Corporate Double Speak and Unions

Stephen Luft

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From the Dow Jones Newswire:

Union Workers Strike At Indiana Rockwell Automation Plant

COLUMBUS, Ind. (AP)--Union workers picketed Rockwell Automation (ROK) as negotiations continued on a new labor contract.

The old contract between the company and International Machinists Union Local 1270, which represents 141 workers at the plant, expired early Monday. Some union members on Monday sat in lawn chairs holding signs while others carrying signs walked and urged drivers passing by to honk in support.

Union members voted 90-33 on Sunday to reject Rockwell's contract offer and approved a strike by an 89-30 margin, said Chris Jordan, the union local's president.

Insurance costs were the main sticking point, Jordan said. Rockwell asked union members to pay 15% more in insurance each year for five years, and offered a 3% annual raise.

The company is "disappointed" that a new agreement wasn't reached, said Michele Cauley, business communications manager for Rockwell's Dodge and Reliance Electric divisions in Greenville, S.C.

She said management and salaried employees were at work Monday but that she could not comment on whether any production was taking place at the plant in the city about 40 miles south of Indianapolis.

Rockwell's Columbus plant employs 195 people and produces power transmission equipment for industrial applications, including bearings and gearing equipment for Dodge.

(END) Dow Jones Newswires 08-08-060144ET Copyright (c) 2006 Dow Jones & Company, Inc.

To summarize, Rockwell's Power Systems Manufacturing Employees, have decided by a vote of 89 to 30 to approve a strike due to their rejection of a new contract that would have increased their pay at an annual rate of 3% over the next five years. The point of contention dealt with health care costs, whereby Rockwell asked the union to pay an additional 15% each year over the next five years.

Financial Information - Link

The Power Systems divison for the third quarter generated $262 million and an operating profit of $42 million. Annualized, they are probably near $1 billion in sales and $140 - 200 million in operating profits.

When asked about their success of the third quarter:

The increase in segment operating earnings was attributable to higher volume, productivity improvements, and net price increases, partially offset by inflation.

Hmmm...They sell more at a higher price and it costs less to manufacturer. Three positives working in their favor. Every company strives for this scenario, but not all attain it.

Without actual numbers regarding to pay and health care costs, it is difficult to analyze the impact to the workers.

Public companies tend to promote their numbers to Wall Street...thus attempting to increase their share price, while crying poverty to the workers saying they can't afford raises. I hear it every year from my wife who works at Citigroup. They earn on average $20 billion and the average pay raise is 1-2%.

Health insurance is what I would call a spinning air plane. Once it starts spinning, it is near impossible to regain control again. Hence rising insurance costs. This past year, our premiums only increased 9.4% and we are no where near the group size of Rockwell.

As a union, you would have to believe that their pay scale is higher than the average non union factory, so one would have to believe that they are more than fairly compenstated for their hire.

You would think that with Rockwell's current scenario of improved productivity, they would reward the people who generated it.
 
Stephen,

Interesting article. Here are some of my random thoughts:

1) When Rockwell's business goes in the dumper, will these workers be eager to make consessions and take pay cuts?

2) If the bean counters run the business world (which they do), how can any company be directed into "long term growth" when short term profit is all that matters.

3) There is no loyalty in business today. If Rockwell loses good, experienced workers, there will be some way to replace them (at least in the cold heart of corporate management). This replacement will be at a (perceived) lower cost, which will make the bean counters even happier...
 
I think this its a larger picture then you are showing and there is more from both sides that can be debated on this forum.

But what the hell….if you think a company has profits that are to big…then buy stock in that company, you will soon find out that there profits are not that big after all.

Just as in the big oil companies making record profits and stealing from us pathetic consumers…well invest in the stock to off-set your losses (gas prices on the rise) or don’t buy there goods (walk, buy a electric car)

But if we buy a electric car then we will b-i-t-c-h about the electricity prices, its human nature just to b-i-t-c-h, I say let the union and the companies fight it out

I have been on both sides it makes for a good fight.
 
Stephen Luft said:
Without actual numbers regarding to pay and health care costs, it is difficult to analyze the impact to the workers.

True. It is difficult, if not impossible to analyze from the outside. Which, in an ideal world, would make any outside judgement simply wrong.

Public companies tend to promote their numbers to Wall Street...thus attempting to increase their share price, while crying poverty to the workers saying they can't afford raises. I hear it every year from my wife who works at Citigroup. They earn on average $20 billion and the average pay raise is 1-2%.
Again, so? Do you know the cost of doing business for CitiGroup? The cost of new equipment? Supplies? Marketing? Defaults? Training? New Employee Salary? Commission? Just one more place that making a judgement, without the facts, is just an excercise in hypotheticals.

