Ford Execs HAD A Better Idea - Until They Got Caught Green-Handed!
Financial blog columnist Michael Panzner wrote on Feb 20th, 2007: “Coincidentally or not, growing political discord between Democrats and Republicans, emblematic of a darkening social mood, seems to be shadowing the ongoing deterioration in the economy.”
That deterioration is only affecting a certain portion of the population, however - the statistical middle class, the workers of The United States of America.
There are now a record 946 dollar billionaires around the globe, according to the latest Forbes ranking… In 2006 there were only 793 billionaires. The total wealth of these Super-rich grew 35% during the year to $3.5 trillion on the back of rising property prices, commodities and stock markets. We’ll ignore the job cuts, reduced wages, eliminated benefits, outsourcing, and offshoring that also contributed to this largess for the select few.
But not everyone of the Super-Rich found good news in the Forbes rankings: The Walton family didn’t make the top 20 due to “a difficult year” for Wal-Mart, the world’s largest retailer. There might be a very good reason for that drop in sales and profits. Their prime market segment has been losing earning power faster than the Waltons can make it up by buying Chinese products to sell at those “always lower” prices.
The other major Wall enclosing the working class - Wall Street - has noticed this even if most economists choose not to, rising only modestly despite otherwise good economic news after the government reported a jump in wholesale inventories that indicated falling demand,and subprime loans to people with poor credit ratings contributing to sluggishness in the housing market.
But such issues don’t affect the Super-rich much, or for very long. Paris will still party tonight. Nor do these concerns interrupt the sleep of their top-drawer lackeys, the corporate execs, who never fail to find a reason to award themselves a bonus no matter what the state of the economy. But don’t blame them for taking this action.
They are only following the rules
of the Great Game of Business Compensation
when they do so:
“These are the rules of big business. They have superseded the teachings of our parents, and are reducible to a simple maxim: Get a monopoly, let Society work for you, and remember that the best of all business is politics, for a legislative grant, franchise, subsidy or tax exemption is worth more than a Kimberly or Comstock lode since it does not require any labor, either mental or physical.”
- Frederick C. Howe in Confessions of a Monopolist, The Public Publishing Co. (1906).
(Quoted in Wall Street & the Bolshevik Revolution by Antony C. Sutton, Buccaneer Books, June 1993)
Same as it ever was - screw your workers when all else has failed - and be sure that you own the government so that it won’t interfere.
Despite their horrendous performance in 2006, losing well over $10.7 billion (some accounts put it at well over $12 billion), laying off thousands of workers, and closing several manufacturing facilities, Ford will reward their executives with “modest” bonuses.
Naturally, this raised the ire of the United Auto Workers, 396 of whose members just accepted the final buyout offers at Ford’s Woodlawn plant. In all, 38,000 hourly workers - half of Ford’s blue-collar workforce - took buyouts and early retirement packages rather than get laid off with nothing. The outcry over executive bonuses was enough for Ford to later announce that every Ford employee would get a bonus of between $300 to $800 in order to prevent morale from sinking lower still, but with January sales falling short, industry observers question whether Ford will be able to meet that promise:
They’ll say Ford Motor Co., which lost $12.7 billion last year, “can’t afford” to pay close to $100 million in bonuses to every employee in the United States and Canada. Yes, the payouts are modest. Yes, they’re basically advance signing bonuses for union members who will be asked to ratify an austere, concessionary contract this fall. Yes, the UAW’s profit-sharing provisions will remain in effect until the next contract — though there are not gonna be any profits to share, so that detail is mostly moot.
But there is a strategy behind this radical move:
[T]his is all about changing a sick and broken culture before it crumbles under its own weight and kills Ford. It is dollars-and-cents confirmation that when Mulally says “one team, one plan,” he means it and so do Ford’s directors, who approved the plan Thursday morning.
I hope for the Ford workers that it works, for it is certainly a desperation move for the wealthy directors to open up their ossified wallets and let a few moths escape! The Detroit News reported prior to the bonus announcement that only 47 percent of Ford workers have confidence in the company’s long-term success, fewer than 45 percent said they believe Ford’s proposed turnaround plan is working, and only 38 percent believe Ford has “the right products to move the company forward”.
It wouldn’t be fair to ignore the fact that Ford is also laying off management despite the bonus news. The goal is to eliminate another 10,000 white-collar positions toward its target of 14,000, and Ford has already cut 4,000 salaried workers. The cutoff date for white-collar buyouts has passed, which means that any executive cut now lost the bet and leaves busted.
But such people with certain “experience” might find a new job thanks to the troubles of Chrysler. Even if these execs don’t continue to work in the automotive industry, they will still be able to find jobs:
[M]onthly payroll reports showing national aggregate figures are not the ones we should be watching right now. Instead, a true topographic picture of the hot spots and dead zones in the national jobs market was exposed in the Metropolitan Area Employment report that the Bureau of Labor Statistics released on Tuesday.
[T]he lowest that national unemployment ever got at the peak of the Clinton-Dot.com-New Economy boom was 3.9 %, and that was only for the last four months of 2000. [E]ven with lackluster GDP growth this year, employers are in for misery in a dozen major metros when it comes to hiring high-priced help. This ‘war for talent,’ version 2.0, has already been raging in places like the DC area for years, thanks to the Bush defence spending splurge. These are not places like Vegas and Phoenix and all those cities in Florida that had their job markets puffed up by the housing boom, and are now going to see more bodies looking for work because of the bust. Instead, these hot spots are driven by high value-added sectors like finance, tech and advertising.
My favorite micro example of this round two of the war for talent is the online advertising firm, Organic. It currently has about 100 openings that managers are scrambling to fill. That’s up from about 40 last summer. The headcount of the whole firm is only 300!
You can’t build a booming business unless you have the bodies to staff it, and I predict that pricing-power in the job market will shift even more to workers this year in specialty sectors in these cities.
There is no such soft landing for the vast majority of Ford’s departing employees. The latest Spherion Employment Report found that only 8 percent of workers are optimistic about the strength of the economy, down six points since December. Only 37 percent of those surveyed believe that more jobs are available, five points lower since then. It can’t help that February’s job numbers are lower than January’s, indicating a slowing of the employment engine, and resulting in the economic effects cited above for Wall Street’s sluggish performance.
It also doesn’t help that these job numbers indicate the weakest growth in 2 years, and it’s not expected to get any better for hourly workers in 2007, as economists surveyed by Briefing.com project. Said Joel Prakken, chairman of Macroeconomic Advisers:
“Employment is a lagging indicator.
People were expecting employment growth to slow well before now.
I think you’re just finally starting to see it.”
Not everyone wants to see it, nor do some WANT you to see it. Morton Marcus, an economist formerly at the Kelley School of Business at Indiana University, challenges the accuracy of governmental labor reports, a charge that is confirmed by the news that the federal government is altering its data gathering methods in order to show that the economy did so much better than previously reported since 2001, the beginning of the Bush regime’s Rule to Ruin.
The economic revisionism has thus begun, seeking to establish the legacy that George W. Bush greatly desires but didn’t create. So, in typical Bush fashion, wealthy friends of the family are going to step in and manufacture it - by whatever means possible.
Even - especially - through the false means and methods the Bush family is famous for using - Lies, “Gifts“, and Theft.
War.