Tennessee Supporting Business

These are the types of programs we need to see more of. Preferably at the federal level.

I often have a problem the canned rhetoric that is constantly being printed about the need for higher education. That’s a nobrainer, what companies are very publicly calling for are highly skilled production workers. Those trained in robotics and engineering prints. Most companies are less than willing to incur the expense and time required to hire and send a new employee to specialized training only to have them leave for a variety of reasons.

From a Nashville Business Journal article by Gwenn Bradley, four years ago Tennessee started an Incumbent Worker Training Program as part of the Tennessee's Department of Labor & Workforce Development that aids companies in recovering the costs involved in that training. The success of this program is evident in the fact that it has grown 50% to 100% a year. This is type of program that all communities need to seriously look at because it creates a base of successful businesses with highly trained residents.

Layoffs No Longer Just Manufacturing

Kansas City Light & Power

In a press release from Kansas City Power & Light, they are purchasing Aquila Inc’s Missouri’s properties and plan to cut about 350 white collar jobs at Aquilas Kansas City operations.

From an article in the Kansas City Business Journal, by Jason Shaad:

“The majority of the job cuts will happen at the corporate level, in areas such as human resources, accounting, legal and communications, Aquila spokesman Al Butkus said.”

United Parcel Service

From an Atlanta Business Chronicle article:

“The Atlanta-based package shipper (NYSE: UPS) said 194 took the deal, which was offered in December to employees who were age 50 or older with at least 10 years of service. Normal retirement age at UPS is 65.”

“The buyout offer is part of UPS' attempts to consolidate corporate support functions in areas such as network planning, procurement, human resources, finance and sales.

”

Wheatland Tube

Wheatland is laying off 85 workers at three of it’s facilities, what makes this note worthy is that the layoffs is in defense of Chinese imports of lower priced pipe. The article in the Coshocton Times says that the layoffs represent 20% of the firms white collar staff. The article didn’t say how many of the layoffs are in the Coshocton area, but the mid Ohio city of Coshocton does not need any more layoffs or lost businesses.

American Axle & Manufacturing Holdings, Inc.

In a Business First of Buffalo article by Thomas Hartley AA & M is laying off 15% or 200 of it’s white collar staff. This follows nearly 1,500 blue collar production workers last year. This follows an undisclosed agreement that allows workers to be hired at rate that is less than half of the current wage. Quoted from the article:

“The company, which is the largest supplier of axles to General Motors Corp., also said it has a labor agreement with the United Auto Workers union that cuts by more than half the compensation for newly-hired production workers.”

(Wall Street applauds) “Shares of American Axle (NYSE: AXL) stock were up 19 cents to a 52-week high of $26.01 Friday afternoon.”

Ford Motor Company

This is just too big of a subject for this post so please see: At Ford Job # 1 Is To Leave Job

Masco Corporation

Masco, maker of Delta & Peerless Faucets along with Bahr Paints announced last week that they would cut 8,000 jobs by the end of the quarter. This is about 15% of their workforce.

If you follow the more contemporary economists the current decline in housing is not having an effect on the economy.

At Ford Job #1 Is To Leave Job

If your interested in what is happening at Ford, Sarah A. Webster a Free Press Business Writer, pens a must read article on freep.com. She paints a dismal picture of employee moral at Ford that is only aggravated after Ford’s proposed buyout offers were withdrawn for some of the anxious white collar staffers. The offer was originally targeted to trim 10,000 “white-collars” from Ford’s payroll, the overwhelming response in some departments, has caused Ford to rethink the program.

From the article:

“Ford began offering salaried workers three buyout packages in September 2006 in an effort to eliminate 10,000 positions. That was on top of 4,000 salaried jobs already slashed”

“Workers who talked to the Free Press said the high take rate on buyouts -- for both hourly and salaried workers -- shows employees have shaken confidence about management and the future of 103-year-old Ford…”

“Last fall,… Ford also targeted 30,000 hourly factory jobs to be eliminated… Ford reported that 38,000 UAW workers signed up for buyouts during a six-week window that opened Oct. 16 and closed Nov. 27.”

