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~ USA Headed for a 5th Revolution! Why?

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Category Archives: Corporate Policy

#178 Manufacturing in the US. It’s Competitive and Rebuilds the Middle Class. (Part #2)

06 Wednesday Jan 2016

Posted by Jordan Abel in Corporate Policy, Innovative Thinking: Ideas and Products, Personal Stories, Societal Issues

≈ 1 Comment

First-time readers, this blog is set in the future (sometime after the year 2020).  Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution.  More about Revenge Revolution and author, Entry #1.  List and general description of entries to date.  Annual assessment whether Revolution plausible.

Note: most characters appear in a number of entries, with many entries building on previous conversations.  Profile of characters.  You’ll catch on quickly.  Thanks for your time and interest…and comments. 

Scene: Pilot Truck Stop, Central Illinois. Jordan having breakfast, sitting at the counter.  (Conversation started Entry #177.)

PilotLogoJordan: “The coffee is good. What an improvement from the old days at truck stops. Coffee was like used motor oil.”

Patron: “Some of us think the truck stops have wimped out. Too much like Starbucks fufu-coffee and not enough real-man coffee.”

Jordan: “OK, let’s get back to the topic at hand. Bringing manufacturing jobs back to America and especially mid-size and smaller communities. First question is ‘Are the workers trained for the higher-tech jobs?'”

middle_aged_man_by_asimplesongPatron: “Are the workers trained in Mexico or China? Not at first so somebody had to train them.”

Jordan: “What about the unions?”

Patron: “What about them?”

Jordan: “A lot of business people, mostly Republicans probably, claim that the unions killed manufacturing in America.”

Patron: “Another excuse by CEO’s and politicians. Most of those guys don’t know dog poop from apple butter about what goes on in manufacturing. Did these guys ever look at Germany? Lots of manufacturing, lots of exports…and very strong unions. What’s Turtleneckwrong with that model?”

Jordan: “Nothing, I guess. The education system in Germany has more emphasis on learning skilled trades.”

Patron: “Well, so did we…at least when I was growing up. In our high school we had an opportunity to take classes to become an apprentice plumber, electrician, metal worker, auto mechanic, etc. ”

Jordan: “Those courses are not available now?”

manufacturing-production-operations-jobsPatron: “Apparently someone or some bodies decided that having everyone get ready for college was more important than learning a skilled trade. So now there are no more of what we used to call ‘shop classes.’ And guess what? We’ve got a shortage of skilled trades and college grads driving cabs.”

Jordan: “Wonder if those same people ever correlated eliminating shop classes, as you called them, and the loss of manufacturing jobs?”

FartPatron: “Why would they? Those folks probably never cut anything in their life…except maybe a fart.”

Jordan: “That’s funny. Sad and true but funny.”

Patron: “You’re asking me all these questions. Whadda you think?”

Jordan: “I think you’re right…and let me tell you a story why I think you’re right.”

Patron: “Shoot.”

Jordan: “A few years ago I ran small manufacturing company in northern California – Sonoma County.”

122913_1337_14BringingU2.pngPatron: “I thought they only grew grapes and made wine there.”

Jordan: “Lots of agriculture. But this company manufactured…really assembled…electric bikes, electric scooters and some other stuff.”

Patron: “Sounds like a fun place. Why’d they want you? Just kidding.”

Jordan: “When I arrived, the company assembled an average of 37 scooters a day. The problem was some days it was 75 and some days is was zero.”

Assembly Line 2Patron: “So they hire you to fix the assembly line.”

Jordan: “The Board of Directors wanted me to move all the production to China right away.”

Patron: “Same old BS. Move to China because labor was cheaper, right?”

Jordan: “I told them to give me until the end of the year…about 7 months…to fix the problem. Then we could revisit whether to assemble in China.”

Patron: “What happened?”

Line chartJordan: “In the 7 months we increased production from 37 per day to 250 per day.”

Patron: “What’s that about 5 times…no 6 times more production each day.”

Jordan: “Yep.”

Patron: “What’d you do…buy a bunch of equipment?”

Jordan: “We bought virtually no equipment, other than some carts to move parts between stations.”

Patron: “Add a bunch of people?”

Jordan: “No the only people we added were in the shipping department.”

Patron: “What did you do?”

Listening.EarJordan: “Listened to the workers. We asked for ideas on what changes would make their jobs easier and improve product quality.”

Patron: “So you listen, make some changes to the product and the assembly line but keep the same number of people, the same equipment and production increases from 37 to 250 per day. That’s impressive.”

