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The modern business model

Posted:
Sat Feb 20, 2010 1:43 am
by philbymon
Ya know, it really cracks me up when I hear ppl talking about how unions ruined things in this country, especially for the auto industry.
Let's look at the GM model.
In 1964, General Motors was the world's largest employer. Today, WalMart is the world's largest.
Employee costs for GM ran in the 10% range, including retirement & other bennies, while management costs were at 35%, right up until the 80's, when they started assembling "American" cars overseas.
I ran a restaurant as a manager. A 10% employee cost was considered quite good. Management costs were higher company-wide, but nothing near a 35% range, yet I, as manager, got paid much better than the hourly employees.
Today's WalMart employee gets none of the bennies that the GM worker has gotten over the years, & management gets a whole helluva lot of bennies, at the higher management levels, as well as great pay. In fact, a good many of WalMart employees are part-time, with no benefits.
ALL Dollar General employees are part-time, except for management. This allows the maximum return for the work of the employees, while offering them zero in the way of benefits. At DG, even assistant managers are part timers. Thier pay ios only slightly above minimum wage. They can chose to buy insurance through thier emplyer, but there's no guarantee that you'll make enough to cover the cost of that crappy insurance they're offering.
So who is gonna pay when they get sick or injured off the job? They have no insurance.
This is the modern model for the American corporation. Make as much as possible from your work force, while offering the least amount you can get away with. When your employees start talking union, close up shop & move out of state.
In the mid-80's to early 90's, I worked for a vanding machine manufacturer. They moved to South Carolina when the workers began meeting with union reps, where the co could pay ppl a starting wage of less than 2/3 what they could start ppl at up here.
Companies are either doing that, or moving themselves completely out of the country to take advantage of the lowest possible cost.
You may say that this is simply "good business." I say that this is raping Americsn workers, leaving them with no jobs that they can afford a low-to-middle class life style with.
When only the few get all the benefit from the work of the many, it dissolves the middle class.
When GM began manufacturing the Buick Regal in China, the workers there were getting 17 cents an hour. When they began to build cars in Mexico, they paid the workers $70 a week, offered them minimal housing advantages & bussed them to work, thus controlling them in many ways.
In the meantime, the cost of the vehicles did not go down, yet the monetary advantages for management & investors went way way up.
The power of the unions was effectively erased. The life style of the foreign work force was increased a great deal, but there were no advantages to the average American, because we had to cover the cost of lost work, & also had to pay the same or more for the same car that had once been made here in the states by Americans.
How much profit will ever be enough? Is THIS the cost of a global market - the elimination of the middle class?
In the past, the union was the only voice the employee had on his side. Now, there is no one to speak for him. The propaganda of the last 40 years has turned even blue-collar workers against the concept of the union.
Who will protect the ppl's jobs now? Who wil help the worker get fair treatment? According to many ppl I hear in here, the general consensus is that this is "good" for us all. I can't see it that way.
My wife's co reduces bennies each year. Our insurance costs more every yearm yet the coverage is continually reduced. Two years ago, she was due a $10,000 bonus, according to thier policy. Guess what happened? They laid her off 2 weeks before Xmas, & rehired her in mid-January. That way, they didn't have to pay her any bonus at all. There was no legal recourse, of course, so she had to accept thier policy, or choose to look for work elsewhere, although she's been with that co 12 years.
That, my friends, is the treatment the American worker will continue to get in the future, & it will get much worse if we continue to allow it.

Posted:
Sat Feb 20, 2010 1:55 am
by fisherman bob
What we need is a NATIONAL website AND associated television show listing ALL companies and ALL divisions of companies that have relocated overseas and BOYCOTT their products. There has to be HELL TO PAY for abandoning the people whose blood sweat and tears got the companies where they are today. There also HAS TO BE MAJOR REFORMS in our government that make it IMPOSSIBLE for companies to relocate overseas. The country of Japan has historically only allowed a tiny number of American manufactured vehicles sold in Japan. Whatever that number is America should do the same with Japanese manufactured vehicles here. IT'S TIME FOR THE B.S. TO STOP NOW, PRONTO.

Posted:
Sat Feb 20, 2010 2:01 am
by philbymon
Great idea, bob, but you'll play hell getting it on the air, since the airwaves & the gov't who control the airwaves are owned & operated by the corporations & investors who play these games with the American worker.

