. From the article:

“The suit, filed in 2003, claims then-Sprint Corp. illegally moved employees 40 and over to positions that were then eliminated as part of the company's downsizing efforts.”

“"We elected to settle this case so that we can continue to focus on the business," said company spokesman Matt Sullivan.”

As if a single law suit is going to distract Sprint.

Companies’ targeting their highest paid (and most experienced) staffers is nothing new, like UPS or IBM, the difference is the way they go about it. To deliberately transfer older workers to positions that they know would be eliminated is outright discrimination.

But Sprint Nextel is not the only ones trying to gain financial advantage of the Boomers. From the Twiddy article each of the 11 lead plaintiffs received and average of $155,000 and the remaining 1,686 averaged $20,332. Meanwhile the attorneys have to squeeze by on $21.4 million.

But this isn’t the companies’ first age discrimination suit, last May they paid $5.5 million to 462 former employees in a lawsuit filed in federal court in Atlanta.

Economists Base Their Rosy Predictions On Selected Statistics

Many economists have been using our historically low unemployment rate (4.5) as proof positive that the trade deficit or that the massive offshoring effort by the country’s largest companies, is having no effect on the outlook of the American economy. Ron Scherer and Simone Baribeau wrote in a Christian Science Monitor that the entire job growth, experienced this year in the U.S., has been compliments of the service sector. The service sector has added 815,000 in the first half of this year while the economy, as a whole, has added 709,000. Without the service jobs that have been added, we would have lost 106,000.

What was missed in this equation, from the
BLS The Employment Situation Report for June, is that Medical Services added 371,000, Government added 347,000 and Food & Beverage added 387,000 this year. That means that all other sectors combined, lost a total of 396,000 jobs this year.

This “good economy” is not broad based nor is it reaching most people, as written about in
Earning Power And The American Dream the average American worker is earning $5,000 less a year, in purchasing power, the he did in 1974. The only reason family wages have increased is that the average family has more working members.

Jul 16, 2007

Earning Power And The American Dream

U.S. families have carried the economy during this last 5-year growth cycle, but for most of us, we have not participated in it. A significant portion of this growth has come from liquidity (cheap debt) and from developing foreign markets. Our biggest companies are growing overseas and shrinking here in the U.S., with the result bringing about a less than ideal situation for our future.

In the Christian Science Monitor article,
American dream still burns bright for many – but results vary, and contributed to by Faye Bowers in Phoenix, Bill Frogameni in Fort Lauderdale, Fla., and Bina Venkataraman in Boston:

“Today, men in their 30s earn about $5,000 less in real terms than did their fathers' generation, according to Pew.”

“Today "there aren't the kind of jobs available you used to get with a high school education, and work yourself up," says Mr. Brockman. "Now you have to have training or experience to start – then you can work your way up from there."

Jul 12, 2007

Chicago Transit Gives 1,000 A Free Ride To The Unemployment Line

From an Associated Press article reported on WQAD web site, the CTA took a shot at the Illinois legislature by threatening layoffs and service disruption if the state doesn’t fork over additional funds.

“In announcing the layoffs, CTA officials said the job cuts were part of a contingency plan that would take place in September if the Illinois legislature fails to increase transit funding.”

When digging through the CTA web site I found the “2007 Contingency Plan” (pdf and very slow). The plan offers five paths that the transit authority may take; Option A is a service cut only contingency illustrating total layoffs of 10,833. Evidently this plan calls for a combination of layoffs in August, and fare increases in September, to provide the board with time to determine how to cover the $110 million anticipated shortfall.

What I find of special note is that the first graph illustrates that “pension and health care cost increases” are identified as the principle cause for the anticipated shortfalls. There was no mention of the cost of fuel or the escalated cost of maintaining the 9.6 year old fleet.

Pensions should not be a problem if they were properly funded when the commitment is incurred. This is a significant problem in America today, businesses and organizations, like the CTA, have failed to adequately fund pensions and have put the problem off to-a-later-date.

Inadequate funding of pension responsibilities is going to become a major problem, you will see company after company shift the blame for poor performance on to their older employees.

Jul 11, 2007

Offshoring, An Interesting Article From The People’s Daily Online (Of China)

I ran across this by accident, I thought that their prospective was interesting:

“Jobs are usually slashed in developed markets, such as the US and Europe. But in emerging markets, including China, jobs are usually maintained and even added.”

“Citigroup Inc in April said it would eliminate 17,000 jobs, or 5 percent of its workforce, as part of a broad restructuring plan designed to cut costs and bolster its stock price.”