Jordan: “Here’s the kicker. Labor cost per unit dropped so much that we could have doubled the pay of workers in California…and paid workers in China nothing and…”

Patron: “…it would have been cheaper to build in California. Right?”

Jordan: “You got it right. Amazing, huh?”

People OrdinaryPatron: “One more question. What about the workforce? They must have been highly skilled.”

Jordan: “The workforce was a bunch of ordinary folks who lived in the area. For some English was a second language…a distant second language. We even had a couple of guys on parole from prison.”

Patron: “And you still made it all work? You’re a genius.”

Jordan: “Thanks for the compliment but all I did was listen to the people involved and then get resources to help them do their jobs better.”

Patron: “What happened to the company? Must have become very successful.”

Jordan: “Unfortunately some investors got greedy and…”

Patron: “…then moved production to China. And then the company filed for bankruptcy.”

Jordan: “You’re the genius.”

Patron: “No doubt some of the investors got their money out and left the regular investors and employees holding the bag. Makes me sick.”

Jordan: “Me, too. While it’s a sad ending, the good part of the story is there is hope for manufacturing in the US…and small town America.”

fife-drum%201Patron: “Maybe the Revenge Revolution will begin to change attitudes about the importance of manufacturing. And you need to tell your story.”

Jordan: “Thanks for the encouragement.”

Patron: “Listen, I need to run. By the way, I never did introduce myself. I’m Rich Johnson…but everyone call me Doughman. Cause I look like…”

Pillsbury-DoughboyJordan: “…the Pillsbury Doughboy?”

Patron: “Looked this way since grammar school.”

Jordan: “Doughman, I’m Jordan Abel.”

Patron: “Well, Mr. Abel, nice chatting with you. Good luck on helping bring manufacturing jobs back to the US.”

#177 What’s Causing Middle-Class America to Go Away? (Part 1)

02 Saturday Jan 2016

Posted by Jordan Abel in Causes of the Revolution, Corporate Policy, Societal Issues

≈ 8 Comments

First-time readers, this blog is set in the future (sometime after the year 2020).  Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution.  More about Revenge Revolution and author, Entry #1.  List and general description of entries to date.  Annual assessment whether Revolution plausible.

Note: most characters appear in a number of entries, with many entries building on previous conversations.  Profile of characters.  You’ll catch on quickly.  Thanks for your time and interest…and comments. 

Scene: Pilot Truck Stop, Central Illinois. Jordan having breakfast, sitting at the counter.

waitress-clipart-waitressWaitress to Jordan: “Coffee?”

Jordan: “Yes, please. Thanks.”

Waitress: “Ready when you are.”

Jordan: “Two eggs, over easy; hash browns, dark; English muffin, dry.”

Waitress: “Orange juice?”

Jordan: “Good idea.”

middle_aged_man_by_asimplesongPatron (Sitting next to Jordan): “Excuse me. Visiting?”

Jordan: “Yes. Wife’s family. Taking a break. My wife is with her mother and sisters. They won’t miss me. You visiting?”

Patron: “No. Live nearby. Come here for breakfast every now and then.”

Jordan: “You farm?”

Patron: “No. Retired now…but not by choice.”

TurtleneckJordan: “What happened?”

Patron: “Factory closed. We made axles for medium and heavy-duty trucks. You know the 18-wheelers. Then the owners moved all the production to Mexico and China.”

Jordan: “What’d you do at the plant?”

Patron: “Skilled trades – machinist.”

Jordan: “Why’d they move?”

BeanCounterPatron: “Supposedly cost. Some bean counter claimed it was too expensive to manufacture here compared to Mexico or China.”

Jordan: “Employees try to save their jobs?”

Patron: “Yeah, but the suits…I mean management really didn’t want to listen. They seemed to have everything lined up before we had a chance to try to save our jobs.”

man_in_suit_clip_art_22944Jordan: “Was management right? Costs lower in Mexico and China?”

Patron: “I’m no financial expert but here’s what I do know. The plant here made high-quality product. Turn-around time was short. And customers were very happy.”

Jordan: “What about now?”

Patron: “From what I hear turn-around times are much longer and customers are frustrated.”

Jordan: “You think they’ll bring the work back here?”

Patron: “Probably not. The plant is closed and management would rather keep the crow-clip-art-COLOR_CROWplant in Mexico than to have to eat crow and admit a mistake.”

Jordan: “What’s happened to the town?”

Patron: “You drove through it. It’s dying. The farmers are doing OK but there are few to no factory jobs. Middle-class America is dying.”

Jordan: “If you were president, what would you change to bring factory jobs back to America?”

