There was an interesting article in yesterday’s NY Post.
It’s interesting in as much as the Post would easily be considered the most conservative of New York’s newspapers in its editorial outlook. Staunchly conservative, pro-Republican, pro-business - just another part of Rupert Murdock’s enormous media empire that includes other conservative media outlets like Fox.
So then, what are we to make of the following article about changes going on at the nation’s second largest automaker?
I always have adhered to the premise our nation’s political climate is akin to a pendulum swinging between the two poles of the liberal and conservative agenda. When the it appears our nation is moving inexorably towards one extreme, the gravity that is the will of the people exerts itself to pull it back towards its opposite. I think our history bears this theory out as well. Witnessing the last decade and a half as the forces of globalization and a pro management environment I have waited patiently for the people of our nation to sit up and take notice.
The old saw is, “Everybody complains about the weather but, nobody does anything about it.” Everybody complains about their jobs these days, about work and the demands on people’s lives but, nothing in our society is changing. If anything a lot of folks would say it has changed, just for the worse.
My parents and grandparents were of a generation where people looked for a good job and expected to stay in one place for their career or a good portion thereof. Medical benefits were part of the package and the cost of those benefits was shouldered by the employer. Hell, people even had these radical things called pensions! Something that would supplement their income during their ultimate retirement. These days, it’s questionable if there will even be a Social Security system by the time I get to retirement age and even if it is there, it is increasingly doubtful it will be enough to survive on.
So again, what are we to make of it when the city’s most conservative paper runs the following article? Is it the beginning of the pendulum swinging back the other way?
FORD TO WORKER: JOB NONE
-Christopher Byron
...That is the context in which last week’s announcement from Ford should be seen. Ford is in trouble for the same reason General Motors is: Neither company has been able to design and build cars that consumers actually want to buy...
...Yet instead of addressing that core problem, the top managements of both companies have spent years and even decades blaming anyone but themselves - the environmentalists, the Japanese, the Europeans and most of all the unions - for failures that are ultimately management’s alone...
...In January, the company unfurled its so-called “Way Forward” program. Its goal: to trim 30,000 blue-collar workers from Ford’s North American payroll by 2012 through a combination of attrition, firings and a kind of tin parachute buyout program...
...Last week Mulally gave his hearty endorsement to a plan, said to be in the works for months at the company, to outdo even GM and pull forward the cost-cutting goals from 2012 to 2008 instead...
...The tactic to achieve this? A veiled threat from the company to fire every blue-collar worker in the U.S. who didn’t quit first...
...The company said last week that it now plans to cut $5 billion in operating costs from its consolidated worldwide income statement over the next two years by offering go-away buyouts of up to $140,000 per person to all 75,000 unionized workers in the U.S. who are willing to quit the company and leave behind their retiree health plans on their way out the door...
...But they’re missing the big picture, for this is the 21st century, not the 20th, and though Ford’s corporate charter may remain in Delaware, and its headquarters in Dearborn, the heart and soul of this company has now joined those of other companies like it, destined to wander the earth forever, in search of any place to call home where the most workers can be hired for the least.
This is an abridged version of the article, if you want to read it in its entirety, click on it but if you find your having problems just look at the comments for this entry.
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FORD TO WORKER: JOB NONE
-Christopher Byron
September 18, 2006 — WE’LL doubtless still call it the Ford Motor Co., and we’ll still celebrate it on the History Channel and in textbooks as the quintessence of 20th century American ingenuity. But this is no longer the 20th century, no longer the era that Henry Luce proclaimed “The American Century.” We are in a new time, and last week we witnessed an example of its dominant theme of multinational corporatism as the Ford Motor Co., reeling from the prospect of looming losses, began the march to transform itself from an American company into the mere hologram of one.
Anyone who doubts where the locus of true power now lies in world affairs need only reflect on what happened last week, as the president of the United States stood mute before the news that the nation's second-largest automaker had decided, in effect, to declare war on its own unionized workers.
It is tempting to dismiss this sort of thing as not really representative of American business, but rather in the Ford tradition, in which the company’s founder, Henry Ford, kept a gang of thugs on the payroll to beat up union organizers during the 1930s.
But the nation’s revulsion over such tactics has given way to a new cultural consensus in America. In it, the unions have become the bad guys and management has become their victims.
