Timesizing® Associates - Homepage

---

Timesizing News, November 21-25, 2001
[Commentary] ©2001 Phil Hyde, The Timesizing Wire, Box 117, Harvard Sq, Cambridge MA 02238 USA 617-623-8080

11/24/2001  today's breaking Timesizing news round the world -

1. Analysis - Growth gaps widen as French leave Germans [in] dust, by Alister Bull, Reuters 09:18 11-23-01 via AOLNews.
   FRANKFURT...- Evidence of a two-speed euro zone mounted on Friday after data showed that France was still growing while Germany heads into recession.... French GDP grew by 0.5% quarter on quarter during the July-September period versus a 0.1% fall in Germany....
   "In the last three years France has been consistently above German growth," said Wolfgang Neumann at the Franco/German Institute in Ludwigsburg.
   [Isn't that a 'coincidence' - those are the three years when France was preparing to apply the 35-hour workweek to big companies, applying it to big companies, and preparing to apply it to small companies and government - and its success would have been even more dramatic if the French government had led from the front rather than the rear.]
   "Now there is a time of weakness, the Germans are suffering more...(and) France is benefiting from its structural advantages," he said....
   "The German economy is too rigid, both in the labor market and the capital market. Whenever it gets a chance to change, the establishment pulls back," said economist Fabio Scacciavillani at Goldman Sachs in London.
   Another difference between the two economies has been the more active role played by the Paris government. One example has been the controversial shift to a 35 hour work week, which may have made its labour market more flexible and actually given households more time to shop - an important reason for the higher growth was a surge in consumption....
   [Note that this is not very active, and allows deactivation of a lot of other government activities like straining for job creation and unemployment-welfare-prison support. France wouldn't even have had to do the following if it had focused on This One Thing = Timesizing -]
   France's socialist government last month announced a package of measures to prop up spending which economists estimated was worth a quarter point of GDP....
   [Quit propping and just centrifuge the wealth by getting more sectors onto the 35-hour workweek (e.g., the gov't itself! and smaller companies) and by enforcing overtime, or better, converting it to training and hiring. Then make that rigid 35-hour workweek flexible and let it fluctuate against unemployment. Unemployment too high? Decrement the workweek. Too low? (Yeah right.) Increment the workweek. The relationship should be automated as soon as possible for a nature-based homeostatic system.]

2. Poland relaunches search for job-creation pact, by Douglas Busvine, Reuters 09:05 11-23-01 via AOLNews.
   WARSAW...- Poland launched a fresh bid on Friday to create a viable forum for dialogue between employers and trade unions aimed at fighting soaring unemployment after earlier attempts in the 1990s failed.... [Just look over at France and learn - see story above.]
   According to World Bank figures, the net pay of Polish workers is just 49% of total costs to the employer. That wide tax "wedge" in Poland acts as a deterrent to creating jobs.
   [Quit taxing the things you want, like jobs and sales, and tax the things you don't want - big sluggish pools of money, i.e., the top income brackets.]
   Analysts say it will be tough to persuade trade unions that greater flexibility on hiring and firing and on working hours will act [as] effective long-term job creation mechanisms.
   [We agree on these long-term job creation mechanisms, as long as "firing" means individual firing on a case-by-case basis and not mass layoffs. And we particularly agree on shorter working hours, which don't strain to create jobs so much as to simply share the work at whatever workweek level is required to give everyone the ability to be self-supporting so the gov't/taxpayers don't have to support them. We don't agree that it will tough to persuade trade unions of this. Our research indicates that labor is roughly 50/50 on this, half get it and half don't. If we explained it better, we could raise the fraction that 'get' it to 75-80%. As a fact of US history, the AFL in the 30s 'got' it, the CIO didn't. In Chicago in the 1970s, there was actually an All-Unions Committee to Shorten the Workweek. So it's definitely not a 'given' that labor is going to resist hours cuts and work sharing. After all, labor led the way for the first two-thirds of US history.]
   "It is very difficult to convince unions that loosening job protection is ultimately going to improve employment," said Jan Rutkowski, a labour economist at the World Bank in Warsaw....
   [That's because on the face of it, that is a false statement. Loosening hiring and case-by-case firing is not loosening job protection but rather strengthening it. Loosening controls against mass layoffs, however, destroys jobs and starts a downward spiral of fewer jobs, less consumer spending, less output, fewer jobs, less consumer spending, etc. Jan Rutkowski has not thought this through very deeply if at all. He's just parrotting the received "wisdom" which ain't worth the powder to blow it to hell. He continues -]
   Rutkowski said the most effective way to boost jobs would be to lower Poland's minimum wage of $185 a month, especially for young people, 40% of whom are out of work....
   [Amen to that, but not without timesizing fully implemented. With gradual workweek reduction flexibly responding to high unemployment and the resulting worksharing mopping up that labor surplus and engaging market forces to flexibly raise wages automatically, you don't need stifling minimum-wage laws. You've got something more flexible and self-enforcing.]

