Monday, February 02, 2009

Disney Doldrums

I wandered through the Disney Animation Studio this afternoon. Maybe the mood I encountered was associated with this:

Walt Disney (DIS) ... contributed to the Dow’s downturn in the session as shares fell nearly 3% on economic data that showed consumer spending fell for the sixth consecutive month in December, capping the worst year for the reading since 1961 ...

Okay, maybe it isn't the declining stock price. But the first thing I encounter on the first floor of the hat building was a grimace from a veteran Disneyite.

"Morale around here isn't too good ... like it's tense ..."

Nobody I talked to is unhappy with the films now in work. The discontent comes from the continuing waves of layoffs.

Also the wage reductions.

Up on the second floor a c.g. person stopped me in the hall and asked: Is there anything we can do about the 45 hour workweek at the same pay?" He wasn't pleased when I told him "No."

Another artist, when I asked how work was going, replied: I'm having 18% less fun." (referencing her 18% pay cut.)

And a mid-building group wanted an impromptu meeting, so we held one in their room. As one of them said: "After a big round of layoffs, management told us that there wasn't going to be anymore, then there was more layoffs. We just don't believe a lot of what we get told..." I didn't have much in the way of a pithy reply.

There's belt-tightening going on at lots of L.A. animation studios. It isn't just Disney. I told this to a number of Disney employees. For some reason spirits weren't buoyed.

It isn't just Disney stock that's down.

36 comments:

Anonymous said...

Come on, they are complaining about 45 hr week and 18% pay cut... they really need to open their eyes and look around...

Anonymous said...

Pay cuts and layoffs have yet to hit DreamWorks, but yes their stock is down as well. I believe that JK is doing everything that he can do to prevent this from happening. With the economy in a free fall and no end in sight no studio can be completely safe.

Anonymous said...

Hey, I'm not complaining that I still have a job. At the same time, I can understand why some of my co-workers aren't exactly skipping down the halls.

Hey, if home prices keep falling, an 18% wage cut will seem like a gain! AWESOME!

Jeremy said...

Both Disney crews are going to do fantastic work! I have great admiration and respect for the talent on both teams especially when times are tough.

Anonymous said...

Is there anything we can do about the 45 hour workweek at the same pay?" He wasn't pleased when I told him "No."


There is something we employees of Disney could do in response. If we're getting the same pay for an extra hour of work each day, then we can simply perform the same amount of work in 9 hours as we would've in 8.

In other words, an extra hour for socializing, phone calls, surfing the web, chatting in the halls, or whatever. Use that extra 1 hour to do with whatever you like, inside the workplace.

I'm not suggesting it's the most professional thing to do, but on the other hand, if management is using strong-arm tactics as they are, I'm saying two can play at that game.

And as long as you get your shot done by the end of the week, no negative consequence will result. In fact, they won't even know.

Anonymous said...

Is the work being managed in a way that allows for people to actually get their work done in a 45 hour week? Or is it the usual mis-management that requires massive overtime towards the end of production with only the hope of a layoff once finished?

Anonymous said...

I have to agree with the very first comment in this post. Give me a break. Welcome to 2009. I'm tired of hearing people cry glass half empty when their own cup is half full. its a lot worse out there than 5 more hours of work.

Anonymous said...

I believe that JK is doing everything that he can do to prevent this from happening.

Doubt he can do anything. Eventually it'll hit everyone.

Anonymous said...

> Come on, they are complaining about
> 45 hr week and 18% pay cut... they
> really need to open their eyes and
> look around...

I'm sure you've complained about far less in your own life and career.

Anonymous said...

Going from a 40 to a 45 is one less hour per day that you spend with your wife and kids. An 18% pay cut is a real material hit to your standard of living. So, the complaints are quite understandable. I trust that the powers-that-be are leading by example with the pay cuts.

Anonymous said...

No, they're not. This is for hourly production employees only. As they explained it, overhead is not the problem, the cost of production labor on the movies is the problem.

Anonymous said...