Posted:
Sat Feb 20, 2010 3:10 am
by Kramerguy
philbymon wrote:Great idea, bob, but you'll play hell getting it on the air, since the airwaves & the gov't who control the airwaves are owned & operated by the corporations & investors who play these games with the American worker.
I was going to make a post bitching about my job, but this thread seems appropriate-
Liek you Philby, I've been in Rest and retail mgmt. I gave many years of blood sweat & tears. I've also had the pleasure of spending many years in a few different corporations "office work" and have now seen the working class from two different, yet similar points of view.
Long story short, here's what happens at EVERY company I've ever worked for:
Start with successful, growing, private owned business-
Then:
10. Employees well paid, happy. Company provides excellent benefits at low cost to employees, also grants annual bonuses based on company performance, and every friday provides hot breakfast, employee incentives such as cruises and vacations for hyper-achievements. Employees have high productivity with little or no supervision. Company leaders are not raking in 1000x pay vs. employees, but do extremely well and live quite a nice lifestyle (in today's case - probably all are pushing the million mark on profits annually.)
9. Company leaders decide to incorporate, go onto stock exchange.
8. Super-sized corporate competitor OR other similar business makes an insanely large bid for the company.
7. "Stock holders" (owners) quickly and greedily take the offer.
6. Corporation moves in silently. Employees find out only after the deal is signed and sealed. Corporation ensures employees nothing will change, job will stay the same, blah, blah, blah.
5. Corporation over several months makes moderate changes, always silently and as passively as possible. The bonus and employee reward programs are always the first to go.
4. The next open enrollment for benefits ALWAYS comes with a sob story about rising medical costs and
extreme increases in employee premiums (company drastically reduces contributions)
3. Higher paid and high level personnel begin to be replaced by corporate insiders and their friends / family that are loyal to them.
2. Corporation decides to move entire company to a new office where the workfloor is wide open, where everyone sees everything, starts encouraging employees to narc on each other for minor infractions, virtually destroying any morale that might be left.
1. WIth morale in the toilet and people getting thrown under the bus daily, the actual product became secondary. Once very productive employees are now spending more time covering their a$ses than doing their actual jobs. The Quality and Services your company was once revered for are now piss poor and your (daughter) company is suffering financially, giving 'corporate' the argument that employees brought this on themselves and begin downsizing.
Thats EXACTLY what's going on (AGAIN!!! argh) at my job. We're rounding the bend from step 2 to step 1. Today was probably the turning point.

Posted:
Sat Feb 20, 2010 3:41 am
by J-HALEY
Philby, I agree with you in principle. But there are other factors involved I don't think you have considered. The bottom line IMO is that certain people in this country think everything should be fair for everyone. But that is not reality IMO the one thing I have told all of my kids when they start bitching about something not being fair is LIFE IS NOT FAIR BUDDY! I don't mean to sound like I am talking down to you just offering another point of view.
That guy that just flew his plane into the I.R.S. building in Austin was a former buisness owner twice over just on a smaller scale than the corps. you are talking about. He used his life savings to try and make it in a buisness that should have been guarantee'd success and it didn't fly. Now you have to ask yourself. Was he just a dillusional musician that wanted to party all night long, or was he someone that genuienly tried and it was not intended to succeed (cards stacked against him?) We will never know the answer to that.
Anyway my point is, it is almost IMO impossible to succeed in buisness here in the U.S. because we have become so politically correct that everything has to be perfect for everyone and NO ONE CAN LOSE! that it has gotten so expensive as a result of this that there are so many Rules & Regulations, Permits Required, Insurence Needed (to get those permits) Unions To Make Sure Everyone Gets Their Fair Share. As a former Buisness owner myself I must admit that I am sympathetic to the corps because I have lived it Bro.
Untill you live life in the REAL world and understand that the purse strings only go so deep and that the money doesn't last forever. It is real easy as an hourly employee to justify the fact that THE MAN is making all that money and not sharing it with ME and to assume that you have the right to just show up for work breath air and you should be compensated for that? Wake up people, because if you don't, believe me when I tell you, you will be woken up!
This is the smallest of the small scales. On the largest scale this is exactly what the National Debt, the Deficit, and the like are going to experience. Where in the HELL do you people think the money is going to come from? Out of Thin AIR?
I hope and Pray that there are not more everyday people that are going to become frustrated and believe that the only recoarse is violence and to fly their plane into a building but during a revolution. I do fear it is a possibilty.

Posted:
Sat Feb 20, 2010 4:12 am
by J-HALEY
Kramerguy, LOL thats what we call cutting the fat! Ya see Texas is a right to work state it has been that way here for 25 years.


Posted:
Sat Feb 20, 2010 5:07 am
by Kramerguy
J-HALEY wrote:Kramerguy, LOL thats what we call cutting the fat! Ya see Texas is a right to work state it has been that way here for 25 years. 
PA is too, and it sucks.
I know life aint fair, but unions existed for good reason. Forget unions, the lack of ANY organized labor only spells dark times for people like us.