Patron: “The tax laws. Look, I’ll gladly pay my fair share. But people who don’t really Money-clip-artproduce anything – you know, those cats on Wall Street and those guys that manage money…”

Jordan: “…the hedge fund managers?”

Patron: “That’s them. Those guys and the guys that get all those stock bonuses…they should pay a higher tax rate than guys like me. I mean what do those guys really bring to the table for all that money?”

Jordan: “What about CEO’s…you know, heads of companies?”

Patron: “”When I had a decent job, I didn’t much care what the big dogs made. We could afford a decent house, an OK car or two and even take a little vacation now and then.”

factory_07Jordan: “But then the plant closed.”

Patron: “You got it. The plant closes and I get screwed along with about 1,000 other people. Yet the CEO and his buddies make even more money. That does not seem fair.”

Jordan: “By the way, you OK talking about this? I don’t want to ruin your breakfast.”

Patron: “My breakfast has been ruined since the day they announced the plant would close. What’s one more ruined breakfast?”

Jordan: “Two questions. #1 is Do you think CEO salaries should be capped. Have some sort of limit? Say some multiple of the average worker.”

UnfairPatron: “You mean if the guy on the shop floor makes $50 grand per year, the CEO could only make 10x as much? So how much is that…$500 grand a year?”

Jordan: “That’s the idea. Some countries have such limits. The US does not.”

Patron: “I like that idea. The current system is unfair.  There ought to be some limit on those CEO’s and especially those guys on Wall Street. I’m still not sure what they do to deserve all that money.”

Jordan: “Second question. What political party did you vote for when you were working?”

dunce capsPatron: “Mostly Republican. You know this is small-town America.”

Jordan: “How about after the plant closed?”

Patron: “I hate to admit it because it sounds so stupid now. I voted Republican.”

Jordan: “Why do you think voting Republican was stupid?”

Patron: “Because I was voting against my own economic interest. Republicans were not for the little guy like me. Their policies favored the rich and screwed guys like me.”

Jordan: “But you voted for them anyway.”

Patron: “I told you it was stupid on my part. Then I eventually woke up.”

Jordan: “And joined the Revenge Revolution?”

abraham_lincoln_clip_art_15515Patron: “You bet. What the Republican leadership forgot is the Republican Party is the party of Lincoln. And what did Lincoln say about fooling people?”

Jordan: “You can fool some of the people all the time, and all the people some of the time, but you can’t fool all the people all the time.”

Patron: “We’d been fooled long enough so we said ‘no more Republicans.'”

Jordan: “You think Democrats will bring the jobs back?”

Patron: “What I know is the elected officials in DC need to start working together on policy changes to help bring jobs back to this country. Otherwise, all these smaller towns – and maybe some mid-size towns – are going to suffer a slow death. When middle-class America goes away, then what?”

Waitress: “More coffee, gentlemen?”

(Continued)

#164 VW: Throw the Bums Out!

10 Saturday Oct 2015

Posted by Jordan Abel in Corporate Policy, Gov't Policy, Societal Issues

≈ Leave a comment

First-time readers, this blog is set in the future (sometime after the year 2020).  Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution.  More about Revenge Revolution and the author, Entry #1.  List and general description of entries to date. 

Note: most characters appear in a number of entries, with many entries building on previous conversations.  Profile of characters.  You’ll catch on quickly.  Thanks for your time and interest…and comments. 

Scene: coffee shop near office. Jordan meets Matt, a reporter for a major newspaper. Matt interviewed Jordan for an earlier series of articles.  This entry a continuation of #163.

092615_2031_Characters11.pngMatt: “I know we agreed to talk about the book. But during the break a couple more questions about VW came to mind.”

Jordan: “OK, but not too many.”

Matt: “Just in case POTUS’ office might have called you for advice…this is all hypothetical of course…”

Jordan: “Of course.”

vwMatt: “…what would you have told POTUS after hearing the congressional testimony of VW’s head of US operations?”

Jordan: “You mean Michael Horn?”

Matt: “Yes, Mr. Horn.”

Jordan: “Did you ever listen to Car Talk on NPR with Tom and Ray Magliozzi?”

Matt: “All guys listened to Car Talk. Great show.”

TurtleneckJordan: “And what did Tom say when an answer was obviously wrong or farfetched?”

Matt: “B-o-o-o-o-o-gus.”

Jordan: “I think Mr. Horn’s explanation to the congressional committee qualifies as B-O-G-U-S.”

Matt: “Why so?”

Jordan: “Horn, excuse me Mr. Horn, claimed none of the senior management at VW knew about the software program override. Only a couple of rogue engineers were responsible.”

