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B4 The Bell Moonday March 29, 2004


Guest yobob1

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FYI: http://melduke.blogspot.com/

 

3/29/04 Extortion

 

Joshua Shapiro: ?This is a different business cycle. To the extent that companies can squeeze another drop of blood out of their existing work force, they?re doing it. Eventually you reach the point where there?s no more blood to be given, but we haven?t reached it yet.?

 

For a few years I have written about the limited pricing power of companies. At the same time, as real wages have declined and work hours have been reduced, the American worker?s bargaining position with its employer weakened. A new low was recently reached. Not surprisingly, Boeing was the instigator. The incident occurred within the company?s Shared Services Group, which provides support to Boeing?s other business units. The division employs close to 16,000 and is based in Bellevue, Washington. The company?s desktop-computer support staff in Washington and Kansas was given an ultimatum?either at least match Dell?s bid to do their work or else be fired. An audit by Gartner Group indicated that Dell could provide computer support for 37% less than the current in-house cost. The 200 people impacted have until April 16 to at least match Dell?s proposals. Boeing spokesperson Bob Jorgenson stated ?the Boeing group is outstanding. The quality of their service is equal to the best in the market that we can find externally. However, the cost of delivery is significantly higher.? The head of the Shared Services Group has ordered cost studies in every department. Jorgensen observed that the division?s performance would be judged against standards set by the marketplace. Ultimately, the in-house Boeing support group will provide more efficiencies; however, to compete against Dell, fewer people would be employed. Charles Bofferding, executive director of the Society of Professional Engineering Employees in Aerospace stated ?absent a commitment to employees to retrain them and find them other jobs, this feels an awful like extortion.? It is necessary to realize that costs are important. Having run many companies, I fully realize this. On the other hand, loyalty, seniority, and sense of security play an important part in the workplace. The Boeing situation should have been handled entirely differently. The workers should have been made a strategic part of the decision-making process on how to best reduce costs. Often the workers themselves have better ideas than those in managerial positions. You don?t have to look for employment for 20 months to be a discouraged worker. You can work for Boeing and be given an ultimatum.

 

While we are on the subject of Boeing, let?s look at their participation in bidding on an Air Force contract for 100 aerial refueling tankers. An audit report of the bidding process will be released shortly. It will show that the Air Force had requested 26 capabilities for the refueling tankers. Boeing, during the negotiating process, eliminated 19 of the 26 capabilities. On the other hand, Airbus complied with 20 of the 26 capabilities. Air Force Undersecretary for Acquisitions Marvin Sambur stated ?this was not a competitive process. The Air Force was ordered by Congress to work with Boeing on the new tanker program.? Bush?s chief of staff, Andrew Card, was the point man on the deal. Boeing emails indicate that Card was mainly interested in the jobs the contract would create. Boeing claimed 28,000 new jobs would be added to the payroll. Roche, the Air Force secretary, claimed the number would be 39,000. The audit indicated the negotiations reflected ?unsound acquisition and procurement practices.? Maybe the Congress should give an ultimatum to Boeing?change your ways or be barred from bidding on future government contracts. We are talking about $23.5 billion of taxpayer money.

 

The Philadelphia Metro area has been hit by two plat closings. Gross-Given Manufacturing, a vending machine company, will close its plant this month and lay off 113 workers. Mail-Well Envelope Co. will close its doors in May and eliminate 125 jobs.

 

From July 2000 until August 2003, Maine lost 17,800 manufacturing jobs, a loss of 22.1% and a greater percentage reduction than any other state in the nation, stated Maine AFL-CIO President Edward Gorham. This loss does not take into account the hundreds of paper employees who lost their jobs through the recent closing of the Eastern Pulp and Paper mills in Brewer and Lincoln, Maine. These two mills employed more than 750 people. Over all, in the last two years, there has been a 3% decline in New England employment, including 150,000 jobs lost in manufacturing.

 

When viewing March?s employment numbers, at least one sector will not be mentioned. There are a growing number of ?underemployed? workers, those that take any job they could get rather than risk unemployment. According to various studies, they have too much experience or education and receive wages often far below their previous employment. In addition, it would be wise to focus on the number of people participating in the work force. Over the past three years, there has been a 1% drop in the participation rate due to the weak labor market. That rate is understated with the 1million+ unemployed having lost their benefits since December 21. In sum, there are less people in the workplace. That is a fact.