“But rescinding buyout offers for workers who want to leave is corrosive to Ford's already-dismal morale, a few of the employees told the Free Press.”

"My manager told me he knows everybody is looking for a new job," the marketing employee said. "I'm just disgusted with the entire company."

After reading the blogs by several of Ford employees, it seems that things aren’t as bad as the article portraits. The attitude from these blogs is that there is a lot of “noise” being made by a very vocal few. Things just aren’t as bad as being hyped in the press.

If 14,000 white collars are being let go, things just can’t be that great either.

50 & Overs Offered Separation Deal At UPS

194 UPS employees have accepted a buyout offer being offered to “50 and older” employees with 10 or more years of service. From a UPS press release:

ATLANTA, Feb. 28, 2007 - A voluntary separation offer made by UPS (NYSE:UPS) to a small group of corporate employees has been accepted by 194 individuals.

The offer was extended in December to employees who were age 50 or older with at least 10 years of service. Normal retirement age at UPS is 65.

As a result of the acceptances, UPS will record a one-time charge to expense of approximately $80 million during the first quarter of 2007. The company expects to generate a positive return on the program after two years.

The buyout offer was part of an on-going effort to consolidate corporate support functions in such areas as network planning, procurement, human resources, finance and sales.

Also from the UPS website Diversity Section:

Diversity at UPS/UPS People

Diversity and UPS PeopleUPS´s workforce is multicultural, multidimensional, and reflective of the broad attributes of our global communities. In fact, each year since 1999, UPS has been consecutively ranked by FORTUNE® magazine as one of the "50 Best Companies for Minorities."UPS understands that diversity encompasses more than ethnicity, gender, and age. It´s how employees think, the ideas they contribute, and their general attitude toward work and life.

UPS has every right to offer this separation package to staffers that are 50 and over in an attempt to get the best bang for its buck. But in doing so it is also sending a clear message to their other 400,000 employees how they feel towards their most experienced and seasoned staffers.

Layoffs - Hershey Kisses Workers Adios

The Hershey Company (HSY) announced a restructuring plan that includes downsizing the company from its current level of 13,000 workers to 11,500. The plan also calls for reducing U.S. and Canadian production from 90% to 80%. The 10% shortfall in capacity will be picked up by a new plant that should open in September of this year in Monterrey, Mexico.

As spokesperson for Hershey, Kirk Saville came off as indifferent in his statements to writer, Peter Jackson in his Associated Press article:

“Saville declined to discuss any details about the job cuts or the Mexico plant…. He said: Some will be expanded, some will be downsized and some will close, … We will communicate with our employees and (their) union representatives,"

Since the “workforce reduction” of 1,500 would also include the additional workers to be hired in Mexico, the U.S. and Canada cuts will have to be more than the quoted 1,500. Also quoted from the AP article:

“Dennis Bomberger, business manager for Chocolate Workers Local 464, which represents 2,500 workers at Hershey plants in Hershey and Reading, speculated that the actual job cuts could have to be deeper to achieve a net work force reduction of 1,500.”

"They're going to gain some jobs in Mexico ... so there's going to be a higher number lost" in the U.S. and Canada, Bomberger said. "Whenever they move something out the country, that's not good news for any company from the workers' standpoint."

From an earlier Reuters article written by Brad Dorfman:

“The moves come as the company looks to free up more money to spend on marketing as it tries to regain lost market share from archrival Mars Inc. The overhaul is expected to reduce annual costs by $170 million to $190 million by 2010.

“Hershey has been trying to increase sales by focusing on its traditional chocolate brands, while developing new lines like premium dark chocolate.”

“Hershey said it expects the new plant in Mexico to be running by September and to account for about 10 percent of the company's overall production by 2010. A spokesman declined to say how many people would work at the plant.”

Alcatel-Lucent To Cut 12,500 Blames A Change Of Spending Habits Since December As Cause

From an AP article printed in Forbes.com

Last year Lucent Technologies Inc. and Alcatel SA merged and this year their cutting 12,500 jobs from a worldwide base of 79,000 in 130 countries or almost 16% of their staff.