“It also declared that more than 9,500 jobs will be moved to lower-cost locations worldwide, including China and

“The effects of the restructuring will be felt hardest in Raleigh, North Carolina, where roughly 20 per cent of jobs will be cut or relocated to emerging markets like China, India and Eastern Europe.”

"The main driver of (the layoff) trend is cost savings, considering how much lower the cost of labor is in developing marketplaces," said Leigh Baker, senior advisor of human resources consulting services firm New Leaders International.”

“A survey from the London-based Economists Intelligence Unit showed that China's average labor cost increased $1.36 per hour in 2005, up 72 percent by 2001, and is to double to $2.70 per hour by 2010.”

"Those senior managers are assigned to implement corporate production, supply, financial and other business systems, all of which require in-depth knowledge of the systems themselves and long work experience in MNCs," said Baker, a veteran MNC consultant.”

“Baker forecast that MNCs will ultimately phase out their senior foreign managers and replace them with Chinese managers they have been training to take over.”

Our Universities Have To Go Offshore To Find Talent

Are they kidding me that these schools and universities can’t find sufficient talent from their own ranks. If that is the case then what are they turning out???

Printed in BusinessWeek was a
list of top 200 users of H-1B visas.

75 OHIO STATE - 271
92 UCLA - 239
117 PURDUE - 208
131 TEXAS A&M - 198
144 USC - 183

Join The Immigration Reform Debate

As I wrote about before in, How Fortune 500 Companies Can Save $58 Billion a Year -- Just Send 1.5 Million More Jobs Overseas, and Trade Deficit and Exporting American Jobs.

Bussness Week has been publishing a series of articles (list at bottom of page) on immigration reform that is now before Congress. There has not been a better time to get real Visa reform accpmplished than now. Our Senators and Representatives need to demonstate that they are producing results on this front.

The problem is that our H-1B visas and L visas are being misused, with the result being lost American jobs. As an example; an employer will hire foreign IT workers after marketing the position, with a $35k annual salary, to IT workers that would normally start the same job at $65k. After not being able to find a qualified worker at the lower rate they can then qualify for a H-1B visa worker.

The L visa allows companies to bring foreign workers into the U.S., as a transfer, either replacing a American or for training to eventually replace U.S. when they go back to their original country.

What Senators Durbin and Grassley are looking into is the use of these visas by companies that are also laying off American workers. Most of the companies that are participating in “loopholing” the current visa law state that they need to do this to stay competitive. Do we really believe that
Microsoft, IBM, Citigroup, Freightliner, Hersey or Washington Mutual wouldn’t find a way to be competitive if they didn’t send hundreds of thousands of jobs overseas. It is just a way to improve the bottom line. Everyone of these companies became who-they-are as American companies, with American workers.

BusinessWeek articles:

Salesman in Chief, January 24, 2007
Work Visas May Work Against the U.S., February 8, 2007
Fresh Ideas for the Immigration Debate, February 27, 2007
Gates to Senate: More Visas, March 8, 2007
Crackdown on Indian Outsourcing Firms, May 15, 2007
A 'Troubled' Immigration Reform Proposal, May 18, 2007
India Links Visa Flap with Doha Talks, May 18, 2007
Table: "Who Gets Temp Work Visas". May 18, 2007
U.S.-India Trade at Risk?, May 25, 2007
Immigration Fight: Tech vs. Tech, May 25, 2007
More Heat for Indian Outsourcers, June 27, 2007

Motorola, I need your help answering the following questions.

In 2000 Motorola had total global employment of 150,000 and currently they post their global employment at 66,000. What was their U.S. employment numbers currently and in 2000?

I also need employment numbers, global & U.S., for the following companies at the time Motorola purchased, sold or spun them off.

Good Technology, November, 2006
Symbol Technologies, January, 2007
Netopia, February, 2007
Tut systems, March, 2007

In September, 2001 Motorola spun off its government and defense business to
General Dynamics and in 2003 they spun off there semiconductor product sector. What was their employment numbers?

Were there any other companies acquired between 2001 & 2006?

Motorola History Of Layoffs

On January, 23 2002 IDG reporters George A. Chidi Jr. and Douglas F. Gray wrote:

“Motorola, which had 150,000 employees in August 2000, will have eliminated 42,900 jobs and transferred 5,500 employees by the end of this year, the company said in December.”

This year Motorola has announced 3,500 layoffs in January and 4,000 at the end of May.

There is more to this story, please see the above article and give us a hand.

Jul 9, 2007

Dell Computers; Layoffs, Issues And More Layoffs

We’ll have to wait-and-see who these layoffs affect. But layoffs aren’t the only part that will impact American jobs, Dell forecasts a 20% rise in Asian sales and will use this to shift an even higher percentage of their growth to that region.