Matt: “What’s wrong with that explanation? GM said only a couple of mid-level engineers knew about the ignition switch design flaw.”

Jordan: “The ignition switch for GM…or any auto company…is what I would call a ‘non-issue’ part. I mean, what’s there to get excited about? Yes, and I know GM should have checked the specifications when the part was redesigned.”

Matt: “But the VW diesel program was much higher profile than some ignition switch. So there would have been more scrutiny. Right?”

Jordan: “VW bet the farm on its new diesel engine technology. VW claimed the new engine technology would meet all emissions standards worldwide without the supplemental spray system used by Mercedes and BMW.”

casino-1374303Matt: “See your point. If the company’s future is riding on making the diesel program successful, the program gets lots of attention and scrutiny.”

Jordan: “VW is a very top-down organization – not unusual for a German company. The chances that a few lower-level engineers initiated the emissions override program without approval from senior management is laughable. Even if they did initiate the solution, how would they hid it from others inside VW and from vendors? And tests at the proving grounds? Someone checked to make sure the override system kicked in when cars were tested for emissions in Europe and in the US. Just think about all the states that test for emissions. The override was designed to work with a range of equipment. And no one knew?”

Matt: “You really think the CEO knew about the software program?”

Jordan: “Here’s what I think. The CEO knew the new diesel engines did not meet emissions standards. And the CEO directed engineering to fix the problem. And this is what doesn’t pass the smell test, the CEO says to the engineers, in effect, ‘Fix the problem but don’t give me any details about the solution.'”

Matt: “The CEO might be technically right claiming he did not know the details.”

gangster-cartoon-clip-art-540pxJordan: “That’s like a mafia don, after telling Guido to take care of so-and-so, claiming he did not know what happened.”

Matt: “At some point, the CEO has to ask, ‘Is the problem fixed? And he asks the follow-up question, ‘Does the solution meet all emissions standards worldwide?”

Jordan: “If the answer is ‘yes, it meets all standards for testing,’ or similar words, then the CEO needs to ask, ‘What about standards while driving?'”

Matt: “It’s easy to be a Monday-morning quarterback and say, ‘you could have…’ or ‘you should have…’ Are you being fair? Are you being a Monday-morning quarterback?”

Jordan: “Matt, the questions I’m asking are so basic that anyone with a brain the size of a pea would ask them. As CEO you bet the future of the entire company on one technology and you expect us to believe you don’t probe to find out if it really works?”

Matt: “His answer doesn’t seem logical.”

money questionJordan: “Here’s another test of my rationale. Tonight tell your wife you are taking all the money out of the 401k’s and other accounts. Then you are going to Las Vegas and play poker because you have a new way beat the odds. Then see how many questions she asks.”

Matt: “I cannot imagine how many. Alright, a couple more questions, then we’ll talk about the book. VW said the fix could take a couple of years. Also, VW said it would not buy back any cars from existing owners. Thoughts?”

Jordan: “More chutzpah from VW. First comment – tell VW and the owners the cars cannot be registered in any state without the fix. Emissions are 40x the target level and a safety and environmental hazard.”

smoke-from-vehicles-clipart-i17Matt: “For VW diesels owners, not being able to register seems unfair.”

Jordan: “VW buys them a new car or provides a rental at no cost until their car meets emissions standards.”

Matt: “VW said it would not buy back any cars.”

Jordan: “What I said to POTUS…hypothetically, of course…was TS. VW knowingly broke the law. And not just one year but 3-4 years. The cars have 40x times allowable emissions. Get VW owners a new car or rental until the problem is fixed. Criminals do not get to make the rules.”

Matt: “I know emissions are a problem but people drive old cars with high emissions. What about your Miata? What about cars from the 1950’s and 1960’s?”

Jordan: “All those cars met emissions standards when introduced. Previous model year cars have always been grandfathered for safety and emissions standards. Beside the number of cars without emissions equipment is small…and owners don’t drive many miles.”

Matt: “Back to the really tough question – criminal intent. Do you charge the VW exec’s with a crime?”

jailJordan: “Absolutely. Some of the guys at the top need to go to jail. I cannot speak about the guilt of Mr. Horn. There were several layers of management above him and he was not calling the shots.”

Matt: “If the US guy is innocent, that means prosecuting through the EC or in German courts. What’s the likelihood of a conviction?”

Jordan: “VW exec’s need to feel real pain. Otherwise they will continue to give the finger to regulators in the US and Europe. My hypothetical suggestion to POTUS was initiate an all-out effort by DOJ, EPA and the state DA’s to bring the VW exec’s to trial. It needs to be a public trial. No plea bargaining. No consent decree with a fine. Make it as painful as possible.”

