Timesizing® Associates

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Downsizings July 1-15/2000
[Commentary] ©2000 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080

7/15/00  no downsizings reported

7/14/00  2 downsizings reported, totaling 273 lost jobs -

1. VF Workwear, NYT, C4.
   ...Nashville, a manufacturer of uniforms, will shut down a shirt plant in Dickson, Tenn., in mid-September, idling about 260 workers, making it the third Tennessee factory closing this year.

2. [high tech downsizing alert -]
   eBay, NYT, C4.
   ...San Jose, Calif., an online auctioneer, is cutting back its live auction businesses in a move that will result in 13 layoffs of the 21 employees in the Chicago offices of its subsidiary Butterfield & Butterfield.
   [That's a 62% downsizing within this one office. Does this mean the online auction fad is fading - probably because of the risk of fraud?]

1. Boston Scientific to fire...1,900 workers nationwide, close plants..\..- 850 employees in Watertown [Mass.] out jobs, by Ronald Rosenberg, Boston Globe, D1.
   [The punch-pulling NYT version is "Boston Scientific to cut 1,000 jobs for coming move," Bridge News via NYT, C6.] ...The Natick [Mass.]-based maker of medical devices..\..seeking to lower costs to keep pace with competitors, will shut down manufacturing at four sites in Watertown and dismiss 850 workers there as part of a rollback that will idle 1,900 employees nationwide. [Boston Scientific] said the move, which will also close plants in Plymouth, Minn., and Redmond, Wash., will be offset be some new hiring. [It] will add about 800 jobs at its two factories in Ireland and another 100 at its production site in Miami. All told, the restructuring will result in the loss of 1,000 jobs, or about 7.7% of the company's work force.
   "I don't get any pleasure from having to disrupt 1,900 people's lives," said James Tobin, the Boston Scientific president and chief executive. "But I have to do this to preserve those [jobs] that remain."
   [Oh we know. You're really such a good guy and you're just a victim here too, aren't you. Of course, if you had any kind of long view or imagination, you'd be doing a 7.7% hours&pay cut for the whole company - including yourself - "timesizing, not downsizing" - instead of a 7.7% complete job cut for others - so you never feel the pain you inflict - not exactly what you'd call a sensitive feedback system. As it is, you are aggravating the downside of the business cycle. Never mind "disrupting 1,900 people's lives," you are curtailing 1,900 consumers' spending, and these are your customers' customers. And here's your rationalization -]
   With unemployment low and the job market brisk, Tobin said he thought the workers let go "will find their next jobs pretty easily in this environment."
   [All through the Roaring '20s people said unemployment was low too, but there's another side to this supposedly low unemployment. It's twice what we regarded as alarming 50 years ago when the economy was really booming, and it's no longer counting the real problem anyway - which is marginalized employment = the working poor (eg: people working multiple part-time jobs for low pay and no benefits), unemployment, disability, and our record homelessness and incarceration. It's the usual problem of using technology to replace people instead of to make their lives easier. Symptom? An outdated or rising workweek. Result? Technology-multiplied productivity but no comparably multiplied consumption, because most of the technological profits are being concentrated in the top income brackets (the workforce doesn't have the leverage to get its share) - and "the more concentration, the less circulation." A classic on-ramp to economic depression.]
   Operating with two shifts and a small overnight crew, Boston Scientific's Watertown work force makes angioplasty products used by doctors to clear clogged arteries.
   [Q: Would you want to be treated with products made by downsizing-demoralized employees? A: No more than you'd want to be treated by doctors operating on 4 hours of sleep a night or nurses on their 16th hour of overtime - the schedule that St. Vincent's Hospital in Worcester, Mass. wanted the option to impose a couple of months ago. All part of America's growing time blindness, sado-masochism (eg: "I don't feel important unless I'm on the verge of burnout"), and deteriorating quality of life relative to practically anywhere in continental Europe.]
   The company attracted a large international work force, many of them unskilled and new arrivals....
   [So they're already paying these people rock-bottom wages anyway - and they're still whining. And check out the additional costs of all this "musical jobs" mishigas - the accompanying article in the Globe is -]
   Laid off, but paid to stay awhile - Employees are laid off, but paid bonuses to stay awhile, by Jerry Ackerman, Boston Globe, D1.
   ...The retention bonuses are being offered...as a way to maintain output over the coming 18 months while operations are shifted to plants in Ireland and Florida or to independent suppliers....
   [In other words, "Here's a bribe - now cooperate with us in murdering your livelihood."]
   Some employees seemed stunned by the news...but most seemed to already know, through in-plant rumors and other sources, that changes were in store and their jobs were at risk..\..
   "We have a very dedicated, long-term, experienced work force..." said..\..Robert Strasser, VP for operations at Boston Scientific's four-building complex here....
   [Isn't it strange how the dedication, long-term view, and experience is all on one side - labor - and absent on the side of management. As the other article reveals, Boston Scientific president and CEO James Tobin only "joined the company in March 1999." And yet management repeatedly tries to color the debate with the claim that it's labor and not themselves who have "started class warfare." American management has turned into a band of job-hopping hired guns, retained by short-sighted boards and speculators, oh sorry, "investors," to hype stock prices by giving the appearance of positive change. But it's really just change for the sake of change, and destructive in the aggregate long-term because it subjects the national consumer base to "death by a thousand cuts." Since CEO Tobin himself is talking about disrupting 1,900 people's lives, we're going to count the full 1,900 cuts here, despite the additional jobs, which are suspect under the circumstances. Here's the story on them, from the Bridge News/NYT version -]
   ...The company...said the plan would involve a net gain of 100 jobs in its Miami plant; 525 jobs in Cork, Ireland; and 275 positions in its plant in Galway, Ireland....
   [Additional job churning is provided by the relocation of a couple of units, as described in the primary Boston Globe story -]
   ...Both Medi-tech and the corporate research center are now on the Natick campus, and 100 employees from these operations will move to Watertown....
   [Timesizing.com doesn't object to management making all kinds of stupid, arbitrary and unconsultative changes. On the contrary, we applaud the experimentation which these provide (as Bucky Fuller said, you can't learn less from experimentation). However, to engage in that kind of generally unsuccessful and inefficient churning with no company- or economy-level system for minimizing damage to the national consumer base and to "effective demand" is the whole mechanism by which we keep inducing recessions and ever deeper depressions. We need to cut the shillyshallying, share the vanishing work, and implement continuous overtime-targeted training and hiring, right in the workplace. The Timesizing program represents a first-cut design outline of these essential functions. It debugs the "social software" of our current capitalism and returns it from its current win-lose operating mode to a win-win one - and keeps it there.]