3. Brazil Scania workers threaten strike over job cuts, Reuters 14:40 11-23-01 via AOLNews.
   SAO PAULO...- Workers at a Scania plant in Brazil on Friday said they would strike if the Swedish truck maker implemented layoffs, the latest sign of labor unrest due to the slowdown in Latin America's biggest economy.
   The ABC Metalworkers Union said the 2,300 workers at Scania's truck and bus plant had rejected the company's plan to cut salaries and working hours in order to avoid trimming 400 jobs, or 17% of staff, and will only accept a reduced working week....
   [So what's the diff? Here we go again, and again, waddaya wanna bet we aren't being told the full story?! The ABC union is not so naive as to want workweek cuts without the corresponding weekly paycuts that are the reason for the whole proposed change in the first place and the company's ticket to survival.]
   The row comes hot on the heels of a week-long strike at Volkswagen AG's plant outside Sao Paulo after a similar wage and working hour cut plan outraged workers....
   [No it didn't. The plan to replace 6% of the workforce each year outraged workers. They have just actually accepted the plan to cut pay and working hours. How ignorant is this reporter of Reuters' own reports? See 11/22 #1 below. Oh look, this report even includes it in the very next paragraph -]
   The 16,000 workers at the VW plant on Wednesday accepted a 15% cut in wages [let's be clear, that's weekly pay, not hourly wages] and working hours, 700 voluntary redundancies [meaning buyouts?], and stricter productivity evaluation to spare [i.e., avoid] an initially planned 3,000 layoffs..\..
   [Guess once again, we'll just have to wait until Reuters gets a reporter who can get the real story.]
   A Scania spokesman said weak demand for the company's trucks and buses meant it had to reduce costs by about 20%, but it has declined to say what salary and schedule cuts it has proposed to its local employees....
   [So ask the employees, duh.]

1. Labor union chief raps Koizumi's reform drive as 'dangerous', Kyodo via AP-NY-11-22-01 0728EST via AOLNews.
   YOKOHAMA...- The head of Japan's largest labor organization on Thursday denounced Prime Minister Junichiro Koizumi's structural reform drive as 'very dangerous' and called on government to improve the nation's employment situation. Kiyoshi Sasamori, president of the 7.6m-strong Japanese Trade Union Confederation (Rengo), said at a panel discussion in Yokohama that "Rengo will challenge Koizumi's structural reform strategically and deliberately."... Rengo told the powerful Federation of Economic Organizations (Keidanren) earlier this month that it will accept a proposed reduction in basic wages [do they mean weekly pay, but not hourly wages because hours are reduced proportionately?] given shorter working hours expected [willynilly] as the economic slump continues. Rengo has compromised on its wage [i.e., pay] policy as it places emphasis on ensuring the maintenance of employment....
   [Smart union!]
   It has also said it will not put forth a uniform wage increase during annual wage negotiations this coming spring, in the hope the move would discourage employers from cutting jobs..\..
   [Very smart union! They must know that if the labor surplus gets even worse, they're bargaining power gets even weaker.]
   Rengo provides a major support base for..\..the main opposition Democratic Party of Japan (DPJ)..\.. Naoto Kan, secretary general of the...DPJ, who appeared..\..at a panel discussion in Yokohama...said his party will pursue a double-track approach of restoring the nation's fiscal health and economic recovery. "We will vigorously proceed with structural reforms but at the same time it is necessary to create new jobs and share them with each other," Kan added....
   [Well we disagree with government straining to create new jobs artificially, but if Kan and the DPJ is talking the language of work sharing and Rengo is talking about surfing the shorter working hours apparently occuring willynilly as the economic slump continues, maybe the two of them will get it together and realize all they have to do is share the existing work, and the resulting centrifugation of the national income (as the labor glut falls) and activation of the spending power now hibernating in the top brackets will make it unnecessary to strain for new job creation. (And mandatory reinvestment of overtime/overwork earnings would render workoholics system-safe.)]
   Japan's jobless rate rose to a record high 5.3% in September....

