Sunday, July 03, 2011

Profit Margins, Layoffs, and the Whole Damn Thing ...

And then there's this from today's Los Angeles Times:

... Supplying dealer service departments throughout Southern California, Arizona and Nevada, [BMW's parts distribution warehouse in Ontario] received gold medals from BMW for its efficiency and employed several of the top-ranked workers in the country. In the roughly 40 years its workers had been represented by the Teamsters union, there had never been a labor stoppage. ...

As of Aug. 31, the plant [will] be outsourced to an unidentified third-party logistics company and all but three of its 71 employees laid off. ...

So it's "Please lock the door behind you, and drive safely" to the three-score and ten employees of BMW out there in Ontario, and what, after all, is new? If you don't have a job, that's your character deficiency. Because it's the reality of 21st century American life.

And of course, the counter to the sad tale above, heard often today, is "Well, what you gonna do? We're broke." And it's certainly true that state and local governments are running deficits, and that the Federal Government is running deficits. But Big Business?

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth. ...

(When you think about it, it makes complete sense that Bob Iger, Rupert Murdoch and the rest of the corporate chieftans pull down multi-million dollar salaries. Their side is capturing almost ninety percent of income growth, so why the hell not?)

Then there's the nice little company that doesn't make cars, but airplanes, and which is behaving in a not totally dissimilar way to BMW. You might have read about it:

Lawyers for Boeing Co. and the National Labor Relations Board clashed Tuesday at a hearing on the board's allegations that the aircraft maker illegally shifted work from union plants in Washington state to a new non-union factory in South Carolina. ...

Clearly, the nasty Federal government is beating up on Boeing. But only with one hand. The other hand is being pretty nice:

In the 10 years ending in 2010, Boeing had $29 billion in profits, and paid minus-$948 million in federal taxes. ... If you include the past 11 years, Boeing's effective tax rate was positive, but only barely.

In other words, for the decade when the government launched two wars and ran up historic red ink, one of our largest companies — one that's a major beneficiary of military spending — contributed essentially zero to the ledger. ...

When I was a starry-eyed lad, growing up in the age of Eisenhower and Kennedy, big companies paid actual taxes and gazillionaires paid a a higher percentage of income, yet remained gazillionaires. But it was a simpler time then. Unions represented 40% of America's work-force. Social Security was considered sacrosanct. Moms worked at home instead of pulling in a second income to make ends meet.

Today we live in the Second Gilded Age, (except without the high growth rates). So it's only natural that companies pay nothing and lobby congress -- which admittedly, they have bought and purchased lock, stock and barrel -- for tax subsidies.

And if BMW workers get the heave ho, that's just the way it goes. Everybody's tax burdens are crushing (except not really.) And our Left-Wing, Socialist government is overreaching and imperious in its misguided quest to protect undeserving employees (except not very much.)

So it's only natural that those employees work uncompensated overtime while worrying about impending layoffs and their work getting outsourced. This is America, goddamnit!

20 comments:

Anonymous said...

Great post. Corporate Communism runs unabated in Amerikka, thanks to the culture of selfish greed and the "ME ME ME" legacy of the reagun generation. They've brought our country to the brink of ruination, right where they want it.

Steve Hulett said...

A few days ago I had an interesting talk with a middle-aged man who works at the Chevron station near my house.

He works the register in the booth. He told me he's a life-long Republican, but that he's a little worried about the entitlement cuts now proposed in Congress. "Maybe they're taking the austerity thing too far."

I smiled and replied: "I think in the next election, you're going to have to decide whether you're going to stick to your principles and starve to death after you reach retirement age, or hold your nose and vote for the other team. It's really going to come down to that."

After I said this, he didn't argue. He just looked thoughtful.

Anonymous said...

It's always amazed me how the GOP has been able to convince so many in the middle and lower class to vote against their own best interests.

Anonymous said...

I don't consider myself a Republican or a Democrat. While I do believe in capitalism, in my opinion, what he have now isn't true capitalism for everyone. It's some kind of perverted form of capitalism. The kind that's only available for the elite few. And they stack the deck against the average guy to join the elite ranks.

I'm not saying that we should make the rich give their money to the poor either. But something's wrong when people work hard in a career (not dead end skill-less jobs) and can't get anywhere or very far. Sure you could start your own business. Hopefully the big conglomerate who you're competing against won't crush you before you get off the ground.

It also amazes me that people complain about unions costing the companies so much money, yet they never question (or just accept) that the CEO earned his $50 million bonus. A skilled worker/artist who worked at a company for 10-20 years is less valuable that the executive that just got hired 2 years ago? Is that executive really worth 1000 times than a skilled worker? Maybe she/he is only really 200 times more valuable than everyone else and the remaining money can be used keep people employed?

Ah, what the heck do I know? I'm not an executive.

Anonymous said...

It should tick off dems that the prez gives special "tax exemptions" to his friends like GE that didn't pay any taxes on billions in revenue. You need to be chummy with whoever is in the white house during your tax year.

Anonymous said...

You mentioned, "..aircraft maker illegally shifted work from union plants in Washington state to a new non-union factory"

Can the Guild do anything about Animation Studios that outsource their work to Non-union Studios? Seems like they all do it. Sony, Dreamworks, Disney etc... Is R&H Union? Their Indian credits are getting longer and longer.

If not....why?

rufus said...

CEO's are NOT gods!!