The 'problem' is not actually a problem at all. It is actually the solution that capital markets require corporate boards to employ to protect dividends in stormy seas. This is nothing new. You just notice it now because the financial arcs have changed direction more quickly than usual. It's like having a train speeding along a track at full speed. At full speed, it appears like everyone is on the same track. But when a bear suddenly wanders onto the track, it becomes clear very quickly we are on two separate trains, one very small and one very large - and they are on two separate tracks. And the smaller train, the Oligarchy Express, has much better brakes.

Wall Street knows this, the financial lobbyists know this, the entire Senate knows this, and every international conglomerate knows this. It is unclear that the House nor our newly elected president truly knows this. I mean truly knows how entrenched the oligarchy is.

Because of the whiplash nature of the market snap, we get to see where the loyalties are. They all prefer we didn't notice, like when times are good. But at the end of the day, US economic power is not looking a whole lot different than every other rigged system through history.

Anonymous said...

Since Pixar pays some of the lowest wages in the industry I bet they can't understand why people in LA get paid "so much".

Anonymous said...

Did some Disney employees that were hired at scale not get raises when they got bumped up to 45hrs ?
Yes it sucks to get a pay cut , but it sucks a whole lot more trying to get through on the phone to EDD to collect $450 a week. These wage reductions are industry wide. Happy 2009 !

Anonymous said...

There is something we employees of Disney could do in response. If we're getting the same pay for an extra hour of work each day, then we can simply perform the same amount of work in 9 hours as we would've in 8.

In other words, an extra hour for socializing, phone calls, surfing the web, chatting in the halls, or whatever. Use that extra 1 hour to do with whatever you like, inside the workplace.

I'm not suggesting it's the most professional thing to do, but on the other hand, if management is using strong-arm tactics as they are, I'm saying two can play at that game.

And as long as you get your shot done by the end of the week, no negative consequence will result. In fact, they won't even know.


The smartest response in this thread.

The artists will get crapped on as much as they want to take. Going on strike isn't the answer, whining like a little girl isn't going to make change happen for the better.

Get smart.

Anonymous said...

The change to a 45 hour work week does not result in a change to their weekly pay checks. They get paid the same amount every week as they were before, they are just working an extra 5 hours to get it.

The reason for the changes is clear. Disney's movies are the cost leader in the industry, and they are WAY below the revenue leader. The single largest cost in making a movie is labor.

I can tell you for a fact that none of Disney's movies in the last 5 years have made a profit. The alternative is to shut down Disney Animation and lay off everyone. If Disney's next couple of movies perform poorly I can guarantee you that is what will happen.

Anonymous said...

And why IS Disney the cost leader?

Answer: unbelievably inefficient story creation/approval process. NOT the rest of the crew. Yet the rest of the crew must suffer a pay consequence.

Dreamworks pays its employees MORE, and yet, makes its movies for LESS. Why? Because it doesn't take EIGHT YEARS to get a story approved. The amount of money Disney wasted getting the stories in shape for Bolt (American Dog), and Rapunzel is staggering. And because of that, much of the crew is forced to sit around and wait for something to get approved.

Fix that, and suddenly you'll make movies within a very reasonable budget. Bolt's story was essentially re-created from scratch in ONE YEAR. The same is happening for Rapunzel. Let this be a lesson. If you force your story crew to come up with a great story in a year, they can do it.

I note that the threat of not working that extra FREE hour put a little scare into the management person who responded here. That should give everyone an indication of how effective this tactic would be. Note to management: if, say, the top 10% of management had volunteered to cut their salary by 18% as a token gesture of solidarity, your claims of cost-saving for the good of the studio would have more weight. But no, you only expect sacrifice from others.

Anonymous said...

How about NOT making films in the most expensive place on earth? Pixar and Disney budgets would be cut in HALF if they were done in Saskatchewan or Kentucky.

"but how are they going to get people to go work in those places?.."

Really? Is that really an argument anymore? Cost of living, utilities, tax credits, employees can actually afford housing..gasp!, the list goes on.

With the internet, satelites and whatnot, there's no reason to say in California. Does Dreamworks need to be near Jack Black's house? They could record his audio on an ISDN line from his home.