Posted:
Sat Feb 20, 2010 1:40 pm
by ANGELSSHOTGUN
KRAMER,I thought you were NOT going to get involved in these disscusions anymore because they were such a"BUZZ KILL"!!!!!
California govt workers under UNION cotracts pay an average of $105000 over the course of their employment. They are walking away with $3,000,000 of entitlements. No wonder CA is bankrupt. No wonder in the end you and I will have to bail them out.
Same with SS, and Medicare, And every other big govt program.
G.M. now govt motors,,, was crushed under the union loads of $75 per hour ,and another $100 per hour in benefits and retirement,,For the guy who had no real skills other than being able to put a screw in a door.
Even worse are the unions that dont give a flying bat fart about the workers they are supposed to REPRESENT.
Even worse is I don't feel sorry for any GM workers You pushed to long and to hard for UNION RIGHTS,,, NOW your jobs are in jeopardy.
Now KRAMER , You and I are going to have to pay for all those unemployment benefits. YOU JUST DON'T get it ...Were is this money going to come from?
Govt workers that have UNIONS, KUDOS to you . Average American households are bringing in $50,000, average Govt workers are pulling in $70,000.
I just don't understand ,Kramer , were you keep saying that it is OK for these people ,Govt and all these union protected workers to,,,,
KEEP STEALING FROM YOU!!!!

Posted:
Sat Feb 20, 2010 2:34 pm
by ANGELSSHOTGUN
KRAMER, Lets go back in history, and review the teachings of carl marx.they split in three philosophies.
1. communism, It led to mass murderers ,stallin and mao.Failed.
2.socialism,[very european], greece,spain ,portugal ,italy, and soon to follow,more.Will fail. NOTHING IS FREE.
3.unionism[America],very strong way to deal with unfair corps at the turn of the century.I.E. andrew carnegie. Is putting business out of business
This is a FREE MARKET ECONOMY. let me explain...Untill you are willing and able to put up your OWN money,CAPITAL, dont complain because you don' get the "lions share"
If you don't like the situation or JOB,,MOVE ON. Put up your money and start your own business.
I wish Craig was around to explain this better. But I will not tell youSTFU.

Posted:
Sat Feb 20, 2010 2:53 pm
by ANGELSSHOTGUN
The good thing about unions today is that
they can form a collective to lower and help with costs for business ,IE healthcare cost.
The bad thing about unions today is when they become unrestricted free agents, only concerned with their own bottom line, just like the evil corporations.
I must have it all wrong,,,,making money and being successfull are no longer AMERICAN ideals.

Posted:
Sat Feb 20, 2010 2:55 pm
by Kramerguy
glen, you are the reason I don't like discussing these things, you cite every failure in civilization, but none of the successes, just to argue a point. Your logic is flawed, and you can't provide proof to support any of it.
So, my response is simple:
NO absolute "ISM" ever worked. It's not that easy. Can you name ONE capitalist/democracy that EVER succeeded in the long run? Ours is the only one, going on 200+ years, and look at how many times we've had to "fix" it, because it is so easily manipulated. The stock market, giant corporations, etc.. We've watched the scenario unfold how many times now? And how many times did it just work itself out? NONE>
Capitalism is a failed concept. Even on paper, it fails.
Capitalism is based on growth, and MUST grow to succeed. We are working with limited resources. These resources CAN replenish themselves over time, but consumption needs to be limited. Capitalism allows corporations.people.governments to consume at will. We already, as a people, have consumption needs far beyond what the planet can (eventually) provide. And we're not even addressing the issue, as a people.
BOth Socialism and communism, with all their faults, can at least say that they've stood the test of time. China is going on 4000 years. Point and cry all you want, but they've survived. Can rome say the same? What brought that down, hmm? Corruption. Something capitalism and republics BREED. yep. We chose the ONLY model in human history that's guaranteed to fail, but hey, at least a lot of people will get really rich and move elsewhere when it all falls down, right?
Not that I want PURE socialism.. which is what you can't seem to get through your "selective hearing".. Like I said, PURE anything is bad.
You NEVER answered my questions about schools, law enforcement, highways, fire dept, libraries... If you REJECT socialist means, then you shouldn't EVER use any of those things, right?
We've teetered as a country on greatness, only for that greatness to be ruined for nothing more than obscene amounts of $$$$$$. Capitalism at it's finest.

Posted:
Sat Feb 20, 2010 3:04 pm
by gbheil
I worked for a Union. A division of Oil Chemical and Atomic Workers.
When I got laid off with about a million others world wide. I had been with the company for 10 years. The gang (manual labor) I worked with was full of guys whom had masters degrees, bachelors degrees, one doctorate, and few guys like myself with an associates in this that or the other thing . We were paid pretty good, but we lost ground every year on our negotiated raise percentage. The only means of promotion was seniority. Did not matter how hard you worked or how much education you had only how long you had been there. Zero incentive to be productive. When the world wide layoff took place the Union heads all got huge pay offs. One of the women got promoted into management (she had no college education) the rest of us were told "sorry charlie" we only want employees that smell like tuna.
As far as GM exporting assembly. I would too before I paid $100 K + to unskilled workers. Not that I blame the individuals for wanting to improve there lot in life. But no one can sustain a business paying assembly workers $100 K to stand in one spot and bolt in seats all day .