Matt: “What about saving the VW brand? All the dealers; all the customers and suppliers?”

Egg on FaceJordan: “Cleaning house at the top of VW and jail time for those involved is the only way to save the company.”

Matt: “As the old Brooklyn Dodger fans used to shout, ‘Throw the bums out.'”

(We’ll talk about Matt’s book the next session)

#163 VW Emissions Debacle

08 Thursday Oct 2015

Posted by Jordan Abel in Corporate Policy, General Motors, Gov't Policy, Societal Issues

≈ 1 Comment

First-time readers, this blog is set in the future (sometime after the year 2020).  Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution.  More about Revenge Revolution and the author, Entry #1.  List and general description of entries to date. 

Note: most characters appear in a number of entries, with many entries building on previous conversations.  Profile of characters.  You’ll catch on quickly.  Thanks for your time and interest…and comments. 

Scene: coffee shop near office. Jordan meets Matt, a reporter for a major newspaper. Matt interviewed Jordan for an earlier series of articles.

Jordan: “Matt, been a long time. Nice to see you.”

092615_2031_Characters11.pngMatt: “Nice to see you Jordan.”

Jordan: “Tell me about the book you’re working on.”

Matt: “That’s one of the reasons I called you. Before we talk about the book, I want to ask you about an issue that still troubles me…and that you can provide some insight.”

Jordan: “What’s that?”

Matt: “The VW emissions debacle – programming the software to rig the emissions tests. And I have it on good authority that someone in POTUS’ office called you for advice when it happened.”

021214_1242_24Resultsof1.gifJordan: “You know I can’t confirm whether anyone called, even though it’s a few years later. What I can tell you is what I would have told them if they had called.”

Matt: “OK, we’ll frame the conversation as a hypothetical. I’ll pretend I’m from POTUS’ office. Now, what’s your take on what really happened at VW?”

Jordan: “I only know what I read in the papers. But if what has been reported is anywhere close to the facts, the action by VW was the most blatant violation of federal auto laws by far. Nothing else comes close.”

Matt: “I know this might sound odd but what’s so blatant? Other companies have violated safety laws. VW’s violation was only emissions.”

vwJordan: “C’mon. Emissions are a safety issue…a safety issue for society. But the real difference is VW violated the laws knowingly. And from all indications, the violations were directed by senior management.”

Matt: “You really think senior management knew?”

Jordan: “If senior management didn’t know, they all should be fired. Probably should be fired anyway. I mean, the head of US operations – Horn, Michael Horn – was told at least two years before the public announcement.”

Matt: “So one of his underlings says, ‘Houston, we have a problem.’ And the top dog responds, ‘OK.'”

TurtleneckJordan: “Allegedly, Mr. Horn – great name for a car guy – never bothers to probe. Where were such questions as, ‘What is the problem?’; ‘How severe?’; ‘What are the consequences?’; ‘How long will it take to get fixed?’; ‘Were any EPA or NHTSA rules broken?’; ‘What will the fix cost?’; and a bunch of other obvious questions you’d expect from senior management.”

Matt: “As bad as VW’s violation was, they’re not the first. What’s different about VW than say GM’s failure of the ignition switch?

Jordan: “Fair question. I think two major differences. First GM was at fault for the design. No question. But the intent to defraud, if there was one, was confined to one or two people. I am not aware of any senior managers charged with fraud.”

GM-Ignition-recall-2014Matt: “Shouldn’t GM have caught the failure in testing or at least a potential problem during a review of the specifications?”

Jordan: “Yes. My understanding is the design engineer also signed off on the changes. No having an independent review was a mistake and a flaw in GM procedures.”

Matt: “What’s the second difference?”

Jordan: “People get upset when I explain – and claim – some of the deaths linked to the ignition switch failure can be attributed to driver behavior.”

Matt: “How so. Doesn’t seem right, but how so?”

Jordan: “You know enough about cars that if the power steering and power brakes…actually power-assisted steering and brakes…fail you can still maneuver and stop the car.”

Matt: “My grandfather had an old pick-up truck that he used to let me drive. The truck had manual steering and brakes. It was a bit harder to steer but not that much.”

Jordan: “Most of the deaths attributed the ignition switch were younger people so it’s doubtful the drivers had any experience, or even knowledge, of operating a car without power steering and brakes. Plus…”

Matt: “Plus what?”

seat_belt_required_signJordan: “Some of the drivers and occupants were not wearing seatbelts. Probably one out of every 5 or 6 people, maybe more.”