 

James Chanos: ?One of the biggest components of a car?s costs are the legacy healthcare and pension benefits for people who don?t even work there any more.?

 

Marc Faber: ?In the past I have had the tendency to dismiss the deflationist views of some reputed economists and strategists as unlikely. I now feel the current universal asset inflation and overheated Chinese economy will be followed by a serious bust and asset deflation, which will kill consumption in the U.S. The only question is when.?

 

Personal savings increased to 1.9% of disposable income in February, up from January?s 1.8%.

 

Bruce Karatz, chairman and chief executive of KB Home: ?Industry seems to have gotten very used to the idea of hiring slowly.? :cry:

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Actually, theres the DU forum and the freepers - what a sorry state of affairs.

 

Listened to Nader on Cspan last night. Honestly, he is the ony candidate who makes sense to me.

 

Actually Brian - better places usually welcome me and my lovely wife, as we tip well and always try to bring someting to the party.

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from the March 30, 2004 edition

 

Rice should do the right thing

WASHINGTON ? Follow the bouncing story line. Richard Clarke, the White House former antiterrorism tsar, wasn't in the White House antiterror loop, Vice President Dick Cheney says.

 

No, wait, he was in the loop, says National Security Adviser Condoleezza Rice; he is just wrong about what was going on in the loop.

 

But, truth be told, it doesn't matter whether he was in or out of the loop because, according to Senate majority leader Bill Frist, and the White House, and various voices on the right, he is a disloyal, lying war profiteer.

 

If you've forgotten what it looks like when the wheels come off an administration, you're seeing it happen before your eyes.

 

http://www.csmonitor.com/2004/0330/p09s01-codc.html

 

"Keep your eye on the donut and not on the hole!"

 

I have observed that the problem is not Condi/Clarke, et al, but rather a huge problem in the whole system. The top guys only listened to the top guys while the front line guys were not in the loop or even sure of what they were to do. Channels of communication were not effective, if they even existed at all. Certainly there was an absence of people checking to see if their msgs/guidance were received anywhere or acted on. The NORAD failure is inexcusable, IMHO. Dreadful situation.

 

Prior to my yrs of "budget work" for the Army, I worked as a "process consultant" or Organizational Effectiveness consultant. How do we go about getting things done, what processes are involved, who talks to whom, what resources are available,etc. As a Staff Officer, I went into large govt organizations to help improve things. Meant talking to people at all levels, looking at policies and procedures, and after making recommendations, sticking around to see that changes were implemented. Mostly Officers were in this career area. When the Army was reduced in size, these positions were all cancelled. Too bad, because the technology of same if desperately needed now.

 

Anyway, from your post I found a link that suggests the same. About the first I have seen that's got it right.

http://www.csmonitor.com/2004/0330/p01s02-uspo.html

 

If we look at resources, the entire top six group were pros in Soviet and Eastern Europe politics/policies/thinking (and oil?). Where were our top people knowledgeable in Middle Eastern affairs? We didn't even have translators! This discrepancy alone gives me deep concern.

 

I am wondering what collapses first, the market or our war strategy.

 

Sherlock

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Our OPEC 'allies' are not inclined to see oil prices dip very much:

 

Saudi Arabia to call for Opec output cut

Published: March 30 2004 0:56

 

Saudi Arabia will on Tuesday push the Organisation of Petroleum Exporting Countries to cut output despite some members' opposition and high oil prices.

 

Ali Naimi, Saudia Arabia's energy minister, late on Monday told Felipe Calder?n, his Mexican counterpart, that the market looked over-supplied and that the kingdom feared a serious price drop in the coming months if the oil cartel did not act immediately, people close to the meeting said.

 

People present at the meeting said that they interpreted Mr Naimi's position as being opposed to the idea of postponing the 1m barrel a day reduction in Opec's quota decided in Algiers last month. But Opec on Tuesday will negotiate the details of its decision and a final announcement is expected on Wednesday.

 

Saudi Arabia is by far Opec's most influential member and the news of its position, which it has kept quiet in the run-up to the meeting, is likely to send oil prices higher.

 

http://news.ft.com/servlet/ContentServer?p...p=1012571727088

 

PS Sherlock - good post. Why did all our defenses fail on 9/11? Our enemies in China and the ME have probably noted this more than anything else.

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