Posted:
Sat Feb 20, 2010 4:00 pm
by philbymon
Yet in spite of the high cost of some of those workers, the total employee cost was still 10%, while mgmt raked in 35%.
What was truly needed was a cap on the employable work time. I.e., you cannot work more than 30 years with the co. That, unfortunately wasn't & still isn't what's happening. Those lifers continue to get raises yearly. They get 1st pick of thier preferred shift. They get preferencial treatment all over the place simply due to thier longevity.
Yeah, unions aren't, & have never been, perfect in any way. Still, without them, employees are screwed on a daily basis in co after co.
Kramer is right about how things work, too. Once the co gets its spot on Wall St, the employee gets flooked by corp greed, since the investors have zero interest in the lives of the workers.
Those workers you cite, Glen, who are making in excess of $50 per hour, make up less than 10% of the work force. The total employee cost was still 10%, while the mgmt cost was still 35%. Your gripe is moot in the big picture.
I've been living in the "real world," JH. I've seen these same things happening time & time again, in co after co.
Mine is not a feeling of entitlement, it's a growing concern for the future of my son & my grandson. This trend seems to be getting worse.
Co's make employees offers to get them to work. They get bought out, & the new owners of that co have no interest in fulfilling the promise of the co. They consider it a brand new entity, & if you don't like it, go out & get a new job.
Problem for the worker is, he has seniority where he's at. He's invested a large portion of his life to serve this co. He's been a loyal & productive part of the corp machine. He cannot simply move on & find anything out there of equal value, since he'll be starting all over again. So, he stays, & watches as his pay gets reduced every year, while his cost of living continually increases. The corp "makes" more money than ever before, whether they actually produce more or not, simply by reducing the overall cost of that loyal employee.
My wife's co has been bought out 6 times in 12 years. Every time, she has had her duties increased, while her pay gets reduced. (I include benefit packages in with pay, here.) She has been laid off twice, due to her dept being erased, supposedly. Both times, the co got away with keeping the bonuses she was promised when she took the position.
This co also has outsourced much of its service calls to India. The customers repeatedly complain that it takes them way too long to have thier problems addressed. The foreign operators have a set script that they cannot deviate from. Often, they cannot even speak Enflish well enough for the caller to understand the script they're reciting, let alone have them answer any of the questions the customer may have. It often takes many days for ythe customer to reach anyone who can actually explain things to them, or handle the issues they contend with.
There are three major co's that do what my wife's co does. None of them are better than the other. There is no competition in this field. The co does whatever the hell it wants, because they know the customer wil have the same problems anywhere else they choose to go.
They sell out, & the new co cuts even more bennies & even employees, & adds to the workloads of those who are left, to show a profit to the investors.
And the employees? Who gives a damn about them. They're lucky to be working at all, right?

Posted:
Sat Feb 20, 2010 4:11 pm
by ANGELSSHOTGUN
Funny thing kramer, money , you don't have any.
I thought Craig explained it very well when you mention ,police ,fire departments, schools, libraries. Simple concepts called scale of economy......
If you have to many water districts in one small area ,, the cost would be overwelming.... This is not socialism , this is common capitalism sense.
I thought you didn't want to get involved in these discussions anymore.
All you do is tear down the truth to fit your own means. You are starting to sound like a very good presidential candidate.
I don't know what your problems are but you better brace your self for the next round of tax hikes that are aimed at directly at YOU.
You will benefit by 0 ,nothing , nada,zippo!
Untill you get the balls to stand up for yourself, I will never be able to keep people such as yourself, from putting their hand on a hot stove,,,,,and wondering why they got burned.
Notice I will recognize your civility,,,, you forgot to tell me to STFU!
What I write here is the same thing that I tell people In their face.
I do it all the time any where and every where. The Dog BITES and To keep it simple I wish you were here right now. Sending plane tickets see you soon!

Posted:
Sat Feb 20, 2010 4:18 pm
by ANGELSSHOTGUN
Like I said,,, untill you put up your own money to start your own company and face all the problems a business owner faces,,,,,,, you should be glad to have a job.
Same as a copyright,,, that business represents hard work to create.
I'l say it again,,,,PUT UP YOUR OWN MONEY.
PUT UP YOUR OWN MONEY!!!!!!!!!!!!!!! START YOUR OWN JOB!!!!!!!!
then who you gonna complain to?