Lucent was the equipment manufacturing arm of AT&T, and was spun off in 1996. Last year they merged with Alcatel SA, a French Corporation, and became Alcatel Lucent. The deal was not finalized until December 1, 2006 and 11 weeks later they claim that the reductions are because “competition for wireless phones and a shift in North American telecoms spending habits.” All that happened in less than 3 months.

Press release for 2006 financial results and “synergy plan”: Alcatel-Lucent reports fourth quarter and full year 2006 results
Press release sites 1,462 cuts planned for France: Alcatel-Lucent announces restructuring plan for France

Anyone care to guess where the majority of the cuts will be.

Communities Recognize The Value Of Jobs

One Southern Indiana
From Business First of Louisville: “On July 1, the Southern Indiana Chamber of Commerce, the Southern Indiana Economic Develop­ment Council and Southern Indiana 2020 will be merged into a unified, business-support organization.”

“One Southern Indiana will help grow and retain existing businesses, attract new businesses to Southern Indiana, promote regional cooperation and plan long-term initiatives.”

From Business First Staff Writer Sarah Jeffords: “When Patrick Houghlin, executive vice president of Hitachi Cable Indiana, contacted One Southern Indiana about his company's plans to expand, he was pleasantly surprised by the chamber of commerce's rapid response.”

Portland, Oregon
Portland Business Journal, by Andy Giegerich staff writer: “The Four County Economic Development Corp. will begin shaping its policies in earnest Feb. 14 … the business-oriented group will study ways to promote the region's sustainability and manufacturing interests.”

“The group is expected to provide crucial support for industries in Clackamas, Clark, Multnomah and Washington counties. It will work with public agencies to stimulate regional job growth and economic development by recruiting new businesses. It's an initiative within the area's Regional Business Plan, which aims to create more area jobs.”

Atlanta, Georgia
From an Atlanta Business Chronicle article and written by Ryan Mahoney, Georgia’s Economic Commission has a new chief, Ken Stewart. Quoted from the article: “Stewart plans to pick up Gov. Sonny Perdue's vision for the state where Lesser left off: that of a world capital for trade, tourism, finance and industries such as logistics, life sciences and technology.”

“Stewart said the department should focus on fostering the best possible business climate.
That includes emphasizing the role of small and midsized companies, "the backbone of our economy," in addition to Fortune 500s, he said.”

More Atlanta; From the Atlanta Business Chronicle by Douglas Sams: "DeKalb County is making a bid for more biosciences jobs, … DeKalb has spent nearly $100,000 in recent months to fine-tune its strategy for growing its biosciences sector, which it hopes will include pharmaceutical, medical technology and vaccine development companies that often pay workers at least $20,000 more annually than their counterparts in other industries."

Northern Kentucky
Not all regional development groups have unlimited funds, from a Cincinnati Business Courier by Lucy May Tri-County Economic Development Foundation, or Tri-EF wants to broaden its funding base by raising more money from the private sector.

North Texas Commission
The North Texas Commission has produced a 24 page fully color glossy guide titled “America's Global Logistics Center” to spot-light the area’s well established supply chain industry.

From a Dallas Business Journal article by Margaret Allen the guide “cites a multitude of sources for facts that illustrate the region's strategic status as a competitive logistics player. It details the benefits of the region's location, its infrastructure and its supply chain assets, from airports and airlines to railroads, intermodal centers and academic institutions.”

Dayton, Ohio
From the Dayton Business Journal by Yvonne Teems the Dayton Development Coalition: "midst of a campaign to brand and market the Dayton region. The $1 million project now is in the research and information-gathering phase. Marketing materials will be unveiled in September followed by a rollout to the communities within the region, said Maureen Patterson, project manager."