2. Emblematic VW factory in Brazil embarks on new era, by Mary Milliken, Reuters 13:48 11-22-01 via AOLNews.
   SAO PAULO, Brazil...- Like the hundreds of thousands of vintage VW Beetles on Brazilian roads, German auto giant Volkswagen's [Anchieta] factory on the outskirts of Sao Paulo was built to last.
   [Oops, that runs against the built-in obsolescence imperative.]
   ...With a five-year labor agreement approved by 16,000 workers on Wednesday and investments coming onstream, Brazil's top carmaker is readly to begin a new era. The next life cycle for the 42-year-old auto plant in Sao Bernardo do Campo - Brazil's first ever and one of VW's largest - will include new assembly lines and new models.... The project will be a watershed for VW after maintaining compact car model Gol as a best-seller in Latin America's largest economy since its launch in 1982. "The Gol line will eventually be terminated and the Polo line will come on...," says Ricardo Durazzo, an auto industry consultant at A.T. Kearney.... VW Brazil president Herbert Demel...who is due to leave Brazil after the Polo's launch, suspended the 3,000 layoffs planned for Anchieta after the ABC Metalworkers Union agreed to cut working hours and wages [meaning weekly pay, not hourly wages] by 15% and implement a new productivity evaluation scheme....

3. Small airlines adapting quicker, by Nick Wadhams, AP-NY-11-22-01 1256EST.
   [Hey don't we know it. Ever since E.F. Schumacher came out with Small Is Beautiful in 1973.]
   ...While the nation's largest airlines posted $2.4B in losses and laid off more than 100,000 employees in Q3 [and whined for gov't bailout], three small airlines - AirTran, Frontier and jetBlue - are going ahead with plans to add more routes and scoop up more customers as larger airlines struggle.... Frontier and jetBlue both reported profits in Q3. AirTran reported a loss of $10.6m, including charges directly related to 9/11, after 11 straight profitable quarters.... They have imitated SouthWest Airlines, a larger carrier that distinguished itself with low fares and a level of customer service that still hasn't caught on among larger airlines.... Other airlines have followed the pattern. Canada's Westjet...offered a deal for Halloween giving free tickets to anyone with the last name of "Black," "Orange" or "Jack(s)."
   [How about "O'Lantern"?]
   ...Despite its financial troubles, AirTran, of Orlando, Fla., announced it will fly to Baltimore from an Atlanta hub. The move came after US Airways' low-fare carrier, MetroJet, cut its route between Baltimore and Atlanta. [AirTran] also added a flight to Tallahassee.... Smaller airlines benefit from lower costs and more stable customer bases, analysts say. They also are not saddled with expensive labor contracts and have better relationships with unions. AirTran mechanics and other workers represented by the Teamsters union have agreed to a shorter work week and reduced compensation to avoid layoffs....
   [Hey, AirTran has already been twice in the news - 11/02 #1 and 9/19. Funny, Nick Wadhams didn't come up with another small airline that's been adapting quicker with timesizing, especially when it has almost the same name - AmTran, parent of American Trans Air based in Indianapolis - which was in the news on 11/14 #1. For that matter, we mentioned a couple of small airlines yesterday that have been using temporary furloughs to survive (Frontier Air, 11/22 #3 below, and Mesaba Aviation, 11/22 #6 below) and there's a smallish airline in Canada that's been talking about reduced work hours - Canada 3000 (10/16 #1). There've also been a couple of big airlines that've been adapting quicker with timesizing - there's Air Canada's 4-day workweek (10/12 #1, 10/02 #2, 9/26 #2, and 7/05 #1) and Lufthansa has at least been talking a lot about a 4-day workweek (11/21 #2 below and 11/15 #1, 10/26 #2, 10/22 #1, 10/20 #1, 10/15 #2).]
   When Frontier was faced with the possibility of laying off 40 pilots, the union agreed to an 11% pay cut through Dec. 31 to make sure no pilot jobs were lost [any corresponding hours cuts?]. "We have our differences from time to time but we always manage to work things out," said Ron Stock, president of the Frontier Airline Pilots Assoc....