Yet, many seem convinced they are, and treat them as such.

and I probably should include 'executives' on that statement...

Anonymous said...

If not....why?

The only thing the union could do would be a work stoppage (strike). But I don't sense there is any will on the part of the membership for that.

Anonymous said...

Check your history. We did strike when TV studios started shipping a lot of the Ink and Paint overseas...all it did was put everyone out of work for months and cause the shift overseas to occur sooner...not to mention now we have a No Striike clause (while under contract) to deal with

Anonymous said...

Did you not see the second sentence in my post?

Anonymous said...

Did you not see my last sentence? Will or not the union CAN'T strike as long as there's a contact.

Steve Hulett said...

Can the Guild do anything about Animation Studios that outsource their work to Non-union Studios? Seems like they all do it. Sony, Dreamworks, Disney etc... Is R&H Union? Their Indian credits are getting longer and longer.

We struck in '79 and '82 over runaway production. (We're about the only union that has.) We won the first and lost the second.

If not....why?

Hard to do because

A) We can't strike during a contract.

B) At the end of a contract, we need to get permission from the International. They gave permission thirty years, ago, but have indicated, the last time I checked, that they wouldn't now.

Always possible, however. Particularly if the membership voted for it. (I'm not sure they would, but I've been wrong before.)

Anonymous said...

"Can the Guild do anything about Animation Studios that outsource their work to Non-union Studios?

If not....why?"

Because the Union is made up of MEMBERS...and if the response to something as innocuous as the WAGE survey can excite such a PHENOMENAL response (cough...cough...), imagine why we're in this spot now!

Anonymous said...

I'm always surprised how American's refuse to acknowledge that the rich run their world, the entire world, that they always have and always will. It's how it works, with a few aberrations where the middle got a bit extra for a spell. Why we don't openly despise them is an entirely other matter, something probably having to do with this retarded free market idea that we all will somehow be rich one day if we believe in voting and pixie dust. Capital dashes across the globe at lightspeed beyond the reach of any law that has been written or could ever be written. You are living in a fairy tale if you believe there will be a middle class in this century again. We are all serfs and nothing will change that. Sorry.

That retarded debt number they keep showing us, the one they use to cram austerity down our throats - that's just a reminder that the rich are indeed still winning and will never lose, and there is absolutely nothing you can do about it. And the really hilarious part is that they get even richer when you decide you have to finally pay it off. Usury's nothing new. Happy 4th, Founding Fathers. The plantations are all still paying off well.

Anonymous said...

I like that the first poster not only spelled "Reagan" wrong, but they are oblivious to the fact that the greatest era of deregulation in this country(the one that consolidated media companies, cable providers, insurance, and mortgage outfits, was all done with a stroke of the pen from one William Jefferson Clinton.

Now, this would have happened under the the eyes of a republican president as well.

The point is that no party is going to save you and no party is going to damn you. What has created this situation is special interests and lobbying groups. They have bought and sold our democratic process.
The true mark of an idiot is one who invests in either party exclusively.

Anonymous said...

Yes, and millions of stupid fat Americans incapable of anything besides jingoist flag waving and taking extended vacations in Escalades had just a little bit to do with it, also. Colossal morons in voting booths won't change anything - ever.

Anonymous said...

Too many of my co-workers keep missing elections because of heavy work schedules.

I'd like to encourage every Californian reading this thread to apply for permanent Vote-By-Mail status. You will never miss exercising your right to vote in an election again, no matter what.

Anonymous said...

Yes, but if you do happen to decide to vote for the usual suspects, please God stay away from the initiatives and referendums. Direct democracy in this state is a nightmare. As opposed to voting for an actual person, voting for these good intentions actually does affect Sacramento and 9 times out of 10 has unintended consequences too numerous to keep track of, leaving that idiot you voted for impotent on arrival. Initiatives are democratic grenades that are misunderstood, misused, abused, and have created a non-governable state. We The People have truly screwed ourselves with direct democracy. And I find it hilarious watching people get all up in arms about how the big bad government is screwing them and making them victims when they themselves are holding the gun to their own head and pulling the trigger - repeatedly. Hilarious. Friggin' hilarious.

Anonymous said...

"A) We can't strike during a contract."

Then the Guild has no power whatsoever. Benefits and Medical, yes... But Aren't we *always* under contract with the studios?
Since you offer no threat to the studios, they see no power, and will continue to do whatever the hell they want. That includes sending more and more work overseas to non-Union shops.


"We struck in '79 and '82 over runaway production. (We're about the only union that has.) We won the first and lost the second."

That was 29 years ago. A lot of the current Guild members weren't even born yet.

Time to re-think current conditions.

Anonymous said...

"A) We can't strike during a contract."

Then the Guild has no power whatsoever. Benefits and Medical, yes... But Aren't we *always* under contract with the studios?


You don't understand how unions work. A no-strike/no-lock-out clause is standard in all union contracts. That includes the WGA, which strikes often, and the NFL, which has currently locked out their players.

Agreeing to a contract means you agree to play by the rules during that contract cycle. When the contract is about to expire, a new one is renegotiated. If the negotiations don't go well, the old contract expires, and the parties are free to either strike (the labor side) or lock the workers out (the management side). But that's like invoking the nuclear option, and it rarely works without massive damage to both sides. It's easy to be a hothead and advocate for striking, but if the majority of the membership isn't eager to strike, then it's counterproductive rhetoric.

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