On Mon, 21 May 2007 04:20:37 GMT, "Maxprop"
wrote:


"Frank Boettcher" wrote in message
.. .
On Thu, 17 May 2007 00:13:19 GMT, "Maxprop"
wrote:


"Scotty" wrote in message
...
unions are a major contributor to the down fall of this
country.

They certainly contributed significantly to the outsourcing of
manufactured
goods to foreign countries.

Max

Since I may be the only one here who has actually run a large union
organization, negotiated contracts, and sadly, negotiated both the
decision and the effects of a closing contract, I would have to
challenge that statement. The Union in my organization had absolutely
nothing to do with the outsourcing of manufactured goods to foreign
countries, unless you call earning an average of 13.50/hour for
highly productive work, with basic benefits like health care provided
on a cost sharing basis a contributing driver.

UAW members love to quote their "meager" wages of only $22 per hour, plus or
minus. Of course they never volunteer the others aspects of their contract
package that net them somewhere in the $40 to $50 per hour range, like
health care, retirement package, disability income insurance, etc. When a
foreign concern employs workers in the $5 to $8 per hour range, it makes it
really tough for a manufacturer to stick it out with the union workers.


Corporate greed was a driver. The Union and most Unions have no
protection what so ever from outsourcing and they are like a "deer in
the headlights" where it is concerned. And that outsourcing takes
place wether there is a union or not.

It's always "greed," isn't it. Profit is a nasty word, eh? Fact is that no
one, not even you, will work for nothing. Profitability is what business is
all about, and one's shareholders generally want to see earnings on their
investments. If one's labor costs are limiting his profitability, he looks
for cheaper labor, and generally finds it offshore where unions don't exist.

No, profit is what drives the economy. Maybe you don't fully
understand how I define the word "Corporate greed". Go to the "goose
that laid the golden egg" for understanding.

In my case my company was extraordinarily profitable. The U. S.
Operation was extraordinarily profitable. On a proforma basis 12%
return on sales, 34% return on invested capital, great cash flow, 10%
growth per year, all organic, that is all from increased business due
to new products and improved market penetration. And the most
respected product in the industry.

So the corporate whiz kids (ex consultants BTW) determined that they
could do better by consolidating companies and taking it all offshore.
Net result. Company destroyed, stock holders screwed, all those
"greedy" union guys described above out of a job (most in their late
fifties), and the chief perpetrator of debacle eased out at a cool
million bucks a year for life. Those "nasty" union guys get about
$4000 per year when they draw their pensions, and if they haven't
reached 65 and qualify for medicare, they can "buy" their insurance
for $5000 dollars per year per family member. Most have too, because,
ususually at that age someone in the family has some uninsurable
condition.

Your initial post was blanket. I disagree. For every case of Unions
being a cause there are 10 cases like I described above. You just
can't paint them all with the same brush. I'm seeing them all the
time. Union membership is down significantly, not because they think
that management is now "nice", but because they know that they can't
do anything to stop the offshore flow. The "deer in the headlights"
syndrome.

I'm not pro union, would rather manage without one, but I know when
they are getting a bad rap.

Frank


Health care costs was a driver. In my many years of struggle against
cost increase, I could always offset cost of living labor increases
with productivity, impact material costs postively, lower total unit
overhead by consolidation and growth. The only costs I could never
control were health care costs. Double digit percentage increases
every year. No matter what kind of effort I put into changing TPA's,
(we were self insured) negotiating new provider networks and
prescription drug contracts, etc. When I embarked on a way to
"target" potential health risk employees (meaning potential high
dollar heart or cancer cases), not to eliminate them, but to incentify
them into a wellness program, the government stepped in and passed the
latest version of HIPPA, effectivly killing the program.

I won't dispute any of that. It's a problem faced by business and
government. And there are no easy answers. Bear in mind, however, that
third-party carriers (health insurance companies) are, and have been,
recording record profits during the past decade or so. Managed care is
really "managed profits." It's a shame that the bulk of the recent
increases in health insurance costs can be directly attributed to an
industry that in actuality has no relevance in the diagnosis and management
of disease, or wellness.

Certainly there are bad unions and possibly many of the UAW locals
qualify. My experience with the USWA could not be classified as such.
And most locals around the country are more typical of what I
experienced.

No one is foolish enough to believe that all unions are guilty of the greed
that exemplifies the UAW. But that union is a major player and constitutes
much of what is costing jobs in this country. It's a no-brainer to want to
reduce one's labor costs, especially if it can be in the 40% to 50% range,
or more.


In most manufacturing operations, labor makes up about 7-10% of total
cost. Material is about 60% and the rest is manufacturing overhead,
Operations that have paid attention to the world have raised
productivity to that level. In our case the "strategists" went for
the spread between 13.50 plus about 30% benefit load to get that $1.00
fully loaded Chinese labor. No brainer, right? Except real costs
actually went up (rework, air freight for missed schedules, warranty
expense, purchasing overhead, and normal container freight costs) and
the reputation of the product was destroyed. Bottom line, whats left
of the company (and it was sold) is about 20% of its former self.



Max