2. Maker of Hush Puppies to close plants in 5 U.S. cities, AP via NYT, C6.
   Wolverine World Wide Inc...plans to...cut 1,400 jobs, or 25% of its work force [as] part of [a] plan to consolidate operations at profitable plants and focus on a narrower product range.... During the next several months, the company will close plants in Malone, NY; Kirksville, Mo; Aguadilla, PR; San Jose, Costa Rica; and Ontario [Canada].

3. Delphi Automotive to shed 900 manufacturing workers, Bloomberg via NYT, C6.
   ...The largest auto-parts maker..\..said yesterday that it would dismiss...workers in France, Britain and Poland as [it] reorganizes its European and Latin American businesses to cut costs. The job cuts are 1.9% of Delphi's 46,500 European employees. The company also said it wanted to trim the administrative staff at its HQ is Troy, Mich., by hiring out work not directly related to its main business.

4. Wachovia to close check processing center in Raleigh, AP via NYT, C6.
   Thew Wachovia Corp. will lay off 245 employees in the next year.... The parent of Wachovia Bank announced on Tuesday that it would shut down the center and transfer work to more advanced operations in Charlotte NC, Atlanta and Columbia SC. New technology at the other sites allows workers to pull up images of checks and other documents, eliminating the need to have employees working where the paperwork is generated....
   [Still convinced that "technology creates more work than it destroys"? - (or even where it does, that the new work is more urgently demanded than the old?)]

1. GenRad to reorganize into 3 units, take charge, Bloomberg via Boston Globe, D7.
   ...A [Westford, Mass.-based] maker of computerized electronic-testing equipment said it will reorganize into 3 new divisions ["Diagnostic, Functional & Process Solutions"] and take a 2nd-quarter charge to cover severance for some senior management jobs. The company...didn't disclose which, or how many, senior management jobs were eliminated. [Its] shares rose...10% [after having] fallen 41% this year....