Any discussion of the announced layoffs, of approximately 8,800 staffers at Dell, invites commentary into a number of other issues that are impacting the company. Since these “other” issues impact who will be let go, they will be touched on below.

Lately companies have been trying to down play their layoff and offshoring activity, hidden at the bottom of Dell’s “End-to-End Transformation” section of their May 31, 2007
Press Release:

“…As a part of this overall effort, Dell will reduce headcount by approximately 10 percent over the next 12 months. The reductions will vary across geographic regions, customer segments, and functions,…”

As written about in Call Centers: The Best And The Worst, a CRM Lowdown survey of the ACSI ,The American Customer Service Index, listed Dell as the worst company in America for Customer Service. Poor customer service has become legendary at Dell with bloggers dedicating entire sites just to handle their poor service and product issues. The company has responded in a number of different ways including a one2one blog so that dissatisfied customers can discuss their problem directly with a Dell employee, not necessarily someone who has a script and strict rules to follow. They have also added a problem resolution link to their web site so several layers of the service bureaucracy can be bypassed. From the same Press Release:

“Improved customer satisfaction ratings through increased investment in technical support resources like Dell Support Center and DellConnect. These investments helped the company achieve a 66 percent decrease in the number of times customers are transferred before their issue or question is resolved.”

The accounting investigation has caused Dell not to file Form 10-Q for the last four quarters, Dell has requested four extensions from the SEC, but the last approval only gave them till July 16, 2007. This date is from their
Press Release on July 3rd!

Also from Dell’s Press Release, the company to date has spent $46 million on this accounting investigation, there is little doubt that some of the layoffs will occur in the accounting department once the investigation concludes,

From an Associated Press article printed in the Greensboro News & Record

“It wasn't supposed to work like this. Paying $280 million to lure a Dell plant was supposed to ensure high-tech jobs at the computer maker and at ancillary businesses it would attract. Instead, Dell's health has faltered and 8,000 jobs will be cut in the next year.”

Two more articles:
Layoff report at NETWORKWORLD
One in Ten Dell Employees To Be Laid Off

Jul 6, 2007

Correction to Palm Posting

I was mistaken in my post concerning Palm Inc.. When I checked their web site and Press Releases, I could not find any information as to their employment numbers or layoffs.

The correct information from the Robert McMillan article:

"The layoffs, which occurred Thursday, affected "a small percentage" of Palm's approximately 1,200 employees and were concentrated in the company's development group, according to a company spokesman. They primarily affect Palm employees in the U.S., he added."

I apologise for any misstatements.

Palm Inc. Plans 1,200 Layoffs

From a Robert McMillan article in the layoff report at NETWORKWORLD, Palm Inc. has announced 1,200 layoffs that will happen mostly in the U.S. I could not find out where or when these layoffs will happen and Palm has no releases or info on their web site.

Intel Corp. An Interesting Twist About Their Layoffs

From another Ben Ames article in NETWORKWORLD, in August Intel Corporation will begin releasing 800, from a total staff of 1,300, from their Colorado Springs plant.

Intel has previously announced layoffs of 10,500 and these 800 look to be an addition to that number. I’ve written about Intel before in:
Intel Chipping Away Another 1,000 and Intel Investing 2.5B In New Plant – In China.

The Twist: The U.S. Department of Labor has denied an Intel request for a grant from the DOL’s Trade Adjustment Assistance (TAA) program. Under the TAA, funds are available to offset the cost providing career assistance to displaced workers.

Could Marvell be purchasing their chips from a foreign manufacturer that Intel has an interest in? Or is it that the DOL has decided not to reward a company that is moving so many jobs to lower cost labor areas.

LSI - Strategic Restructuring 900 To The Unemployment Line

LSI Corporation has accelerated their “Strategic Restructuring To Align Resources” which means 900 non-production workers will be “Restructured” sooner.

Companies that consistently try to spin events such as layoffs announcements, think that their smart and in control. If they were truly smart they would find a way to put such an enormous pool of talent to profitable use.

LSI Corp.
Press Release

Ben Ames wrote this article printed in the layoff report at NETWORKWORLD

Covad Shrinking 8%

Covad Communications will lay off 8% or approximately 75 staffers and all cuts is said to be completed by the time they made their short and sweet Press Release (pdf).

Stephen Lawson, from IDG News Service, penned this article about Covad Communications.

Jul 5, 2007

Movie Gallery Parent Of Hollywood Video Will Be Adding Pink Slips To Their Shelves

New article: Movie Gallery & Hollywood Video Gets Extension.