Kansas City, Kansas
In the Kansas City Business Journal by Rob Roberts Senator Pat Roberts is spear-heading a 43 member commission to bring a new $450 million National Bio- and Agro-Defense Facility to the area. According to the article: “Roberts has been spurring research and technology efforts in Kansas since 1996, when he formed the blue-ribbon Advisory Committee on Science, Technology and the Future. An outgrowth was the 2002 Legislature's adoption of a $115 million plan to help build research facilities at state universities.”

“A resulting structure, Pat Roberts Hall, houses the new $54 million Biosecurity Research Institute at Kansas State University.”

Sacramento, California
From the Sacramento Business Journal by Michael Shaw: “The city of Sacramento is creating the capital's first true economic development department in an effort to attract more sales-tax revenue and corporate headquarters.”

“The proposal would increase staff and funding dedicated to attracting business, zone ready-to-build land for industry, bring retail back into the city and invest in projects rather than hand out city money in subsidies.”

San Francisco, California
From a Lizette Wilson article in the San Francisco Business Times: “Mayor Gavin Newsom is seeking to create a campus for clean technology companies, hoping to attract tech startups focused on solving environmental problems and create a cluster equal to the ones recently established in biotechnology and digital entertainment.”

“Newsom is expected to unveil details about the campus, plans for broad solar installations and other initiatives supporting the sector at the Cleantech Forum Feb. 21.”

“The annual conference is a "who's who" in the emerging industry attracting 600-plus venture capitalists, entrepreneurs and established executives, from Kleiner, Perkins, Caufield & Byers to Dow Chemical Co.”

Triad Region, North Carolina
I’ve written many times about the great job that North Carolina and specifically the North Carolinas Commerce Department headed up by Jonathan Marshall is doing to bring businesses to their state.

Articles about what North Carolina is doing to attract quality jobs; Another Win For North Carolina, North Carolina Gets Googled At A Cost Of $18,873 Per Employee For 30 Years, The Sun Belt Is Doing It Right, Imagine That – Governments Making Sense

Coke Is It, It = 3,500 Lost Jobs

From the Atlanta Business Chronicle: Coke Enterprises posts $1.1B loss, job cuts coming

“results for 2006 include a $2.9 billion non-cash impairment charge, restructuring charges, expenses related to expensing of stock options and net favorable tax items.”

There seems to be two common threads among quite a few of the current slew of restructuring announcements being released. After four years of strong growth companies have gone on a buying and expansion spree, part of the growing pains is the accumulation of some hefty costs and charges. And when these “charges” do hit the books, resulting in poor quarterly financial performance for the company, they can pull a restructuring plan out and site job cuts as the answer. That’s the easy way of saying they’re on top of things.

Last years explosion of ethanol plants has pushed the cost of corn up 50%, that along with a significant rise in the price of aluminum will result in a 9% increase to the cost of producing a case of Coke.

Since inflation has hit Coca-Cola Enterprises Inc. along with other bottlers and the employees must pay. I can only imagine how many jobs it will take to cover the “expenses related to expensing of stock options” .

Why Are Prescription Drugs So Expensive

As previously posted in my article Pfizer Has No Cure For Michigan’s Headache and Health Insurance The Wild Card the health care industry is operating outside of any economic realities. Costs have consistently raised at 2 to 3 times inflation, medical coverage has gone up so much and has become such a problem, that in a recent CNN survey 43% of company CEOs consider health insurance premiums the #1 threat to their companies future.

So it came as no surprise when I read Insiders article Pfizer's decimation - will the lobbyists be cut? On his/her blog PharmaGossip:

“According to the Centre for Responsive Politics, in 2005 there were 2,326 registered pharmaceutical lobbyists. That amounts to 4.3 lobbyists for every member of Congress, and the drug companies spent $146,783,853 on their efforts.”

”And the Center for Public Integrity reports that between 1998 and 2005, the industry spent over $675 million on federal lobbying”

What Makes Employees Happy

Every year Fortune Magazine features the 500 Best Companies To Work For. What makes these businesses so popular with their staffs? The perks vary greatly but there are two noticeable consistencies; first would be wages, since two of the top five are grocery stores with managers salaries under $50k and hourly under $12, it’s not amount but that it is in the upper 20% of comparable positions and second are the perks, not that they are overwhelming, but that they are special enough to make the staff members feel special.

