Scene: Continuation of conversation between Jordan and JC, a long-time friend.  Conversation centers on themes for government policies following Revenge Revolution.  Jordan and JC have agreed to a deadline of this evening to complete the work.  When finished, Jordan will schedule a review with POTUS.  Conversation begins Entry #131.

Background: JC and Jordan concluded that the standard measure for future government policies should be ‘treat thy neighbor as thyself.’  This entry discussed whether the standard is appropriate for corporate policy.

JC:  “You know, Jordan, we’ve made real progress outlining how government policies should be developed.”

Jordan:  “Glad you think so, but what’s your point?”

JC:  “We shouldn’t rush this effort.  When we started, I suggested a short deadline so we would keep the conversation focused.”

Jordan:  “And now what?  I’d love to say probably changing her mind just like a woman but I know better.”

JC:  “Finally he has some brains.  But, yes, I am changing my mind…at least about the timing.”

Jordan:  “Want to delay the mock Oval Office broadcast?”

JC:  “Only for a couple of days.  We’ve made a lot more progress than I thought we would.”

Jordan:  “OK, let’s delay it.  But let’s also get started on the next topic, corporate policy.”

JC:  “You think linking government policy and corporate policy is smart, or even logical?”

Jordan:  “Not suggesting we make them the same.  Just that the standard measure for setting policy should be the same.”

JC:  “You mean using the standard, ‘treat thy neighbor as thyself.’  Right?”

Jordan:  “Right.  Ready to start?”

JC:  “Yes.  This could be a very long session.  And a very difficult policy to get support for.”

Jordan:  “Alright, pick a company that you think needs to adopt the standard of ‘treat thy neighbor as thyself.’  Any company come to mind?”

JC:  “Disney.”

Jordan:  “What’s wrong with Mickey and Minnie?  Or was the policy Goofy?  I couldn’t resist.”

JC:  “The policy was goofy because they turned Mickey and Minnie into real rats.”

Jordan:  “Enough of the bad jokes, already.  What’s the issue?”

JC:  “Disney fired a bunch of its tech staff, then had the gall to bring in workers from outside the US to replace them.”

Jordan:  “That’s bad but anything else?”

JC:  “Disney forces the former employees to train the new employees.  Can you imagine?  You’re fire.  Here’s your replacement.  Train ‘em.”

Jordan:  “Disney offer any rationale for replacing them?”

JC:  “What else from corporate America…cost savings?  Here’s my salute to you Disney.”

Jordan:  “Now that you’ve saluted how did Disney save money?  You said they brought in people from overseas.  Like shipped them here?”

JC:  “Yes, India to the US.  Not Indiana, India.  Plus, as I understand it, the replacements actually work for some employment contract agency, not Disney.”

Jordan:  “Disney’s rationale makes no sense.  Pay for transportation from India, then pay a fee to an employment agency.  How much could the workers be making and Disney still save any serious money??”

JC:  “You’re the financial guru.  You tell me.”

Jordan:  “Something smells in this deal.  The Indian workers must be paid next to nothing.  I hate to call it slave labor but that’s what it sounds like.  Otherwise the numbers don’t make any sense.”

JC:  “Where’s their ethics.  Excuse me, what a stupid question.  A CEO with ethics?”

Jordan:  “Now, now.”

JC:  “Now you see why I’m upset, especially with Disney?”

Jordan:  “Baffling to me why Disney would make such a move.  Financially, the savings have to be minor to non-existent when you start adding up all the costs.”

JC:  “Not sure what you mean…all the costs.”

Jordan:  “Remember when I ran that smallish electric vehicle company in California?”

JC:  “Some town in Sonoma County.  Right?”

Jordan:  “Yes.  When I joined the Board of Directors wanted to move all the production to China…to save cost.”

JC:  “Did you?”

Jordan:  “I told to give me 6-7 months to start a turnaround, then decide whether to move production to China.”

JC:  “So what happened?”

Jordan:  “Over 7 months we increased production by more than 500%.”

JC:  “You must have added a lot of equipment.  How much did that cost?”

Jordan:  “The only equipment we added was stuff we bought at Home Depot — a couple of push carts, some colored duct tape and assorted items.”

JC:  “Change employees or add a bunch of people?”

Jordan:  “The only new employees were in shipping department.  No changes to employees.  And for most employees English was a second language…often a distant second language.  Plus we had at least one and I think two guys on parole from prison.”

JC:  “Not what you call an ideal manufacturing workforce.”

Jordan:  “The difference was we created a real team.”

JC:  “How?”

Jordan:  “We observed and we listened to suggestions.  It’s not that complicated…if the management wants to work with the employees.  Notice I said work with.”

JC:  “So what about moving production to China to save money?”

Jordan:  “Let me tell what the difference in costs were.  At the end of the 7 months, production had increased so much we could have doubled the wages of the workers in California.  Two times.  If the production were in China we could have paid workers zero.  Even with doubling wages in California it was cheaper to make the product in California.”

JC:  “Huh?  Pay the US workers 2 times as much.  Pay the Chinese workers nothing…and still come out ahead?  Amazing.”

Jordan:  “Amazing is right.  But most people, in fact most companies, do not understand overall cost.  They just look at one part of cost, usually labor cost.”

JC:  “You think that’s what Disney did?  Just look at labor cost?”

Jordan:  “Yes.  And what makes the Disney decision even more baffling, and I would say borderline unethical, even possibly illegal…”

JC:  “This is getting more interesting than I expected.  Sorry…”

Jordan:  “…possibly illegal if the employees from India were brought in under an H1-B visa.”

JC:  “Pardon me.  What is an H1-B visa?  H1-B sounds like some kind of flu virus.  I need a break.”  (To be continued)

NYT article about Disney layoffs.  15 06 03 NYT Disney Layoffs

More about the origination of the blog and the author, Entry #1.

Ebook format of recent series of entries on Federal Budget.  15 05 23 Do They Really Understand Entries #121-#130