4. [mgmt suddenly wants timesizing, but hasn't made clear it replaces downsizing]
   Hotel unfairness, editorial, BG, A30.
   ...Management wants the flexibility to assign workers to shifts of fewer than 8 hours. Efficiencies, they stress, are important in an industry where some experts predict a 10% decline in annual revenue generated per room, easily the sharpest decline in 3 decades.
   [Management would be more convincing to this group of people who don't see the ripple effect from 9/11 on their industry if (1) they presented them with the figures in simple and compelling form and more important (2) if they shared the pain. Lincoln Electric timesizes by operating on the principle of 'everyone sacrifices together, starting at the top.']
   But managers already have the ability to control payroll through layoffs. And they're not shy about using that tool. Roughly one-third of the city's 3,000 unionized hotel workers have been laid off since Sept. 11 [see our 'not counting' item on 11/16/2001.]
   [Apparently hotel management hasn't been clear enough about the fact that timesizing is an alternative to downsizing. If unions will let them start timesizing, they'll stop downsizing. Volkswagen/Brazil got a union agreement at its biggest plant when it finally made this clear - see 11/22 #1 below.]
   In this climate, hotel workers don't know if or when they will be called to work. But the cooks, doormen, waiters, bellmen, housekeepers and cashiers who do get that call deserve some semblance of normalcy - the basic, 8-hour shift....
   [We would say "standard" rather than "basic." Otherwise, we agree. Surveys have shown that schedule changes are the most anxiety-provoking changes for employees next to the question of job security. When management adopts timesizing, especially if it wakes up to timesizing's advantages halfway through a crisis after it's already been downsizing, it needs to be very clear that it's now either one or the other, not both - hours cuts OR job cuts, not both.]
   Hoteliers developed layers of protection in boom years like 1999, when the industry amassed $22B nationally in pretax profits. The workers who make up the rooms enjoy no such padding.

1. VW workers accept pay and hours cuts, AP-NY-11-21-01 1446EST via AOLNews.
   SAO PAULO, Brazil - Some 16,000 workers at Volkwagen AG's largest and oldest Brazilian factory voted Wednesday to accept a management offer to cut salaries and working hours by 15% to save 3,000 jobs at the plant.
   [Ooookay, we take back all the nasty things we said about these employees and their leader, Luiz Marinho. Apparently the problem, undisclosed till Tuesday, was that strange VW/Brazil plan to slowly replace their current workforce with younger people at 30% lower wages.]
   Almost all the 16,000 workers from the Sao Bernardo do Campo plant voted to accept the deal.... Marinho hammered out a compromise that saved most of the threatened jobs through 2006 in return for a 15% cut in working hours and wages, although it appeared there would be some performance-related bonuses as compensation for the salary cut.
   [Still, astonishingly, no mention of the real bone of contention - that bizarre VW/Sao Bernardo plan to gradually replace the workforce with cheaper employees. Where do they get these reporters?!]
   Some 6,500 workers at a nearby VW plant had already agreed to similar pay and hour cuts to preserve another 1,000 jobs that were initially also threatened....
   [But presumably VW was not pressing them to commit slow suicide. The 15% hourscut is similar to the Robien Law in France, 1995-96, where the government, wanting help in reducing 12% nationwide unemployment, offered taxcuts to companies that would do a 10% hourscut and hire 10% more staff, and a bigger taxcut if they'd do 15% and 15%. More on the Robien plan on our working models page - scan down ¾ of the page to our 'Nations' section.]