If you want to see the top 100 list click here. After reviewing all the companies, the only common threads, as to why these companies were chosen, are low turnover rates and an extraordinarily high number of applications to available job openings. Both of which can have outside influences such as being located in an area with few available openings or an aggressive online presence that produces a large volume of applications.

Take a look, some are predictable and others, well I would need to see more evidence.

More Layoffs At Harley

From CrossingWall Street .com:

"In a statement posted on its Web site, dated February 5, Harley said it would reduce production of engines, transmissions and components at two plants that supply parts to the York facility. That will mean the temporary layoff of about 740 workers at the plants in Menomonee Falls and Tomahawk, Wisconsin, it said."

Constructive Opinion On The Harley Davidson Strike

Now, you Harley people don’t get me wrong. I think you deserve a much better contract and with the company making record profits, they should show their appreciation. BUT…

From the companies press release and confirmed by Harley employees:

“The company said its proposal included annual wage increases of 4 percent over three years. But part of the increase depended on the union agreeing to contribute toward health insurance coverage. Unionized employees currently pay no premium. It also would have doubled the company's 401(k) retirement plan contributions.”

...BUT. A four percent annual increase and doubling your 401s is more than fair, the two parts that everyone is having problems with are the takeaways. First and most important is the charge back for you health insurance, since I’m not privileged to what the charge back is, I’ll guess it’s equivalent to two percent or half of the raise. The second is the $2.50 reduction is starting salary. If that part is true, then a starting salary of $18.25 per hour just isn’t as bad as you guys are making it sound. My guess is that it’s the union trying to earn some of their keep. Unfair, yep but there is another side.

If you’ll look further down in this blog there are numerous articles about communities and States that make huge concessions to draw companies to their areas. Google just received over $18,000 per employee per year for 30 years, in reduced taxes, from North Carolina to get their 215 jobs. That’s over 100 million dollars. I feel that the union should get on the phone to Governor Rendall and every local and state Commissioner, Representative, Senator along with the BBB and all Development Groups in the area, to see what incentives local, county and state governments will throw into the kitty for Harley. Then they might feel like the union is working with them and more willing to take care of the crew at York.

The doors open for you to show everyone in the country how companies, unions and their people can work together.

Renewed Call For Reservists Legislation

As posted previously in Employers Snubbing Reservists employing reservists can be a risky endeavor for small business and a pain for larger companies. With 550,000 reservists called up since the beginning of the Iraq War, a majority of employers, albeit to themselves, resist hiring a reservist. Besides the inconvenience of losing a valued worker there are stiff penalties if something should happen.

Legislation is needed that offers employers tax credits that kick in when an employee returns to work from performing their reservists duties. Why hire someone if their work might be disrupted and all you have to look forward to is penalties. It time to provide a carrot to employers.

GE Is Moving Plant To Mexico

GE will be closing its 100 year old lamp plant in Wellston, Missouri on February 28. The operations for this 175 employee plant are moving to Mexico.

Me, I’m Supporting Little Caesars

I have long believed that if a you don’t like a business, don’t shop there. If you don’t like a show, don’t watch it. In turn when a business does something that impresses me, they win my support and business. My next pizza is a Little Ceasars.

Michael Ilitch, Founder and chairman of Little Caesars, did something that deserves as much publicity as possible. He read about about Doughty in a USA Today story and was so impressed with the 31-year-old Army staff sergeant that he called to thank him for his service to the country. They struck up a friendship, and Ilitch offered Doughty the franchise.

"Doughty stood strong for our country," Ilitch said in a news release. "I was so impressed that I wanted to do something."

Employees Locked Out At Harley Davidson

As of Thursday morning the 2,700 employees of the York, Pa. Harley Davidson Plant was locked out. According to articles, written by Andrea Maria Cecil in Sunday’s and today’s York Daily Record, 98% of the members of International Association of Machinists and Aerospace Workers Local 175 voted on Wednesday to reject Harley’s latest proposal and initiate a strike at 12:01 am. Friday.

