Dell Computer: Déjà vu 8,800 Last Year, 8,800 This Year

Last year I wrote an article: Dell Computers; Layoffs, Issues And More Layoffs. At that time I had no idea that I would be writing practically the same article this year. But Dell is like their service, consistently bad.

Dell has never given out straight forward information about their plans for staff reductions but rather they throw out a target number for the national business media and the small local layoffs get reported on in the smaller news markets around the country. The most accurate information has come from a NETWORKWORLD article by Dan Nystedt and reports that Dell has already completed 3,200 layoffs with another 5,200 happening soon.

Even though desktop computer sales improved by 10% last year, they will be closing their desk top facility in Austin, Texas and many that aren’t losing their jobs will be forced to take unpaid time off.

For more than a year Dell has been going through an audit that they claim was caused by certain departments fudging their numbers. As a result they will restate their earnings reports from 2002 through 2006 by a mere $150 million. That's a lot of fudge.

Dell is also being sued on two fronts, first for not performing on their extended warranties sold directly to customers and second for falsely advertising the terms being offered by their company owned financial arm. It has been reported that Dell’s financing division is now up for sale.

Dell, IBM, Intel, Cisco, HP and Microsoft have all gazed into the crystal ball and have seen their future in Asia and India. Doing business in the U.S. has just become too tenuous.

Country of Origin COOL Will Finally Happen

According to the USDA website: “On May 13, 2002, the Farm Security and Rural Investment Act of 2002, more commonly known as the 2002 Farm Bill, became law.” This legislation was delayed twice and is now scheduled to be implemented September 8, this year.

The part that doesn’t make sense is that the fruit, meat and vegetables that we import are already identified, on the outside of there packaging, with the country of origin. It would be a small inconvenience to carry that information to the display. The only reasoning for not posting the Country of Origin with the product being sold would be that the retailer doesn’t want to handle the questions or comments that their customers might have.

But this is a huge step forward in the fight to keep jobs in America. Would Hershey be so aggressive in their closing of the Reading, Pa, plant if they knew that their Peppermint Patty Brand would have to be labeled “Hecho en Mexico”

Who Says Inflation Is Under Control

Consumer late payments at 16 year high. Could higher prices at the grocery check-out and at the fuel pump be putting the squeeze on our wallets?

Unemployment claims at there highest level in two years.

ATA Airlines shuts down stranding thousands and laying off 2,000. The cost of fuel was listed as one of the primary causes. Last week Aloha Airlines also shut-down operations.

Corn sets new record price of $6 per bushel. At least our all-knowing government officials tell us that inflation is under control.

Gasoline at new national record. Even with oil backing off there peaks, the cost of refined gasoline is starting its summer rise. Every spring refiners increase their crack spread (the mark-up on gasoline) to reflect the increase in demand. This process has just started.

Motorola disconnecting 2,600 more. Last year they had lay offs of 3,500 in January and 4,000 in May. During a cutting stretch in 2000 and 2001 their payroll shrank by more than 47,000 jobs.

Google planning to cut 25% in the Double-Click work force, in the U.S. that is.

Dell needs to find $3 billion more in cuts than the 8,800 they announced last year. From my article last July.

Merrill Lynch to lay off 4,000 to 7,000.

Schering-Plough will be cutting $1.5 billion a year in expenses, no estimate on how many jobs will be lost. Schering-Plough shares are down about 50 percent this year so heads have to roll.

Are you ready to pay for the poor Home Builders losses? Time to E-mail your congressmen.

NASA estimates as many as 7,300 will loose their jobs as the shuttle program ends in the next 2 ½ years.

La-Z-Boy is shipping jobs to Mexico, all of their cut and sew divisions will be relocated with no lay off estimates given.

Hamiliton Sundstrand will be completing its move to Singapore by lying off the last 65.

United Way officials in Dayton said record numbers of families are seeking emergency food assistance because of lay offs caused by the strike at Detroit-based American Axle & Manufacturing. My article: American Axle Moving More Jobs Out Of The U.S.

CBS Moves Ahead With Layoffs in News

1,500 Possible Layoffs at Freightliner Cleveland Plant. My previous article: Freightliner The Long Haul From North Carolina To Mexico

From the CoStar web site that monitors the Fed’s watch list:

The Federal Reserve Banks moved up the planned closing of several of its check processing facilities, most of the cuts will come from permanent result work reductions.

Newsweek announced that 111 staffers on its news and business sides in New York City accepted a buyout last week.

Chromcraft Revington Inc. is progressively shifting manufacturing of products from its Delphi, IN, plant at 1100 N. Washington St. to suppliers primarily in Asia. Manufacturing activities at the Delphi facility will conclude on May 30. The reduction in force is expected to impact approximately 150 Associates at the Delphi location. Within the past 18 months, the company has closed and sold its plants in Sumter, SC, and Warrenton, NC, as well as its warehouse and distribution center in Knoxville, TN. The company also relocated its upholstery operations into its existing facilities in Lincolnton, NC, and sold its upholstery plant.

EMI Christian Music Group confirms layoffs of between 1,500 to 2,000 staffers by this June.

Long-expected layoffs begin at W.Va. steel mill, from a peak of 13,000 to 1,000 after these latest cuts. Steel mills have been devastated throughout the northeast by Asian steel and like most of the problems facing America; all the politicians do is use this issue as political fodder.

Earlier this week, Wheeling-Pitt's parent, Esmark Inc., announced it would shut down a mill in Allenport, Pa., and idle parts of the operation in Martins Ferry, Ohio. Those cuts could cost as many as 360 jobs.

Analysts see 200,000 banking industry layoffs in the next 18 months.