2. General Motors Corp., NYT, C5.
   ...[will] shut down its Detroit-Hamtramck Assembly Plant, where Buick LeSabres and Cadillac Sevilles and Devilles [whoa, new paradigm!] are built, from Mon. thru Fri. next week, and temporarily idle 3,200 workers to adjust inventory levels.
   [I.e., to stop flooding the market. Sooner or later the auto cos. will smarten up, quit the traumatic and costly on&off jerkiness and just modulate their workweeks on a week by week basis.]

3. Frontier restores salaries to levels before Sept. 11, AP via NYT, C5.
   Frontier Airlines said yesterday that it would restore salaries and overtime...and would rehire furloughed workers. Employees had agreed to pay cuts after the airline industry suffered its worst crisis ever. Frontier, based in Denver, [will] restore about half of the 11% pilot salary reduction on Dec. 1 and all of it by Dec. 29. Overtime will also be allowed again.
   [i.e., overtime was disallowed after Sept. 11 to save money and jobs.]
   Other employees who took pay cuts - from 3% to 40% for officers -
   [Notice that this constitutes the independent invention of graduated income tax in the private sector - up yours, Steve Forbes, you and your short-sighted flat tax! - which doesn't do nearly enough centrifugation of spending power out to the people who really use it to be worth a damn. And without high levels of centrifugation, no recovery. Case in point? The U.S. recovery from the Great Depression during World War II was accelerated tremendously by the steeply graduated personal income tax. And the boom years of the 1950s were also lifted by that deconcentration and activation of spending power - until in the early 1960s when a Democratic! president, JFK, started the tax-flattening process.]
   - will have their paychecks restored by Dec. 29.
   [So in terms of primitive timesizing, we have here overtime cuts and furloughs, and no mention of layoffs. "Timesizing, not downsizing" - the way of the future.]

4. Verizon Communications offering buyouts to union workers, Bloomberg via NYT, C5.
   ...a significant number of its 130,000 union employees in the last week to cut costs after profit dropped..\.. The telephone service provider...has 256,000 employees.... Verizon has eliminated 7,500 jobs [so far] this year, mainly through attrition, and the equivalent of 14,000 positions by reducing overtime and shedding contractors, a company spokesman, Peter Thonis, said.

5. Terra Networks workers to be furloughed, Bloomberg via NYT, C3.
   ...Owner of the Lycos group of websites is requiring most of its 800 U.S. employees to use 5 vacation days or take unpaid time off between Christmas and New Year's. The company, based in Barcelona, Spain, is shutting its American operations in Waltham, Mass., and Mountain View, Calif. [for the week] leaving only "core employees" needed to keep the websites running, a spokeswoman said.
   [This is reminiscent of EMC on 11/01 #3 & Cymer on 10/31 #3. The Boston Globe version of this story adds a line -]
   Terra furloughs, Bloomberg via BG, B7.
   ...Core employees will take time off later, she said.

6. Mesaba cuts rates for Northwest 10 pct temporarily, Reuters 11:12 11-21-01 via AOLNews.
   MINNEAPOLIS...- Mesaba Holdings Inc. {MAIR.O}, parent of regional air carrier Mesaba Aviation Inc., said on Wednesday it will charge its code-sharing partner, Northwest Airlines, 10% less for operating Mesaba flights from Oct. thru Dec. to help cope with reduced travel after the Sept. 11 attacks.... Mesaba cut its flight schedule by 20%, and laid off or furloughed about 400 of the airline's 3,700 employees, to reduce operating expenses as travel demand fell after the attacks in September....

