Author Topic: Common Sense Has Left the Building... (Read 2738 times)

oboe · « **on:** February 04, 2007, 08:20:36 AM »

Ford is considering paying management bonuses after the largest annual loss in its 103-year history ($12.7 billion), and 40,000 jobs cut.

The workers that remain will rightly be asked to endure some kind of salary or benefit cuts, but this behavior is an example of what has me thinking the business model in America is broken.

Same kind of thing happened in Delphi's bankruptcy, only much worse. The demanded salary cuts were more than 2/3 of the worker's current wages, the retirees lost big in their pension (turned over to the PBGC), and jobs were moved offshore. All while top management raked in millions of dollars in bonus money.

Dago · « **Reply #1 on:** February 04, 2007, 08:31:59 AM »

This stuff slays me, you will read they "need" to pay the bonuses to retain the top management, you know, the guys who lead them into such a horrible financial situation.

Yeah, you really want to retain those kind of leaders.

lazs2 · « **Reply #2 on:** February 04, 2007, 10:25:21 AM »

Were would cuts do the most good? Top management of union workers? Were to the other successful car companies make cuts? What other company pays the same salary and benifiets and survives? Is it the jap companies? the germans?

lazs

Dago · « **Reply #3 on:** February 04, 2007, 10:45:13 AM »

Quote

Originally posted by lazs2
Were would cuts do the most good? Top management of union workers? Were to the other successful car companies make cuts? What other company pays the same salary and benifiets and survives? Is it the jap companies? the germans?

lazs

Not sure who you are addressing your question too, but rewarding leaders of failing companies is no cure.

A good leader would strive to find ways to deliver products the customer wants, he would look for everyway to make his company an efficient and innovative company utilizing technology and R&D to keep his product the best product at the best price possible.

Poor leaders spend time worrying about increasing their stock options, bonuses, and golden parachutes all the while handing out dictates that do not offer hope, and creating an office atmosphere requiring a yes-man mentality to survive.

Cuts may or not be necessary, but it would be impossible to sit here and state "cut management" or "cut production employees" without knowing the structure and staffing of an individual company.

AWMac · « **Reply #4 on:** February 04, 2007, 10:56:23 AM »

This is what I'm talking about!

We let this happen because everyone thinks that their voice does not count. Stifle the masses and the minority will follow.

Free America '08

Mac

lazs2 · « **Reply #5 on:** February 04, 2007, 10:59:47 AM »

poor leaders should not even be retained much less rewarded. If a company does that then they deserve to fail. If the worker costs are not competitive then they need to be adressed... either by increasing production or cutting labor. If a machine takes the place of 5 workers then you can pay a very high salary to the person who runs and maintains the machine for instance.

pretty simple stuff really.

lazs

Toad · « **Reply #6 on:** February 04, 2007, 11:13:30 AM »

However that is EXACTLY what happens Laz. Poor management gets incredible rewards because...they award it to themselves. Great system.

Ford is just the current, most recent example.

In my own experience, the exact same thing happened at Delta. It's a recurring event in US business.

I must say this gives me a chuckle wrt the recent "teh EvIl Unions" thread.

lazs2 · « **Reply #7 on:** February 04, 2007, 11:28:47 AM »

no problem toad... if a company rewards it's management for poor performance or pays it's workers too much or pays too many of em...

They deserve to go broke.

Someone with more sense will fill in the gap they leave.

lazs

AWMac · « **Reply #8 on:** February 04, 2007, 11:33:38 AM »

Quote

Originally posted by lazs2
poor leaders should not even be retained much less rewarded. If a company does that then they deserve to fail.

pretty simple stuff really.

lazs

Simple stuff? Not really.

I worked for LDDS (Long Distance Discount Service) and rode the elevator daily with Bernie Ebbers. Stayed on and we became WorldCom after the accusition of Wiltel. Later we merged with MFS and MCI. More and more accusitions.... Then the corruption set in.

Funny thing is WorldCom would do their layoffs in December and then have a job fair in January. Purpose was to eliminate positions and rehire into these positions paying less salary yet increasing the salary and stock options for the executives. Now they were sure they could get away with it all. Accounting started double billing customers thru IDB, MCI and WorldCom and beefing up their Quarterly Financial statements.
Although all of the internal audits of WorldCom showed imense growth it took a seperate independant audit to discover the scam. In the mean time Bernie as CEO decided to retire and take a BIG chunk of change with him. He was caught.

This is one example...

I left WorldCom before the crumble and moved onto Williams Communications. You can basically cut and paste from above, change the names and you have it. Rinse and Repeat.

Then with McLeodUSA. Twice as bad as WorldCom. Only no one went to prison. Prior to McLeodUSA going Chap 11 for the 2nd time within 4 Years the CEO and all of her cronies jump ship with outragous retirement benifits and salary. They also cut all of the customer service reps saying it was more cost efficient to move them to Cedar Rapids, IA. Did the Customer Rep Service move to Cedar after the layoffs? Nope it was outscourced to the Phillipines.