Matt: “Hadn’t thought about not wearing belts. Belts are operated mechanically and work whether or not the car has any power.”

Jordan: “Like I said, not a very popular observation. I’m not saying GM’s not at fault. Just that the effort to deceive was confined to a couple of people.”

Matt: “I know we could talk about problems at Toyota, the airbag supplier Takata but let’s go back to VW. What do you think the penalty should be?”

Jordan: “You mean, what did I tell POTUS’ office had they asked?”

Matt: “Yes, had they asked.”

Jordan: “At a minimum VW needs to fix the 11,000,000 diesel cars with the emissions override program. Then for customers who are dissatisfied with lower performance, lower mpg, or whatever, VW should buy back the cars.”

Matt: “At what price?”

Jordan: “Current list price. No allowance for depreciation. And maybe even some sales tax. People have to buy another car.”

Matt: “What about people who want to keep their VW?”

Jordan: “Some compensation for reduced value of the used car.”

Matt: “What about penalties?”

Money-clip-artJordan: “The potential fine in the US is something like $18, billion. That’s 18 and nine zeros. Not sure about Europe.”

Matt: “What about the government forcing VW to cease operations? At least stop selling in the US.”

Jordan: “Doing so might make some people feel good. But doing so makes the current owners SOL, as it were. If the market forces them out of business, OK. But the government should not.”

Matt: “No easy solutions. What about the VW executives?”

PrisonerJordan: “Someone or some bodies need some jail time. There was clear intent by VW management to defraud. Defraud government, consumers and the general public. The icing on the cake is VW sought Green Seal approval. Imagine, a Green Seal for a car that spewed out 40 times allowable emissions. What gall. Anything less than jail time would not be a deterrent for others.”

Matt: “Thanks for the briefing…just in case POTUS’ office asked for your opinion. Let’s get more coffee, then back to the book.”

#138 Corporate Behavior: Call Centers (#8 of Series)

27 Saturday Jun 2015

Posted by Jordan Abel in Corporate Policy, Gov't Policy, Innovative Thinking: Ideas and Products, Societal Issues

≈ Leave a comment

Scene: Continuation of conversation between Jordan and JC, a long-time friend.  Conversation started as deciding on a simple, understandable theme for government policies following Revenge Revolution.  Jordan and JC agreed to a one-day deadline to complete the work.  When finished, Jordan would schedule a review with POTUS.  Conversation begins Entry #131.

JC and Jordan concluded the standard measure for future government policies should be ‘treat thy neighbor as thyself.’  They also agreed to assess whether the standard is appropriate for corporate policy.  Disney was the first case.  GM the second case.”

Jordan:  “Now that we’ve given Disney the one-fingered salute…and put GM on double-secret probation…let’s address another corporate behavior that I do not understand.  Location of call centers.”

010414_1635_16TeachingS1.jpgJC: “…Why do these companies locate call centers in outside the United States?  Like the Philippines, Pakistan and India.  Why?”

Jordan:  “You know why.  Cost savings.  But do they really understand the impact on customers of foreign-based call centers?”

JC:  “Obviously you’ve called one of these places.  What was your experience?”

Jordan:  “Not very good.”

call center 2JC:  “Be honest.  How many times have you gotten a satisfactory answer quickly?  Forget the quickly part.  How many times have you gotten a satisfactory…maybe helpful is a better word…helpful answer?”

Jordan:  “Not very often.”

JC:  “Maybe never, right?”

Jordan:  “That’s pretty strong but not often.  But from the company’s thinking, locating outside the US saves boatloads of money.”

JC:  “I thought we reached the opposite conclusion for Disney.”

BeanCounterJordan:  “We did.  But the bean counters inside the companies seem to have the upper hand?”

JC:  “I understand there is nothing wrong with saving money.  But when you piss-off…excuse me, alienate customers, what real money do you save?”

Jordan:  “Well, lots of companies are locating these call centers outside the States so they must think it makes sense.”

JC:  “Let’s just think about the decision in the context of our standard measure for decisions, ‘treat thy neighbor as thyself’.”

TurtleneckJordan:  “OK, what’s your assessment?”

JC:  “First…and probably the biggest problem is differences in cultures.”

Jordan:  “In all fairness to the companies, the call centers are located in English-speaking countries.”

JC:  “Jordan, you’ve travelled outside the States a lot.  Outside of Canada, England is about as close to the US as it gets.”

Jordan:  “Agree.”

JC:  “Turn the situation around.  Do you understand the all cultural nuances when you are in say London or the Lake District?”