Health insurance is what I would call a spinning air plane. Once it starts spinning, it is near impossible to regain control again. Hence rising insurance costs. This past year, our premiums only increased 9.4% and we are no where near the group size of Rockwell.
Agree. In the USA, the Health Insurance Industry is not only completely profit driven, but driven by the profits that need to go to the countless lawyers, regulators, politicians, and fraudulent claiments. Health Insurance in the US is just a pitiful excuse for an honest health care system.

As a union, you would have to believe that their pay scale is higher than the average non union factory, so one would have to believe that they are more than fairly compenstated for their hire.
Perhaps higher than the 'Average' non-union factory, or perhaps not. Companies that employ profit sharing, or those that actually higher and promote employees based on merit and talent often have better pay than a union job. Without unions, talent rises to the top and shines. With unions, the scum generally floats to the top and poisons all below.

You would think that with Rockwell's current scenario of improved productivity, they would reward the people who generated it.
Again, who generated the improved productivity? The union? Doubt it. More than likely, it was teams of peoples who look at workflow and scheduling; In essence, middle-management. I really doubt that Joe Schmoe on the floor developed, tested, and implemented any kind of efficiency improvement.

IMHO, only.
 
Having grown up in Columbus In. I have seen strikes at several major companies in our area and I cannot recount one instance where anything positive came about.

In the mid 80's while still in high school Stadler Meat Packing went on a very long strike. It ended with one supervisor killed and two guys spending life in prison. I do not recall if the union actually got the workers more money or better benefits but shortly after things where settled the company was sold and most of the processes moved to other locations.

Mid 80's Golden Castings, a company I would later work for, was on strike for 8 weeks. Again nothing positive from this. I had a friend who actually lost his car, house, and family as his wife left him for spending all his time on the picket line instead of finding some kind of work to help them out.

In late 89 Arvin Exhaust went on stike for 8 months. They were all eventually replaced or offered a job at a much lower wage. I had a few friends who lost everthing buy standing at the gate holding a sign. At the time I was an auto mechanic working at a shop just a mile away from the Arvin plant, I spent many evenings repairing tires of the replacement workers.

1996 Golden Castings on strike again. I had been employed there 4 years at the time. We were out 3 weeks, accepted a contract with less money and lost the signing bonus originally offered. I worked there for another 3 years and figure I never recouped the money lost in those 3 weeks with the 15 cent raise we ended up with. Seeing this coming I did work a job at McDonalds for a few weeks (I had worked there for a year or so before going to Golden Castings). With that plus the strike pay for doing my 2 hours a day on picket line I was ok, however several spent all their time at the picket line and ended up further in the hole.

This weeks strike at Rockwell includes my wifes Stepfather who has worked there 24 years. I cannot comment on this as I havent spoken to him about it. They do make a pretty decent living but im not sure about benefits and such. I just hope they work it out soon as these things affect so many people, not just those walking the picket lines.

Bob
 
I also worked at a union plant briefly. The one thing I do know for sure, workers don't just go on strike on a whim. They have union reps that advise them on what to do. If a union rep says you should strike, that still doesn't mean that the group will. 3 times over one negotiation we voted down contracts, and voted to strike. When it got close to crunch time though, the vote to strike leveled off. People on both sides of the negotiation talk a big game early, and push and shove to get the best position. Then they give and take where they can to agree. Obviously, to vote in those kinds of numbers 89-33 to strike, and follow through with it, there is a reason for it. Most workers know exactly how their company is doing, both long and short term, as does their union rep. All these things come into play, and if the union comes out behind, my take is that had they not went on strike, they would be further behind later on down the line in some way.
 
In response to the following:

Again, so? Do you know the cost of doing business for CitiGroup? The cost of new equipment? Supplies? Marketing? Defaults? Training? New Employee Salary? Commission? Just one more place that making a judgement, without the facts, is just an excercise in hypotheticals.

When you gross $120 billion and net $20 billion from continuing operations (after everything, including fines) how everything else is handled is somewhat irrelevant. Needless to say, when you have to buy your wife's office supplies because they won't...something is wrong.

Note - I don't know if this post from Ken Roach is showing on others accounts? I received email notification of the response, but it isn't showing on the thread...anyways...

The Machinist's union is the most strike-happy union in the world, and in my opinion they are strangling significant parts of the American economy exactly when it will hurt the most.

They struck the Rockwell Automation plant the day their contract expired. They also did it just two weeks after Rockwell announced plans to sell that division, so they know that they have extra leverage because labor strife looks bad to buyers.

You said that your health insurance rates went up 9.4%. If Rockwell was offering 15% increases in their negotiation, and the union wanted zero, what do you think is a valid compromise ? If they split the difference, they'd be doing better than you are.