1. Mass. Medical Society calls for shorter work hours for young doctors; New policy applauded by national med student organization, U.S. Newswire, Nov 20 2001 via AOLNews.
   Patients at many Massachusetts hospitals could be protected from possible medical errors committed by fatigued young doctors if a new policy adopted by the state's largest physicians group is made into state law, according to the American Medical Student Association (AMSA), the nation's largest indepenedent medical student organization. Young doctors knows as residents are typically required to work 36-hour shifts and 120-hour work weeks.
   The Massachusetts Medical Society (MMS) adopted a resolution last weekend calling for an 80-hour week for residents and limiting shifts to 24 hours, requiring that residents get one day off in every seven and limiting on-call shifts to once in every three nights.
   [All we can say is, don't get sick in Massachusetts - or probably any other state in this self-described "advanced" nation!]
   According to news reports, the resolution calls on MMS to propose state legislation that would enforce the new recommendations. Boston-area resident-physicians and medical students proposed the resolution.
   The new MMS policy mirrors HR 3236, The Patient and Physician Safety & Protection Act (PPSPA), which was introduced Nov. 6, 2001 by Rep. John Conyers (D-Mich.) and 12 other members of Congress. Organizations such as AMSA, the Committee of Interns and Residents, the Center for Patient Advocacy, the American Medical Women's Assoc., Public Citizen, and the Service Employees International Union support the PPSPA....
   "Forcing residents to work long hours with very little sleep places the doctors and their patients in harm's way," \said\ Jaya Agrawal, AMSA president,...4th-year medical student at Brown University [and] candidate for a masters in public health degree at Harvard University.... "Limiting the hours of residents to even 80 hours a week could positively impact the quality of patient care at Massachusetts hospitals and all across the country."
   If the new policy were to become law in Mass., that state would join New York as the only states in the nation to limit resident work hours in the interests of public safety.
   The following Boston-area individuals are available for comment:
   • Boston U. med student Josh Rising at 617-882-8051 (pager)
   • Sonya Rasminsky MD and Ruth Potee MD of the Committee of Interns and Residents, 617-414-5301 (office).
     [We had previous stories on this issue on 11/09 #3, 7/19 #1 and 5/31 #1]
   Contact: Tim Clarke Jr of AMSA, 703-620-6600, ext. 207 or 703-732-7021 (mobile).

2. Lufthansa says it expects layoffs, AP-NY-11-20-01 1415EST via AOLNews.
   FRANKFURT, Germany - German airline Lufthansa AG expects to lay off an unspecified number of employees to compensate for losses suffered in the wake of the Sept. 11 terrorist attacks. The airline will shed staff members that are still in their probationary period and start forced redundancies [= layoffs] if necessary, spokesman Thomas Jachnow said....
   Lufthansa, which employs 69,500, will start cutting the working hours for cabin crew and if this doesn't sufficiently cut costs, the airline will discontinue contracts with pilots still in their probationary period, Jachnow said.... Lufthansa said number of its passengers in October has fell 13.3%, compared with the same month the year before. Meanwhile, its overall load factor [ratio of available seats and space filled] fell 7.2 percentage points to 65.9%..\..
   Over the weekend, talks between Lufthansa and the giant VERDI labor union were discontinued as the two sides couldn't agree on cost-cutting measures....
   [Maybe VERDI would appreciate their employer's attempts to avoid downsizing with timesizing if they took a look at what some other airlines are doing. For example -]
   ...Italian newspapers reported that Italy's flagship carrier Alitalia has decided to cut 3,500 jobs, or 15% of its workforce, as part of its plan to contain losses.... Alitalia said that the number of its passengers in October has decreased by 31.5%. Its load factor decreased by 13.2 percentage points to 61.7%.... The ailing airline, 53% of which is owned by the Treasury Ministry, also wants the government to come up with $1.3-1.8B in aid, Corriere delle Sera reported, [mostly] from a convertible bond issue....
   [Lufthansa was also in our timesizing news on 11/15 #1, 10/26 #2, 10/22 #1, 10/20 #1, 10/15 #2.]