On July 2 Movie Gallery, which has 4,600 Movie Gallery, Hollywood Video & Game Crazy stores, issued a Press Release concerning their inability to meet all their credit terms. From the Press Release:

“The Company does not intend to comment further publicly with respect to its evaluation process of strategic and restructuring alternatives until its conclusion.”
Since the company is not going to openly discuss their restructuring plans, we’ll have to speculate.

Nowhere on Movie Gallery’s web site do they list how many employees they have, but I’ll estimate that a minimum of 100,000 jobs are at stake here.

From a
Birmingham Business Journal article by Cindy Crawford:

“Dothan's Movie Gallery Inc. saw stock shares plummet 65 percent Tuesday after reporting it could not meet financial obligations of a loan - and the company announced plans of a possible sale.”

“After markets closed Monday, the movie rental chain notified its lender, Goldman Sachs Credit Partners LP, that it could not meet covenants because of a "softer than expected" second quarter.”

It would appear that the company is in worse shape than their letting on, the restructuring of their senior debt only happened last February, and after one “softer than expected” quarter they are unable to meet their payments.

Joe Malugen, Chairman and CEO, presented this
Company Overview and Executive Summary (pdf) at the annual meeting just four weeks ago.

I see four possible futures for this company, from the best to the worst.

1. Merge or be bought out. This would result in quite a few closures but the remaining stores would be stronger. But with the prospects for the video rental industry continually looking worse, would anyone really want more retail outlets.
2. Close 30% to 50% of their units and hope to reemerge with a stronger base and then work at developing a reasonable online presence. The problem with that is there is a current price war in the online rental sector and if they want to jump into that sector, they will need deep pockets. Which we know they don’t have.
3. File for reorganization and close 50% to 75% of their stores and try to tough-it-out as a much smaller but stronger company. Again, the problem is that it takes a lot of money to close stores and they will need their creditors to take on the chin and then put up additional funds.
4. Fire sale. Get what they can for maybe 20% of their stores, file for bankruptcy and let their suppliers and employees take a substantial share of the loss. This should be what the creditors are pushing for, spread the pain around and reduce their negative exposure.

None of these scenarios are good for the employees. Tens of thousands will be laid off with little or no severance packages and no placement services. If there is a sudden and undisclosed closure of stores, paychecks could be at risk while attorneys let the courts work out the payroll situation. This is not as uncommon as it sounds.

Pass on any info you might have either in the comment section or by E-mail through my profile.

good article about Movie Gallery is by David Lieberman, in USA TODAY.

Jul 4, 2007

Fourth Of July - Celebrate Those Who Brought Us Our Land Of The Free

Ed Morrissey, on his Captain’s Quarters blog, quotes Independence Day speeches by Ronald Reagan and Abraham Lincoln. Take just a moment to remember that our fathers and their fathers spent their lives building a better life for all of us. Contemporary opinions seem to forget that and advocate that we will all be better off by sending our jobs overseas.

Michelle Malkin has a good post concerning something that affects all of us; assimilating the millions of immigrants that want to stay in America.

Citigroup Mixed Signals & None Good

Last April 1 wrote about Citigroup in Do You Work For Citigroup? This was just prior to their announcement of 17,000 and any details were weak at best. As some of the actual layoff decisions have been filtering out, other aspects have surfaced.

From the comments section of The New York Sun Cris Ericson theorizes on the Citigroup situation:

”Didn't some news source write that some Arab Prince shareholder decided that thousands of U.S. jobs should be cut at Citigroup to save shareholders like him money; and what is the relationship between this alleged Arab control of Citigroup now and September 11, 2001, if any?”

“Vice President Cheney's former company allegedly received billions of U.S. taxpayer dollars for no-bid contracts in Iraq and now has recently decided to move to Arab Dubai; are the Arab decision makers the same people as the Arab decision makers allegedly forcing thousands of layoffs of U.S. workers at Citigroup?”

From SchaeffersResearch.com Ian Stansel writes:

“As scheduled, Prince took the microphone at eight o'clock this morning to provide the details of the plan. The bulk of the money-saving will come from the cutting of 17,000 jobs. A majority of these jobs will be "back-office" positions, i.e. not traders, banker, or other employees who directly bring in money. In addition to these 17,000 jobs, another 9,500 positions will be outsourced to locations where the company can pay employees less. Through the job cuts, C aims to reduce expenses by $2.1 billion.”

According to
Neil Adler in the Baltimore Business Journal only 270 layoffs will impact the D.C., Maryland and Virginia areas. The #1LoansUSA.com web site reports:

“In Michigan, 200 workers at ABN AMRO Mortgage Group's former headquarters near Ann Arbor will be laid off as the headquarters is converted into a wholesale mortgage operations center, from the Ann Arbor News. The News also reported that Citigroup plans to close two offices in the Detroit area, eliminating another 570 jobs by the end of the year.”