New laws have been passed to undermine and blunt old laws. The National Labor Relations Act of 1935 is still on the books, but the NAFTA trade treaty has given companies a cudgel that hovers over contract talks with labor unions whether management overtly waves it across the table or not: Agree to our giveback demands or we'll move the whole business to Mexico!
That is the context in which last week’s announcement from Ford should be seen. Ford is in trouble for the same reason General Motors is: Neither company has been able to design and build cars that consumers actually want to buy.
Yet instead of addressing that core problem, the top managements of both companies have spent years and even decades blaming anyone but themselves - the environmentalists, the Japanese, the Europeans and most of all the unions - for failures that are ultimately management’s alone.
Now Ford has set out to kick the dog all over again, this time proclaiming that problems of such calamitous scope have erupted so suddenly that the company has no choice but to “accelerate” a cost-cutting plan put in place at the start of the year.
In January, the company unfurled its so-called “Way Forward” program. Its goal: to trim 30,000 blue-collar workers from Ford’s North American payroll by 2012 through a combination of attrition, firings and a kind of tin parachute buyout program.
Yet not even Ford’s top brass seemed to have much faith in the Way Forward. Since January, at least 18 top Ford officers and directors have been net sellers of Ford stock and almost none have been net buyers.
The biggest seller of the bunch: Chairman William Clay Ford Jr., who sold more than 593,000 shares just after the Way Forward program was announced, bagging close to $4.7 million.
Another surprising seller: The company’s executive vice president in charge of implementing the Way Forward program, Anne Stevens, who began selling Ford Motor shares late last winter and continued to be a seller through early last month. Two weeks ago she joined an exodus of top management officials, turning in her resignation.
Meanwhile, Wall Street was registering its own thumb's down vote on the program, which seemed far too slow-paced in light of a more aggressive-looking buyout program announced shortly thereafter by GM, and analysts began marking down Ford’s stock.
This sent Ford’s share price skidding from nearly $9 in January to barely $6 by midsummer while the company’s brass thrashed about looking for what to do next. Two weeks ago came a pretty good clue when William Clay Ford Jr. stepped aside as CEO (he stays on as executive chairman), and was replaced by a turnaround VP from Boeing named Alan Mulally.
Last week Mulally gave his hearty endorsement to a plan, said to be in the works for months at the company, to outdo even GM and pull forward the cost-cutting goals from 2012 to 2008 instead.
The tactic to achieve this? A veiled threat from the company to fire every blue-collar worker in the U.S. who didn’t quit first.
The company said last week that it now plans to cut $5 billion in operating costs from its consolidated worldwide income statement over the next two years by offering go-away buyouts of up to $140,000 per person to all 75,000 unionized workers in the U.S. who are willing to quit the company and leave behind their retiree health plans on their way out the door.
In a tip-of-the-hat gesture toward sharing the pain, the company said it would also shed 14,000 salaried employees, or roughly a third of its white-collar work force in North America, by next March. But 4,000 of the total have already departed as a result of the actions announced last January, so the new cuts on the salaried side are actually a third less than they seem to be.
Yet Wall Street seemed unimpressed. The stock had bounced up some 40 percent from its midsummer trough to over $9, but last week, when the details of Way Forward II were formally unfurled, Ford's shares tumbled 11 percent to close Friday at $8.02.
The main reason for the negative reaction? At its midweek price of $9.48 per share, the stock was already trading as if it were nothing but a money market fund offering a 2 percent yield from its dividend. And the company knocked the support pins out from under that pricing approach by announcing that Way Forward II would add $1.5 billion more to the projected savings of Way Forward I by eliminating the company’s quarterly nickel-a-share dividend, beginning in December.
Over the weekend, a source who knows the Ford family well told me that plenty of William Clay Ford Jr.’s relatives would now like nothing better than to steal upon him in his sleep and stick a hat pin in his eye for what he has done to the stock, the dividend and the legacy of his great grandfather.
But they’re missing the big picture, for this is the 21st century, not the 20th, and though Ford’s corporate charter may remain in Delaware, and its headquarters in Dearborn, the heart and soul of this company has now joined those of other companies like it, destined to wander the earth forever, in search of any place to call home where the most workers can be hired for the least.
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