When-Yes-means-NoJordan:  “No.  I can’t even figure out some of the Southern culture in the US.  Like when ‘yes’ really means ‘no’ because they think they are being polite.  Just tell me ‘no’.  I’m not smart enough to figure it out.”

JC:  “You’ve made my point.”

Jordan:  “So if I can’t figure out some of the southernisms…whatever you call them…why should someone in say the Philippines understand the US culture?”

JC:  “I’m not blaming the person in the overseas call center.  Not their fault.”

Jordan:  “Agreed.  The person is looking for a job and probably trying their best.”

JC:  “The problem lies with the US companies who decided to move the call centers overseas.  Same question as before.  How much can they really save?”

Jordan:  “Probably not much, if anything, when all costs are included.”

Woman-Pulling-Hair-outJC:  “You mean like costs…or lost profits…because people are so angry at not getting help they quit buying the product.”

Jordan:  “That’s exactly what I mean.”

JC:  “So we ought to ask the CEO and his or her munchkins if they have ever used the call center to fix a problem.”

Jordan:  “You know the answer.”

JC:  “The answer is never.  One of the munchkins gets the problem fixed so the big dog CEO doesn’t have to waste precious time dealing with ‘those type people’.”

Jordan:  “I’ll give you a perfect example.  Here’s the scene: Detroit Metro airport.  Flight to Washington Reagan cancelled.  With the announcement the flight was cancelled, I immediately take out my OAG (Official Airline Guide) – this was pre-smart-phone era – and find a flight to Dulles that leaves in about 30 minutes.”

JC:  “I’m impressed.”

Jordan:  “Also in the waiting area is recently retired chairman of major company whom I met during my GM deer-in-headlights-1days.  He has the deer-in-headlights look so I grab him and walk him to the gate for Dulles.  We both get on.  While he had lots of miles flying, it had been on a company plane or accompanied by a corporate munchkin.  Now that he’s on his own he has no idea how the system works.”

JC:  “Was he grateful?”

Jordan:  “Very.  He was a gracious and polite man.”

JC:  “A gracious and polite CEO.  That’s nice to hear.”

Jordan:  “So lesson here is we need…”

JC:  “Pardon me, Jordan, but who is ‘we’?”

Jordan:  “Good question.  We…with ‘we’ being POTUS and staff…need to encourage companies to use the standard ‘treat thy neighbor as thyself’ for all decisions.  In his remarks, POTUS should direct the question to CEO’s and management of companies, ‘Are you making decisions based on the standard, ‘treat thy neighbor as thyself’?  POTUS should encourage the public to ask the same questions of companies.”

Public OpinionJC:  “Let public opinion sway company decisions.  It worked quickly for same-sex marriage and getting the Confederate battle flag out of many places.”

Jordan:  “Right.  But call centers don’t create the same emotion as same-sex marriage and bars-and-stars.”

JC:  “Then have POTUS push an emotional button, like ‘treat thy neighbor as thyself,’ and make the call centers an example.  Put call centers under the bigger umbrella.”

umbrella-clipart-Umbrella-Clip-art-9Jordan:  “Good idea.  The decision where to house call centers and many other business decisions are not really ones government should make.  But raising the question is fair game.”

JC:  “Will be interesting to see the reaction of the companies and the public…and what companies will get it and lead the change.  What’s the next topic?”

Jordan:  “Water.”

JC:  “Speaking of water.  I don’t need any.  I need to get rid of some.”

Jordan:  “OK, let’s take a break.”

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

#137 Corporate Behavior: GM Ignitiongate con’t (#7 in Series)

24 Wednesday Jun 2015

Posted by Jordan Abel in Causes of the Revolution, Corporate Policy, General Motors, Gov't Policy, Societal Issues

≈ Leave a comment

Scene: Continuation of conversation between Jordan and JC, a long-time friend.  Conversation started as deciding on a simple, understandable theme for government policies following Revenge Revolution.  Jordan and JC agreed to a one-day deadline to complete the work.  When finished, Jordan would schedule a review with POTUS.  Conversation begins Entry #131.

JC and Jordan concluded the standard measure for future government policies should be ‘treat thy neighbor as thyself.’  They also agreed to assess whether the standard is appropriate for corporate policy.  Disney was the first case.  GM the second case.”

JC:  “Whew.  I’m back and feel much better.”

Jordan:  “I needed a break, too.”

010414_1635_16TeachingS1.jpgJC:  “OK, back to the list.  Who’s on the list for being at fault in Ignitiongate?”

Jordan:  “We agreed on GM.  #2 could be the driver.”

JC:  “You implied that before the break.  That seems awfully cruel.”