Some studios are trying this, like Sony in NM. Yeah sure moving a company to another state might not work if leadership is poor, but at least it would be a step in the right direction to cutting costs.

Anonymous said...

How long did Shrek take? What was it, six years? Dreamworks is by far an efficient machine.

Why else do you think Hollywood is in love with sequels, spin-offs, and built-in audience. It is not necessarily expensive to create something new. But it is expensive for big, fat, and old dinosaurs to do it. And we all know why - people don't take jobs at major studios to draw small checks. They go to deep pockets because studios are deep pockets. If you don't draw a large check at the outset, you know that if you can stick it out long enough, the check has the potential to grow. And you know that the conglomerate has a much longer shelf life than the small shop down the street, so you know can park yourself for a while and make some long term personal decisions.

Working for a major corporation is really no different than working for the government. The whole argument over public vs. private has always been a moot point in the context of big money America. Private enterprise? Puh-leeze.

Anonymous said...

California as a whole is a definite money hog. The overhead rate just for facilities is probably the cost of some films whole budgets. Good point to the person above who mentioned the California cost impact.

Sadly California leads the country with the largest amount of its residents leaving and moving out in a year.

not sure what the fix is here considering the state is near bankrupt and will be handing out IOU's for tax returns.

I wonder how the state would feel if its citizens gave them an IOU?

Anonymous said...

There is a long list of studios that have spent a small fortune creating satellite divisions in "cheaper" places, only to have to close down those facilities within a few years. There's also the studios that have relocated completely to cheaper places, and the studios that were purposefully created in the boondocks just to get these supposed cost savings -- both those lists are studded with expensive failures, and almost no demonstrable successes.

There are only a very few places on earth that are sufficient magnets for the talent, technology, and money that gets quality feature animation made. Two of those places are in California, and no cold-blooded accounting mathematics is going to change that.

Anonymous said...

Really? Is that really an argument anymore? Cost of living, utilities, tax credits, employees can actually afford housing..gasp!, the list goes on.


There is an argument. A problem is, if you have a facility in New Mexico, or Portland... Those people are on an island. If there are layoffs (Portland recently) then there is NOTHING there. They have to move to find more work. Great for nomads. Not so great for everyone else. And in this day of show hires, who wants to do that? Unless you are really young with no family, it sucks!

On the other hand, if DWA, Disney, Sony all got together and decided to move shop to another city somewhere. Then it would work. But that ain't going to happen.

And as far as working remotely from home. Forget it. That methodology works in small scale but when you're doing a feature, you need that day to day face to face interaction. ReelFX does it to a certain extent. But they are only doing limited remote work.

mark said...

You might have seen this video of Peter Schiff on Fox News giving an accurate predictions in 2006 and 07 about the economy. If you haven't, its an amazing compilation that shows how dead on he was.

http://www.boingboing.net/2008/11/24/in-2007-pundits-scof.html

Anonymous said...

"After months of making hard decisions across our businesses to help us adjust to a weakening economy, we’re now faced with the harsh reality of having to eliminate jobs in some areas."

To protect the established hierarchy.

"This was not an easy decision, nor one made lightly. The people affected today are our friends and colleagues, and we are doing all we can for them and their families during what we know will be a difficult transition."

To protect the established oligarchy.


"Change is never easy, and becomes even harder to embrace during times of turbulence and uncertainty. With that in mind, I've asked each business leader to reach out to their group with more information on this announcement as soon as possible." -Anne Sweeney

What more information does one need about the most effective method CEO's employ to protect the establishment when times are tough.

The econmy is good, they win. The economy is bad, they win. They just win.

They are 'family', right?

Kevin Geiger said...

> As they explained it, overhead is
> not the problem, the cost of
> production labor on the movies
> is the problem.

Cost of production labor is only a problem when factored against development hell and inefficient production practices.

(labor) x (decisions) = cost

Anonymous said...

So maybe the reduced rates for over scale combined with more work hours will equal better production costs.

Anonymous said...