This is a case of a Union that does not hesitate to strike when they have the most leverage. You should not use it as an opportunity to take cheap shots at your competition.

I was not taking a cheap shot at anyone, but merely sharing a situtation reported by the news wires, that some on this site might have an interest in the outcome in that it could possible affect them.

What is a post without some commentary. I don't seem to recall specifically taking a position, but offering observation regarding both sides.

Again, who generated the improved productivity? The union? Doubt it. More than likely, it was teams of peoples who look at workflow and scheduling; In essence, middle-management. I really doubt that Joe Schmoe on the floor developed, tested, and implemented any kind of efficiency improvement.

I personally, would like to believe that the improved productivity was a group effort, and therefore should be rewarded accordingly.
 
Originally posted by Stephen Luft:

I personally, would like to believe that the improved productivity was a group effort, and therefore should be rewarded accordingly.

How very socialist of you. Contrary to popular belief, there are greaters among equals. Just ask Fidel Castro.

Don't confuse effort with innovation. There are alot of people in this country woring very hard in an effort that will lose billions of dollars, through no fault of their own. Does that mean they should all be fired? Of course not. It simply means they may be in a situation where their efficiency is compromised and they may not be able to do anything about it.

Conversely, if the efficiency of this group is substantially increased by some process innovation from middle or upper management, should the general employees be rewarded for that? Not necessarily. They are simply a product of their environment and are performing to the level they are allowed to perform to. To a large degree that is all you can expect from the workforce at large.

As Jimmie_Ohio stated earlier, these same people won't be making a beeline to the front office to hand in their paycheck if Rockwell loses $42 million. Why should Rockwell (or anyone else for that matter) be in such a hurry to hand out their profits to the general workforce?

I have always believed that if you want to make all the money you are due, work for yourself. If you don't have the sack to take the chance on failure and the economic result of that failure (like me; sackless), then you better be willing to take what those that have the courage will give you. I'm not saying that you shouldn't look for the best deal. I am saying you can't automatically expect to reap the rewards of those who are at risk.

Keith
 
There are a lot of things "on the news wires" that don't allow you to take potshots at your competition under the guise of worker's solidarity.

Re-posting a comment that I deleted is even cheaper.

This is the last time you will see me posting to any thread you originate.
 
This not a Communistic state. Neither is it totalitarian. it is Capitalistic. The profits of a company belong to the owners. In the case of a corporation that is the stockholders. If the management, in an effort to preserve employee relations and retention decide to distribute part of that as wage and benefit increases, so be it.

In the same vein, the workers (who may possibly also be shareholders), are free to decide if they wish to continue to work for a company. The employees may note company profits in a bargaining point but, unless they are shareholders, they don't have a RIGHT to those profits.

Reposting Ken's deleted post is not a correct thing to do. Who hasn't revised a post even to the extent of deleting it on second view?
 
I was not going to reply, personally I think this thread needs to be removed, but I have to say a few things.

Many here work with PLCs and other automation equipment on a daily basis, they can not be concerned with the machinations and operation of any business whose components they use.

On this site AB information is sought more than others because it is used as much, if not more, than many others. Overall, there are more options for training with AB products PLUS, on this site, we have several AB or AB distributor reps that provide invaluable information.

What happens almost on a daily basis on this site, a quesion gets asked and the thread becomes an AB bash contest seeing who can say the worst. You realize that every time you bash that..NOTE..American company, you bash the employees; plus create a dimunitive attitude towards the company.

The sad part is many of the statements are just opinions, not information that offers any actual truth or facts. The truth is you can say what you want but what does it do for you? There is an old adage, if you can not say something good, do not say anything at all. I violate this alot though.

As for Stephen creating this post, I too thought it was inappropriate. As Ken mentioned you are a competitor; which means the less stated about or too the competition the better.

As for the compensation issues that is between the employer and employees.

A question Stephen, since I believe you are Entertron, what did you "net" last year and how much did you share with your employees?

As for comments about pricing, what difference does it make? If you do not like the pricing or it exceeds your budget then you use something else.

You do not buy a VW to pull a 53 foot semi trailer, cost is relevant to the application, budget, and company requirements. The rest is just personal preference; which has no relevancy.
 
I have always believed that if you want to make all the money you are due, work for yourself. If you don't have the sack to take the chance on failure and the economic result of that failure (like me; sackless), then you better be willing to take what those that have the courage will give you. I'm not saying that you shouldn't look for the best deal. I am saying you can't automatically expect to reap the rewards of those who are at risk.
Or:
If you do not want to work for yourself then work in an environment where you can negotiate your own wage/bennefit package based on your merits not the merits of the collective.
 