1. Honeywell planning to cut 6,000 more jobs, Bloomberg via Boston Globe, E2.
   ...The biggest maker of automated controls will cut 6,000 more jobs to pare costs [and markets - ed.] because profit will be less than expected this year and next.... "We are going to take significant action over the next three or four quarters to fix, to close, or to sell those businesses that are not strategic or pulling their weight," chief executive Michael Bonsignore said at an investor meeting....
   ["Investor meeting"? Try "speculator meeting." Our brilliant CEOs, hat in hand, ever explaining to those who want money for nothing while dissing those who work for their money - their own employees. "Discipline of the workforce"? We don't need "discipline of the workforce" - we need discipline of top management - some way of preventing them from the aggregate downsizing of their own markets in the process of the piecemeal downsizing of their own employees. The only non-stifling way to do this is to make them responsible for recycling their own human-capital "trash" - by making the under-employment rate determine the maximum workweek on a gradually fluctuating basis - to "squeeze out" the vanishing work (as robots proliferate) onto a growing human population, and facilitating the human adjustment with continuous training, market-oriented via the reinvestment of overtime profits and earnings in training and hiring. We call it "Timesizing."]

2. Spiking electricity rates forcing layoffs in the West [e.g., 525 at Alcoa], AP via Boston Globe, E6.
   From the copper mines of Montana to the aluminum plants in Oregon, companies across the West are laying off workers because of skyrocketing electricity costs. Rising gasoline prices are tame compared to electricity rates, which have climbed to more than 40 times normal levels in the past two weeks. Usually between $20-30 per megawatt hour, wholesale prices spiked to more than $1,000 per MWH in late June before settling down a bit so far this month. Could the power rates be electrocuting the economy? Not yet, because job losses appear to number no more than a few thousand.
   [How comforting.]
   And consumers aren't likely to feel the pinch anytime soon, since most of them get power bought under fixed contracts....
   Rising computer use is a major reason that electricity demand is growing by about 2% a year, without comparable increases in power generation, officials said.... Reasons for the electricity increases [also] include hot weather in California and the Northwest that increased demand, while production at hydroelectric dams is lower than normal because of low river flows..\..
   So far, layoffs in the West are concentrated in old-fashioned heavy industries that use a lost of power. For instance:
   • Kaiser Aluminum [on 6/15/00] announced it would lay off 400 workers....
   • Rising electricity prices were one of several factors cited by Alcoa Inc. in closing its Troutdale Reduction plant in Oregon, which will cost 525 workers their jobs by Oct. 1....

3. Spiking electricity rates forcing layoffs in the West [e.g., 350 at Montana Resources], AP via Boston Globe, E6.
   ...So far, layoffs in the West are concentrated in old-fashioned heavy industries that use a lost of power. For instance:...
   • Montana Resources Inc. shut down its copper concentrator in Butte of July 1 because it could not afford the electricity price, and planned to close its copper mine soon, said company lawyer Ron MacDonald [we are not making this up - ed.]. Montana Resources employs 350 workers. It faced an increase from about $35 per MWH to $625....

4. Liz Claiborne gets court approval on acquisition, Dow Jones via NYT, C4.
   ...of the assets of [New York-based] Monet Group Inc. [a designer of] branded jewelry sold mostly through department stores [which] filed for bankruptcy protection May 11. In the months before the filing, the company laid off 200 workers from its Rhode Island plant and moved all manufacturing to Asia....
   [There it is again - Ross Perot's "giant sucking sound" as good American manufacturing jobs leave the country - Alex Marshall's "Brazilification" of America proceeds apace. It couldn't be happening faster if our brilliant "captains of industry" (Veblen's phrase) were doing it on purpose.]

5. ScanSoft firing 20% of work force, closing Calif. office, Bloomberg via Boston Globe, E16.
   [Mentioned briefly by the 7/12 NYT under "Scansoft Inc.", C4.]
   ...A software maker whose shares have fallen 35% this year said it's firing about 70 people...in a bid to achieve profitability.
   [America's brilliant "captains of industry" grope along, trying to raise profits by firing their own markets.]
   ScanSoft will close a Los Gatos, Calif., site and move work to Budapest, where the company employs 43 software engineers.
   [Perot's "giant sucking sound" again, twice in one day!]
   The cost of developing software in Budapest is about one-quarter what it costs in Los Gatos, [Peabody, Mass.-based] Scansoft said.
   [And wages are only one-quarter of those in Los Gatos too, and employees can only buy only one-quarter of the software that Los Gatos employees can buy, or software at only one-quarter the price. At the most, ScanSoft should be trimming 20% of its workweek, not its workforce - that's 20% of its hours and pay - for all, including especially its overpaid top executives - and keeping everyone employed and spending near-normally on a 32-hr workweek. It's called Timesizing and it will be everywhere in 100 years, because the alternative is 1919-1945 over and over again (bubble, pop, depression and war), or a relapse into slavery and quiet, piecemeal, "genteel" genocide (the antebellum South).]

1. Warnaco Inc., NYT, C4.
   ...New York, the apparel maker, said it was closing a manufacturing plant in Ottawa, cutting 425 jobs, or 1.5% of its work force.