“In Jacksonville, Fla., 550 employees at a customer servicing and call center were told their office will be closed by the end of the year, the Times-Union reported.”

Another side of Citigroup, from The Citigroup Watch on the Inner City Press:

‘Well today I had to deal w/Citi regarding my Pension. I left the organization in May 2003 after spending 14 years there. Remember, prior to working for Citi, I spent 5 yrs w/The Associates Financial Services. (Yes, what an idiot in professional compromise!) Prior to leaving in 5/03, I exercised what options that I could, and confirmed my pension status. I was informed at that time - verbally and in writing - that my tenure at The Associates was grandfathered into my tenure at Citi. I was given statistics regarding my pension income based on my monthly payments at 55 yrs of age (5/2015), and at 65 years of age. Imagine how relieved I was to find that my 190% commitment to this God Awful organization at least left me with a pension plan worth $932 per month if I retired at 55, or $1660 per month if I retired at 65.”

"Well, last year at this time I ordered the same bit of information in order to share it w/a financial person much more savvy at this business than I. I never got around to sharing that information w/him and in the meanwhile I had the info. So today requested said info again. Guess What? Now Citigroup tells me that I was not fully vested at The Associates nor at Citi, and my pension value is now $204 per month at 55, and $463 at 65!”

Jul 3, 2007

What’s The Chance Of Congress Passing Tort Reform?

Then Edward’s might have to get bargain-basement haircuts for $200.

From a
Cincinnati Business Courier article, by Washington Bureau Chief Kent Hoover, the cost of lawsuits or the measures taken to prevent them is costing Americas small business $98 billion a year.

The article states: “The study tracks damage awards, settlements, legal costs, liability insurance premiums and costs incurred by insurance companies on behalf of policy holders.”

This is from a
US Chamber Institute for Legal Reform study based on 2005 data. If you care to take a look at the study click: TORT LIABILITY COSTS FOR SMALL BUSINESS pdf required.

Since attorneys represent 25% to 50% of our state and federal legislators and 100% of our judiciary, the odds of effective tort reform getting passed is fodder for new lawyer jokes.

Jul 2, 2007

Companies Hiding Offshoring

Instead of shifting whole divisions overseas, U.S. companies are replacing their American workers in smaller groups. By not filling openings caused through normal attrition and transferring positions, as to allow the disbandment of the divisions destined to be offshored, companies do not have to file with or provide benefits that would be required by U.S, Department of Labor Worker Adjustment and Retraining Notification (WARN) Act.

This also allows companies to stay off the medias radar screen and avoid negative press.

From a
Mike Sunnucks article in the The Business Journal of Phoenix:

“U.S. employers are treading carefully these days when it comes to the outsourcing and offshoring of American jobs to India and other foreign markets.”

“Plenty of U.S. businesses are investing in India, either adding or moving jobs to call centers and technology hubs to that south Asia market. But in order to avoid criticism here at home, those companies emphasize that job shifts to India are about building a presence in the world's second-most populous country and leveraging resources in a competitive global marketplace.”

“Instead of shipping 500 U.S. jobs to Bangladore or Chennai all at once and enduring media criticism as well as displaced or anxious American workers, U.S. companies are offshoring in smaller, less obvious steps.”

“That includes looking to see whether positions can be shipped abroad when turnover occurs, and taking such steps with a smaller number of positions or work groups.“

Jul 1, 2007

Seagram's Distillery Gives Employees A Hangover

From a Cincinnati Business Courier article by Dan Monk a Senior Staff Reporter, new owners CL Financial Group of Trinidad and Tobago, will cut 270 workers from 160-year old Lawrenceburg, Indiana facility. The remaining staff will be offered reduced wage and benefit packages, union and company officials say.

More lost jobs, reduced wages and sold assets by foreign investors.

Practical Career Training For Ex-Military

U.S. Department of Labor Veterans' Employment and Training Service, through its Transition Assistance Program, has initiated a test pilot program that provides computer training to ex-military. The training allows the person to obtain a certificate in CompTIA A+ and is currently being taught in Jacksonville, Florida.

A good portion of the initial funding for this program has come from the Hewlett-Packard Co., and
CompTIA Education Foundation hopes to expand this training to New Horizons Computer Learning Centers across the country as additional funding becomes available.

This is a step in the right direction and we urge every ex-military person to apply. Even though the goal is to provide free training to 200 people per year, if thousands of applicants are submitted, I’ll bet that American tech companies will step up and provide the funding needed to get it done.