Drudge is running the headline "Happy Holidays: GM to Cut 30,000 Jobs, Close 9 Plants" with definite implications as to the unfairness of it all, but this sort of creative destruction is exactly what makes America's economy so strong, and the fact that you'd never see such a headline in Western Europe should tell you everything you need to know about their economic weakness.
General Motors Corp. will eliminate 30,000 jobs and close nine North American assembly, stamping and powertrain plants by 2008 as part of an effort to get production in line with demand and position the world's biggest automaker to start making money again after absorbing nearly $4 billion in losses so far this year. ...The 30,000 job cuts represent about 9 percent of GM's global work force of about 325,000 people.
"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Wagoner told employees. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible."
Assuming Wagoner knows what he's talking about, his actions fall squarely into the realm of reasonable and responsible management. He has a duty to the owners of the company -- the millions of shareholders -- to handle their investments profitably. As for the economy itself, eliminating these jobs is a double-win, because not only will less manpower be wasted on unneeded effort, that same manpower can be redirected towards useful endeavors -- a minus is turned into a plus.
And yes, I've been laid-off before, I work in aerospace!
I wonder if there's a proportionate number of white-collar jobs being cut here... or if the cuts are all blue-collar jobs.
I guess I'll never understand why management's mistakes should be paid for by cutting blue-collar jobs.
Who's fault is it that the Chevy Cavalier was left to rot for nearly 10 years with no major improvements while every competitor surpassed it? The workers? No... management.
Who's fault is it that GM is the least favorite car company to do business with according to parts suppliers? The workers? No... management.
Who's fault is it that the Employee Pricing program was used, a program that sacrificed long-term sales for short-term sales? The workers? No... management.
GM's workers do a very good job assembling vehicles. The problem is with the parts they assemble. Well-assembled crap is still crap.
... and who's fault is it that GM chose to focus development on its SUV's and pickups in a time when people seem to not be wanting them as much? The management. Rick Wagoner seems to think that they should focus even more on SUV's and trucks simply because they're more profitable. Well, they're not more profitable if they don't sell well or are dropping in sales.
Instead of giving customers what they want, GM seems to be telling them what they want. That's not a good or sustainable way of doing business for any car company.
Where did all the people who wanted hybrid vehicles go? Here's a clue... it wasn't GM... because GM had nothing to offer them. And who's fault is it that GM didn't have any hybrid vehicles? The workers? No... once again, it's management.
Mark: To the best of my knowledge, there's quite a bit of turnover in top management jobs in pretty much every industry. I bet the average longevity of a vice president is much less than that of a factory line worker. Plus, layoffs aren't "punishment", so the question of who is at fault is irrelevant in this context. I do agree, however, that many corporate managers aren't very loyal to their shareholders.
Turnover, perhaps... but job elimination? I doubt it. Some companies have a very efficient management structure... and some do not.
As for layoffs it's not a question of "punishment" but one of who ultimately gets left holding the bag when the company is in tough times... tough times that are, in part, brought about by mistakes or poor decisions made by management.
Mark: Why should job elimination be a factor? It's individual people who could potentially be the victims of unfairness, not the job positions themselves. And when companies are doing poorly you often see executives fired left and right. Same with mergers.
Turnover is often a function of someone not wanting to stay in the job... but the job exists for someone else to do. Job elimination not only gets rid of someone, but also makes it so no one else can have the job.
Of course it's the people who are affected... but how much turnover in the executive corporate world is caused by "ladder climbing" and how much of it is "layoff"? I'm betting there's a lot more ladder-climbing than laying off going on.
Executives fired? Ha... not at GM. Delphi's CEO, at least, volunteered to forfeit his salary until the company is out of bankruptcy.