2. TicketMaster Group, NYT, C4.
   ...Los Angeles, the ticketing company, owned by USA Networks, said it would dismiss 382 people when it shuts a Dallas call center.

3. [And so it begins -]
   Playing the China card - One company's decision, and the employees left behind, by Joseph Kahn, NYT, C1.
   ...The Zebco Corporation...began moving much of its fishing reel production to China at the end of June. Though the company has been under pressure for a long time, the move came just a few weeks after the House [of Representatives in Washington] passed a measure that would end cold war [and human-rights abuse - ed.] restrictions on trade with China. Most of Zebco's 240 workers will eventually lose their jobs, and [Marilyn] Grant, who has worked at the company's stone headquarters plant in Tulsa for 25 years [now driving a forklift], expects to be one of them. "I thought this only happened to other people, and now it's about to happen to me," Ms. Grant said....
   In promoting permanent normal trade relations with China, which the House approved in late May and the Senate is expected to vote on in late July, President Clinton predicted an "almost incalculable" increase in exports of American goods to China. But critics say the move also seems likely to encourage exports of some American jobs.... "Our government just handed our jobs to a Communist country," said Brenda McCoy...a Zebco assembly-line veteran who wore a T-shirt to work that bears the image of two Chinese police officers choking a Chinese labor activist. "It just makes you feel angry and helpless"....
   [Here's a great argument for fair trade vs. braindead "free" trade, to level the playing field against company's paying third-world wages -]
   Even in the last decade, as [Zebco] had to fight competitors that paid much lower hourly wages to workers in Asia, Zebco remained the dominant fishing tackle brand. Though Zebco once tested production in Mexico, it pulled back when its Tulsa workers proved they could produce more reels in less time with fewer defects. ...This year, however, with most of Zebco's competitors having already set up fishing tackle plants in China, allowing them to undercut Zebco's prices at Wal-Marts everywhere, Zebco...found that it could commission Chinese factories to produce and deliver reels to the United States for one-third less than it could make them at home....
   Zebco decided to make most of its low-end reels at factories in China. For now, it will continue to produce more expensive reels in Tulsa, though union officials say the company has put them on notice that it is searching for further ways to lower labor costs, including the possibility of shifting the remaining reels to China, too....
   ...The layoffs, which began on June 27, left Zebco's unionized workers, who are mostly women, perplexed and angry. ...Kristie L. Cater said she had expected to retire in the job. "They kept telling us we were members of the Zebco family," she said with angry sarcasm. "I guess they just forgot that."
   [Here's good example of the fact that it ain't the employees who start the "class warfare."]
   As assembly-line factory jobs go, Zebco offers ordinary pay but solid benefits, including Christmas gifts of stock certificates. Workers returned the loyalty. Turnover was low. Some workers also became avid anglers, showing off Zebco's reels at bass and crappie fishing tournaments.
   [Yep, our uninmaginative, "forced into layoffs" CEOs are laying off their own best markets and marketers.]
   For Linda Allen...an assembly-line supervisor since 1976, work was literally a family affair: her mother and grandmother preceded her in the job.
   [American policies are thus hurting American families, and diminishing America, reducing it gradually to third-world standards and status. But slowly, so we don't notice - like the frog in the warm water that gradually gets heated to boiling.]
   Those ties started to unravel last year. When company executives visited Qingdao...in northeastern China to inspect factories, word leaked out. Then earlier this year, the company pushed assembly-line workers to raise their output by at least 10% a month, and China became a cattle prod. "When we don't get quota, it is another day closer to China taking our jobs," read a Feb. 3 memorandum from the company that was circulated among employees. "So today China won by 45 points." ..\..Kathryn J. Chieger, VP for corporate and investor relations at the Brunswick Co., Zebco's parent company in Lake Forest, Ill...said such memos were intended to show workers what they were up against in terms of competitors that had factories in China.
   [As Sismondi said 181 years ago, unguided competition, as in simplistic "free trade," can reduce employees to slaves with no trouble at all. And the problem for employers then is, where's the markets??? Technology too can reduce employees to slaves if used to replace them instead of to make their lives easier by trimming work per person. Hence the old anecdote - Ford, "Let's see you unionize these robots!" - Reuther, "Let's see you sell them cars." Both unguided competition and people-replacement technology-use are blazing around the world today, and people everywhere are returning closer and closer to slavery. Longer and longer hours, both parents working, weaker unions, worse benefits, costlier health insurance if any, weaker safety net, "low" unemployment (4%) at twice the level regarded as alarmingly high during World War II (2%), rising multiple part-time and disability, record homelessness and incarceration. Used to be that American