In the three examples I had given above, can you imagine how many Families were devastated by the actions of a few crooked CEO's and their cronies?

I was one.

Mac

Captain Virgil Hilts · « **Reply #9 on:** February 04, 2007, 11:36:09 AM »

Here's the problem: GREED

The reason the problems are not solved is that no one accepts their own responsibility. Because of GREED.

Management feels that as management, they are entitled to every dollar they can get for themselves, regardless of the consequences, and regardless of how well they do their job.

Labor feels that as labor, they are entitled to every dollar they can get for themselves, regardless of the consequences, and regardless of how well they do their job.

And the Japanese are kicking ALL their tulips with good management and lean manufacturing.

Look, one side is no more or less guilty than the other here, and they can either stop pointing at each other and decide to do something, or they can all go look for a job.

lazs2 · « **Reply #10 on:** February 04, 2007, 11:37:58 AM »

what is your point? that we need government control over how companies are run and what wages are paid?

If it is a bad company then you need to find another or accept that it may fold. Move on.

It is like you invest all your retirement in one companies stock and then act surprised when you go broke along with the company.

The solutions are all worse than the problem.

lazs

Toad · « **Reply #11 on:** February 04, 2007, 11:39:02 AM »

Quote

Originally posted by lazs2
no problem toad... if a company rewards it's management for poor performance or pays it's workers too much or pays too many of em...

They deserve to go broke.

Someone with more sense will fill in the gap they leave.

lazs

Yep, they go bankrupt. The top 22 dipshirts in the company (the ones that killed the company) take the money and run, leaving the rank-and-file with nothing. Delta? Enron? The story is always the same.

Quote

You see, Mullin has been employed by the airline for only five years and eight months. But a special pension plan that Delta's board created for top executives has credited him--shazam!--with another 22 years of service. Thanks to those phantom years, the 60-year-old CEO could walk away from the airline today and be entitled to receive a payout of about $1 million a year, starting at age 65, for the rest of his life.

And if the airline goes bankrupt, no problem: Special Delta-funded trusts protect the pensions of Mullin and 32 fellow executives from creditors. "During these very difficult times in the industry, the board decided that they needed to do something to retain qualified executives," explains a Delta spokesperson.

NIce touch there... their golden parachute is protectected from creditors. As for "retaining qualified executives"...bahwahahahahahaha. Qualified as Mickey O'Brannigan's pup maybe. Of course, they all left as soon as they were vested in the new system anyway. "Go on, take the money and run".

Yeah... that Union thread was a hoot.

hardtack · « **Reply #12 on:** February 04, 2007, 02:07:43 PM »

I agree with Savage that the root of the problem is greed, but disagree that the blame lies equally with both sides. Labor will bear the brunt of management's mistakes. While Labor's greed is punished, management's is instead rewarded handsomely. And the company is often ruined in the bargain.

The same thing happened at my last company. Big takeover by another company; talk of expansion soon dried up as merger integration costs climbed. Soon the talk was of benefit cuts and salary freezes, layoffs and offshoring. Then we found out the top executives had doubled and tripled their compensation while all this was going on.

Captain Virgil Hilts · « **Reply #13 on:** February 04, 2007, 02:16:29 PM »

Labor's greed is NOT always punished. Explain how a 95% of your regular working wage for NOT working is punishment. Because that is the AVERAGE pay of a UAW worker around here who is NOT working. Not to mention the rest of the "buy out" programs and such. Again we have the one side saying the other is the only one that gets "golden parachutes". How can you reasonably expect any company to pay any employee 95% of their regular wage to STAY HOME AND NOT WORK? Labor OR management.

In most of these companies (and I've had the misfortune to work in a bunch of them and have friends in most of the others) if labor AND management were paid strictly for what they produced most of them would never make minimum wage. I'd LOVE to see the bunch of them on COMMISSION or paid per piece.

Skuzzy · « **Reply #14 on:** February 04, 2007, 02:29:47 PM »

Quote

Originally posted by Toad
However that is EXACTLY what happens Laz. Poor management gets incredible rewards because...they award it to themselves. Great system.

Ford is just the current, most recent example.

In my own experience, the exact same thing happened at Delta. It's a recurring event in US business.

I must say this gives me a chuckle wrt the recent "teh EvIl Unions" thread.

Uh, the same thing happens in politics. How many times have you actually agreed with a pay raise for our political leaders?

Unions do not help with this problem at all. I know union supporters like to rationalize this, as a reason unions need to exist, but I'll bet you any amount you like,the unions at Ford will not be abel to do a dang thing about this. Just like the citizens of this country cannot do a thing about our political persons granting themselves pay raises when tey do not deserve them.

This is all about greed. Pure, simple, greed. The only way to eliminate the symptoms (greed) is to kill the disease. And like any disease, the longer we allow it to fester, unchecked, the worse it will get until the host finally dies.

We are never going to cure it. The people who make all the rules also are the largest abusers of the system. No checks and balances to ensure anything is fair.