"Dreamworks pays its employees MORE, and yet, makes its movies for LESS. Why? Because it doesn't take EIGHT YEARS to get a story approved."

It shows.

Anonymous said...

It shows.

I won't argue that a number of Dreamworks' stories have been less than great--some even horrible.

Yet they also have their fair share of decent stories, and KFP was Pixar-worthy, and terrific.

And clearly they must be doing something right, because they've now made a slew of animated features that have made a TON of money.

Disney, with all its countless years of story development, years and years for American Dog and Rapunzel (and Chicken Little, with its wildly inflated budget), has yet to make anywhere close to its money back.

Anonymous said...

I think some of the artists who keep complaining are just going to have to swallow a concept called "reality". They are working in a business that does not provide a necessary service. They make *entertainment*. That's it. It's not involved with necessities like food, shelter and clothing. It's extremely volatile. So they should just quit whining for god's sake and deal with it! As for moving the studios from California, now that's something I can get behind. California is going down the toilet faster than a greased turd. It's become a sanctuary city, a welfare state and a vast wasteland of leeches, perverts, clueless politicians and dumbass celebrities. Moving animation out of California only makes sense. You don't need movie stars to make an animated film (at least you don't need them on location; they can literally phone in their performances), and there's plenty of talent living elsewhere in this country. Maybe Iger and Katzenberg should think about pulling up stakes and moving to Missouri or Chicago or Kansas. Especially Iger. Walt Disney got his start in Kansas City, MO. Iger could start a new tradition in the Show Me State. It's a thought...

Anonymous said...

^
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obviously a mid-westerner.

Dear yahoo - In SoCal, shelter and clothing are completely discretionary. And the food grows year round on the trees in our backyards.

But you take away Family Guy from that drunk NRA s**thead holed up in his basement during a nine month negative ten degree wind chill winter in Milwaukee, I guarantee you that a lot of people are going to die.

Anonymous said...

"Maybe Iger and Katzenberg should think about pulling up stakes and moving to Missouri or Chicago or Kansas. "

Gee or maybe someplace warm, but with a lower cost of living than Southern CA .... let me see ... Orlando, FL ?

There's even a big building there in Orlando with ANIMATION over the front entrance in big letters. And that building seems almost like it was custom-designed to be a state-of-the-art animation studio . How about that ?

Kevin Geiger said...

> So maybe the reduced rates for over
> scale combined with more work
> hours will equal better production
> costs.

Sure, the same way that turning down your thermostat helps cut down your heating bill.

But it still makes sense to insulate the leaks in your doors and windows.

Anonymous said...

Forget New Mexico, Missouri, or whatever boonie-town you can think of.

Tell em to move to India! IBM is offering jobs in India for laid off workers and in India they work more than 45 hours. They would save so much money.

Slumdog was made there and its about to take best picture.

But seriously, talk to the people who were lured into contracts with Laika and moved to Portland only to lose their job a few months later. Talk to the Sony people who bought homes in NM at peak levels and are realizing they might lose their jobs at some point.

Welcome to a world without rules!!!

Kevin Geiger said...

Floyd Norman's call for the death of digital at WDAS can't be helping spirits much:
http://tinyurl.com/bj9y3p

Some observations in turn:
http://tinyurl.com/czt9n9

KG

DouchieMcDouchebag said...

Floyd Norman seems to be so out of touch. His own article contradicts himself on so many levels, it is almost embarrassing. I can understand his agenda, but the reasoning is flawed.

rufus said...

Did Iger take an 18% reduction in salary? I bet he didn't.

In the US, CEO's make 344 times as much as the regular Joe. It's their humongous salaries that are chocking these big corporations.And they have the gall to lay off thousands of people, sending them onto financial doom.

And yet, the studios are finding ways to cut the salaries of these evil animators. Cut the CEO's and executives salaries first!!

And as far as art as entertainment goes...without the goose that lays the golden eggs, what type of economy (ancillary, theme parks, movies) are you proposing as an option? Why do you think China has copycat theme parks with stolen Disney and Dreamworks characters?

rufus

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