executives criticized Communism for "reducing the world to the lowest common denominator." Now they're doing it themselves. They have broken the social contract, declared class warfare on their own employees, and forgotten how to share. And all because we picked the wrong horse in the 1930s, minimum wage, propped up with social security, unemployment insurance, workmen's comp and government makework, instead of maximum workweek - which would have given us everything in one efficient sharing strategy. Now almost everything our government does is makework or "makeup for no work." The military-industrial complex has transformed into the prison-industrial complex, warehousing 2,000,000 Americans at $25,000/inmate of ordinary taxpayers' money. The drug war rolls on, just as Prohibition did, distorting our society. And our "elected" "representatives" cooperate with 100s of new billionaire CEOs and 1000s of new millionaire CEOs at reducing the taxes on the rich (such as estate tax) and spinning our situation as a "labor shortage" instead of the skills shortage it is because employers are too spoiled to train - they just want unlimited visas to bring over more pre-trained low-wage youngsters from India and elsewhere overseas. We've repealed hard-learned but now spun as "outdated Depression-era" laws like Glass-Steagall and estate taxes. How long before we repeal that really "old-fashioned Civil-War era" law known as the Emancipation Proclamation? The alternative is Timesizing, Not Downsizing. There is no other alternative. For 67 years since we blocked the 30-hour workweek bill with promises of minimum wages and other lollypops, Ted Kennedy's liberal grocery-list approach has allowed us to keep losing ground. Trying to balance wealth or income first via welfare just creates dependency. It's time to balance employment, quit denying the work-savings of inflooding technology and share the vanishing work on a flexible basis as it gets gobbled up by the robots, computers, cybernetics, and automata.
   [Now fixated on the simplistic free trade notion, already disproved countless times in economic history (e.g., the first thing Republican Hoover did when the Depression arrived to stem the downward spiral by stopping imports and immigration - and it worked), American CEOs have no conventional alternatives but to watch their consumer base spiral downward or deny access to it on the part of their own low-wage Chinese factories. They are creating a worldwide crisis of deflation, just like the end of the Roaring 20s, and as then, the only real alternative is Timesizing.]
   ...Many leading U.S. companies are like Zebco: they face competitive pressure to save money by producing in China - often exporting back to the United States - rather than making goods here to sell in China. ...The push into China is not limited to low-wage assemblers. Cisco, Intel, Eastman Kodak and Motorola are among the multinational companies that have lobbied Congress to grant China permanent normal trade relations even as they have expanded their manufacturing operations in China, according to a survey by the U.S. Business and Industry Council, which has been critical of Clinton administration trade policies. Over all, exports to China will probably grow. But the volume of imports is expected to grow even faster.
   [And we already have a record $30B trade deficit.]
   ...American exports will increase 10% a year if China opens its markets as promised. But [American imports from China will increase] by 7% annually [and] since imports...already exceed exports...by a wide margin, the gaping $62B trade deficit [with China alone] is likely to widen rather than contract.
   ...Asked whether the U.S. was better off with cheaper [products] or job security..., Ms. Grant reflected for a moment. "People might like buying things cheaper," she said. "But...they're going to wake up one day and find that nothing's made here" [and they don't have any jobs or wages to buy things with, however cheap they are - ed.].
   [And that would be a classic deflationary crisis, like the Great Depression.]

4. Brooks Automation buys Mitek's assets, Dow Jones via Boston Globe, C9.
   ...[A Mass.-based supplier of] integrated automation products for the semiconductor, data storage, and flat panel display manufacturing industries..\..acquired substantially all the assets of Mitex Solutions, a run-to-run control company...for a combination of cash, common shares, and future incentives....
   [And what happened to the employees, you ask? "Gone away," of course.]

1. Pacificare Health Systems Inc., NYT, C4.
   ...Santa Ana, Calif., said it would close Medicare health maintenance organization plans serving more than 23,000 Medicare patients next year.

1. Tickets.com Inc., NYT, C3.
   ...Costa Mesa, Calif., an online ticket provider, said it would cut 220 jobs and reorganize its operations into two business units.

2. Micrografx to take charge for job cuts, Reuters via NYT, C3.
   The graphics software maker...said yesterday that it would record an undetermined charge in Q4 for the cost of job cuts and other measures it has taken to reorganize its business. Workforce reductions occurred principally in the U.S., where the company cut 74 jobs, or about 40% of its workforce. U.S. employment now totals 113 workers. Most of the changes were made in the company's Allen, Tex., HQ and involved workers engaged in centralized software development, administrative and technical support....

For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.

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