Steve, I don't understand the point of the thread.

ROK made money. Good for them! I can buy stock if I want to. It looks like a good deal on a dip.

I compete against the 1756-M02AEs and many of the other Rockwell products. Competition is good. Notice I helped on a thread that used a M02AE on a flying shear application. So what? The customer had already bought the controller so it wasn't going to cost me a sale.
 
Keith,

I have just experienced a first...being called a socialist, and being compared to Fidel Castro (whom by the way is a communist - there is a difference) in the same sentance...interesting.

Anyways, I would not consider it a socialist perspective for a profitable company to reward their employees for improved productivity. Sure, there will be some that shine brighter than others, but when you are talking about 140 manufacturing employees, I would have to believe it to be primarily a "team" effort. And, because we are talking a union shop, makes it difficult to reward, based on individual merit.

That thought is hardly a "socialist" viewpoint. True socialism would dictate that the company turn a greater percentage of their profits over to the government, and then the government administers the funds. In this case, Rockwell, is very profitable, thanks to those that purchase their product, sell and support their products...and yes, those that manufacturer their quality products.

What is known:

They were offered a 3% raise in salary / year
They were asked to pay an additional 15% / year towards their health care costs.

What we don't know:

What percentage of the employee's salary is currently deducted for health care costs.
The rate of increase in health care costs that AB is incurring.

We are talking about a corporation who controls their own profits...not government. There are several aspects to the corporate dynamic. The aspect we are discussing here is the dynamic between managament and manufacturing employees.


Ken,

If you deleted the post, how come I received an email about it? I didn't receive an email that said "and oh by the way, Ken has deleted his post, so disregard this email" I apologize for posting what you deleted in that I didn't know you could delete something that had already posted.

I have always taken the view that you make your decision of posting before posting...not after...also, I am of the belief that once something is said...whether in written form or spoken form, it can't be taken back. Whether your post appeared on line or not is only part of the issue. I received notification of it and therefore read it. Your comments were directed at me, so if you didn't want me to see it, you shouldn't have posted it originally. Also, you have been here long enough to know that we receive notification, advising us of posts to a thread we have responded to.

I probably have as much of a dislike for the unions of today as you do, if not more. Once used to correct the corporate abuse of employees, have now become a bully and seriously compromised our competitiveness as a manufacturing nation.

So, because I posted public information that I thought might be of interest to the forum, and the fact that they are a competitor, you believe that I have an agenda...interesting.

Whether you choose to respond to anything I post, is entirely up to you. Your opinions are always welcomed. That doesn't mean I will always agree with them, just as you don't always agree with me.


Bernie,

Who hasn't revised a post even to the extent of deleting it on second view?

I have never deleted a post once it has posted (only edited). Didn't know you could.


Ron,

Many here work with PLCs and other automation equipment on a daily basis, they can not be concerned with the machinations and operation of any business whose components they use.

Why not? Don't you think if there was a problem with something that would affect their receiving product that they should know about it. What happens when / if the strike becomes protracted...and shipments are delayed? Should they know about it then? Of course it affects them. Companies have gone out of business because they can't ship product.

A question Stephen, since I believe you are Entertron, what did you "net" last year and how much did you share with your employees?

Answer - no one's business.

I will say this with regards to employee compensation...their last raise was more than 3% and with regards to health insurance, we pay 100% of their individual premium and 50% of their family premium with our employees sharing in that cost.

As for Stephen creating this post, I too thought it was inappropriate. As Ken mentioned you are a competitor; which means the less stated about or too the competition the better.

Shall I ask for permission of the forum before posting?

Whether you consider it appropriate or not, is an opinion.
 
Having grown up in Columbus In. I have seen strikes at several major companies in our area and I cannot recount one instance where anything positive came about.
I don't think I've heard of anything positive coming out of a strike either... at least not in the last 20 years or so. Makes you wonder if the unions are looking after their members or themselves...


Stephen, I think you had every right to start this thread, you are fully responsible for your actions, like everyone else, and you know it so feel free to post what you want. That said your first post draws some indirect conclusions that don't paint your competitor in a good light which, because it came from you and they are your competitor, does not paint you or your company in a good light (IMHO), but hey, its your company....

My only comment on the strike at AB is that we do not know enough to judge if the employees have made a reasonable decision; we don't know if they were getting paid $5/hr or $50/hr or anything else so really we don't have any way of judging their actions.


A question Stephen, since I believe you are Entertron, what did you "net" last year and how much did you share with your employees?
Answer - no one's business.
Good for you Stephen! As long as you own the company its no one else's business how much you net or how you compensate your employees.
 

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