Whirlpool, a great old Mexican brand. 350 Cleveland jobs go to Mexico. Behr Climate Systems plans layoffs, plant closure. From the Germany based Behr Groups web site: “Today we are active in all major markets in Asia and take advantage of the opportunities they offer.”

The Great Exploitation Of The American Worker

JCPenny is using Americana to sell their new line called “AmericanLiving”. With pictures of kids on tractors, seniors enjoying the American way of life, families on vacation, marching bands and young ballerinas they are shamelessly trying to use the pride we have in America to sell foreign products.

Just view their commercials and then try to find a label that says “Made in America”. Boycott JCPenny and let them know what you think. E-Mail link.

American Axle Moving More Jobs Out Of The U.S.

From a Buffalo News Business article by Fred O. Williams: “American Axle & Manufacturing confirmed plans to idle the company’s 734-job Buffalo plant — formerly the city’s largest source of factory jobs…”

What was interesting was the openness that Chief Executive Richard Dauch discussed the offshoring of U.S. jobs: “Seventy-five percent of new business backlog is sourced to non-U.S. facilities,”

From the article:

“The new orders will go to plants in Guanajuato, Mexico; Changshu, China; Araucaria, Brazil; and Olawa, Poland, he said. The business may also lead to construction of other non-U.S. plants.”

“The company said that costs at U.S. plants remain high, despite a buyout that erased 1,500 production jobs nationally”

‘“If you keep doing that, in America we’re going to be working for poverty wages,” said the man, who spoke on condition of anonymity for fear of some form of retribution.’

‘“Our profits are coming from overseas,” Chief Financial Officer Michael Simonte said during the conference call.’

Amkor Tech Packaging Up The Few U.S. Jobs Left

Amkor Technology is the world’s second largest contract chip packager. With 22,000 employees that work in 15 factories around the world, they are now releasing 150 out of 270 workers in their last U.S. factory. Located in North Carolina’s Research Triangle.

From an Amanda Jones Hoyle article in the Triangle Business Journal:

“The remaining 120 Triangle employees, mostly engineering staff, will focus on research and development. The RTP facility is Amkor's only remaining manufacturing plant in the United States.”

“The company acquired RTP-based Unitive and its Taiwan-based sister company, Unitive Semiconductor Taiwan Corp., in 2004. Its operations in Morrisville and on Cornwallis Road in RTP are what remain of Unitive, a company that was honored as the "North Carolina electronics company of the year" in 2003 by what is now called the North Carolina Chamber.”

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

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?

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.”

IUE threatens strike against Delphi By DON SHILLING VINDICATOR BUSINESS EDITOR

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.”

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.

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.

In 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.

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 India.”

“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.”

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.

Springs Global Not Much Left To Cut

From a Tribune-Times article penned By Business Editor, Woody White, Springs Global will close its two remaining plants in Fort Mill & Lancaster South Carolina. These final layoffs will put 750 out of work leaving U.S. employment at approximately 700 administrative and sales positions.

From the Companies web site:

“Founded in Fort Mill, S.C., as a single mill in 1887, our company evolved into Springs Mills and later Springs Industries, the leading home furnishings supplier in North America…” “…Major home furnishings brands include Wamsutta®, Springmaid®, Artex®, Regal®, and Dundee®.”

“We employ about 20,000 people worldwide and have operations in Argentina, Brazil, Canada, Mexico and the United States. Springs Global is based in Brazil. North American headquarters are in Fort Mill, S.C.”

From The (Rock Hill) Herald by Charles D. Perry:

“At its zenith 20 years ago, the company was the state’s largest private employer, with 17,000 South Carolina workers. A total of 23,500 people worked for the company worldwide.”

Hanesbrands Continues Globalization

I recently watched a Fox News interview with two economists, names forgotten but they had very impressive titles, who expressed their opinion that the average American doesn’t get it. With “it” being that sending U.S. jobs overseas is ultimately good for the U.S.

Personally I feel that it’s the “experts” that don’t get it. We are losing millions of better paying jobs and replacing them with lower paying service positions. The experts point to the unemployment at 4.5% as proof positive that globalization is working. I have to wonder what the economic support for their grandkids jobs will be.

I wrote in: Hanesbrands Closes Winston-Salem Plant Laying Off 610, that textile jobs have flowed out of the Carolinas for years. South Carolina had 122,000 textile jobs in 1994 and have lost 75% of those jobs to a current low of 31,000.

H. Martin Lancaster, President of the Carolinas Textile Club is quoted in a 2000 statement:

“With 2 million jobs, textiles are the largest manufacturing sector in the U.S. and contributes more to the Gross Domestic Product than metals automobiles, paper or petroleum production. We are very proud that North Carolina, with almost 150,000 jobs, is the leading textile state in the nation.”

That was 2000. From Duke University in 2005:

“In 1995, there were 2,235 textile and apparel plants in North Carolina employing 252,704 people. By 2005, there had been a 37% decline in the number of plants, to 1,402 plants, and a 61% decrease in employment to 97,525 workers”

In 2006 North Carolina has lost an additional 20,000 textile jobs.

In a statement from N.C. governor Mike Easley:

“A recent study by the American Textile Manufacturers Institute declared that unless action is taken, particularly against textile imports from China, the Chinese share of the U.S. textile and apparel market will rise to more than two-thirds within two years, from a 13 percent share in 2002 to a 71 percent share in 2006. That would result, by 2006, in a loss of 85,000 jobs in North Carolina.”

“Total U.S. textile job losses could reach 630,000 from 2004 to 2006, the Institute study warned, with more than 1,300 American textile plants closing in the next three years.”

Hanesbrands Inc. Press Release:

Hanesbrands Inc. Advances Planned Consolidation and Globalization Strategy to Further Improve Cost Competitiveness

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 OregonLive.com 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.”

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 list.

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.

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.

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.”