At this time the terms of the proposed contract have not been disclosed, but a reader has commented that the company has requested employees accept a higher share of medical costs and reduced pension benefits. There was no reference to wages other than Harley had requested that new hires may be brought in at about ½ the current wage. As quoted by David J. Lynch, published in the Aug. 17, 2006 issue of USA TODAY:

“The venerable motorcycle maker, battered by Japanese rivals, came within an eyelash of bankruptcy in 1985. Harley slashed payroll, overhauled its factories and engineered a remarkable turnaround. The company has been profitable for 20 years and, in a nice irony, now enjoys the largest market share in Japan.”

This is the same plant that President Bush visited:

“Harley-Davidson's example also is something less than a pure free-trade success. In 1983, the company won special trade protection from the Reagan administration that raised tariffs on imported Japanese bikes to 49% from 4%. That gave Harley critical time to retool.”

“The president said such temporary protection is sometimes warranted. And Harley's robust workforce of more than 9,000 — roughly double the 1995 figure — underscores the point.”

In a company statement:

"Because of the union's intent to strike at midnight, not knowing how long that would last, we thought it was in the best interests of everyone to suspend badges and eletronic access to the facility, essentially giving employees a second day off with pay."

As quoted from The Auto Channel:

"Harley-Davidson has no business behaving like they're on the brink of bankruptcy," said Tom Buffenbarger, international president of the International Association of Machinists and Aerospace Workers (IAM). "When Harley was flat on its back in the 1980's, it was union members who refused to let it die. Harley went on to become an international success story but they've obviously forgotten how they got this far."

"They don't respect workers as much as their stock options," declared District 98 Directing Business Representative Tom Boger about company leaders who reported record revenue of more than $1.6 billion for the third quarter of last year.

At this point all parties need to take a step back. There are many communities that would pay Harley mucho buckos to move to their community. Google just received $100 million in tax discounts from North Carolina for a 215 employee server farm. We are in a highly competitive era and companies have more options than ever before. Someone has to give and I seriously hope it’s not the 2,700 workers at the York Harley plant. There just aren’t comparable jobs out there.

Health Insurance The Wild Card

An Associated Press story, no author given, discusses some of the problems presented by governments attempting to mandate solutions to the current lack of health care insurance in this country. The estimates of how many people are currently without any health coverage varies but approximately 60 million would be a fare number. What’s is even foggier and receives almost no media coverage are the numbers that are under insured. As employers and consumers fight to lower costs, insurance companies respond by offering plans that have restricted benefits and coverage.

As illustrated by writer Chris Lindberg article in People's Weekly World Newspaper:

“Recently a young family celebrated the birth of their child but soon received the sad news that the baby needed heart surgery. Their concern escalated when their health insurance company refused to pay for the surgery. Why? Because the heart problem was a “pre-existing condition.” Read on.”

“Tracy Pierce, 37, lived a full life. He grew up with family and faith. He went to a Catholic school, got married, had a son, and he even had the car of his dreams. It was the perfect life,” reported the Frankfort Indiana Times. But then Pierce was diagnosed with kidney cancer. For 15 months he suffered, while every treatment his doctors sought for him was denied by his insurance provider. First-Health Coventry deemed the treatments were either “not a medical necessity” or experimental. Even at the last stages of his life, he went without oral morphine for more than a week, because his insurance would not cover it.”

It been documented that over the last 6 years 11.5% of employers have dropped employer sponsored plans and nearly all have addressed the increase in costs by, either or both, reducing coverage benefits or transferring costs to the employee.

As state and now federal governments try to respond with an array of ideas and programs, solutions will get bogged down with a slew of litigation from health insurers, small business organizations, medical associations, pharmaceutical companies and political opponents which feel their solutions are superior.

In the last twenty years medical costs have increased more than double the inflation rate, and we all have heard or experienced how an illness at the end of someone’s life have wiped out an entire life work. We all should have adequate health coverage but the excesses in the medical system have to be addressed also.