Jordan:  “But what if the driver is under the influence of something – alcohol or drugs?  Remember during two seconds…one thousand one, one thousand two…a car going 60 miles per hour travels 176 feet.”

JC:  “More than half the length of a football field.  I remember.”

figure-thinking-hiJordan:  “So any kind of delay in reacting can have major consequences.  But I think there’s a third element that I’ve not heard anyone talk about.”

JC:  “And that is?”

Jordan:  “Driver education.”

JC:  “You mean good old driver’s ed classes?”

Jordan:  “Exactly.  How many students, especially those under say age 30-35, do you think were taught how to drive the car without power steering or power brakes?  How many students even know that you don’t need power steering or power brakes to operate the car safely?”

JC:  “Probably not many.  And from what I read many accidents after the ignition switch failed involved younger drivers.”

Ignition SwitchJordan:  “The cars with the faulty switch were smaller, lower-priced.  Drivers of these cars are generally younger.”

JC:  “So you’re saying GM’s at fault but others might be at fault as well, right?”

Jordan:  “If we assume that fault is split evenly among GM, drivers and driver’s ed, then merely pointing the finger at GM…or in your case giving the finger to GM…does not address a broader issue – personal responsibility.”

JC:  “How do you address the broader problem?”

TurtleneckJordan:  “Fining GM a huge amount of money might make some people feel good and it might change some behavior inside the company, but it doesn’t address the problem of driver responsibility and certainly not address the scope and quality of driver’s education classes.”

JC:  “Why isn’t GM fighting some of these cases in court?”

Jordan:  “Good question.  They likely have data that indicates some very irresponsible driving.”

JC:  “How would they get that kind of data?”

Jordan:  “You know your car has a black box, much like an airplane’s black box, right?”

black boxJC:  “Say what?  There’s a black box in my car that tracks my driving?”

Jordan:  “Yes, and black boxes have been around since the early 1990’s.  And there were two reason the boxes were installed: #1, safety.  The data were used to help analyze conditions prior to an accident.  #2, and less publicized, the data provided some defense against spurious law suits.”  (Article, 13 07 21 NYT re Black-Boxes in Cars)

JC:  “With all these data, you’d think GM would fight some of these cases.  Why aren’t they?”

Jordan:  “My guess is GM doesn’t want to tarnish their image.  Think about it.  GM clearly was to blame for the faulty ignition switch.  How would it look if they started to pin part of the blame on a driver, even if it’s more than justified?”

JC:  “I see what you mean.  It’s a no-win situation.  Go to court and fight and more media coverage about the faulty switch.  Then blame some or all of the accident on the driver and you look like a real a-hole.”

cowboy-clip-artJordan:  “And gun-slinging lawyers know the image dilemma for high-profile companies like GM.  So what do they do?”

JC:  “File a suit, even of the case is flimsy, because they know the company…GM in this case…likely will settle out of court to avoid tarnishing their image.”

Jordan:  “For GM, the case is a no-win.  For lawyers and the plaintiffs they corral, it’s no lose.  The case is on a contingency basis so plaintiffs have no cost.”

JC:  “Don’t doctors suffer from the same problem…spurious lawsuits?”

Jordan:  “Yes and just for the record, I agree that some, maybe even most of the plaintiffs deserve an award.  There are people injured through no fault of they own.  But, there are many cases…”

starbucksJC:  “…like the one against Starbucks.  The cop gets free coffee…free mind you…then doesn’t check if the lid is tight.  Spills coffee in his crotch and claims some kind of injury.  Except when the facts came out, the injury or condition, or whatever he claimed it was, existed prior to spilling the coffee.  Talk about ungrateful.”

Jordan:  “Fortunately Starbucks won the case.  But in cases with multiple claimants, like GM and the BP spill in the Gulf of Mexico, there are a number of people who file lawsuits who have absolutely no right to any damages.  In fact I know one of the BP plaintiffs who suffered not a single dollar loss yet claimed damages of something like $400,000.”

JC:  “Did he get paid?”

Jordan:  “You know, I never asked.  I was so infuriated with the idea of filing a claim that I never followed up.”

JC:  “Alright, let’s lay out a policy for the GM case based on the standard, ‘treat thy neighbor as thyself’.  What’s the policy?”

Jordan:  “First, GM is at fault.  Everyone agrees, even GM.  Some fine should be levied.  There might have been criminal activity with intentionally covering up the flaw and/or not reporting to NHTSA.”

NHTSA-1990sLogo_svgJC:  “What’s NHTSA?”

Jordan:  “National Highway Traffic Safety Administration.  Any safety related defect you have to report.  Apparently GM did not.  #2, GM should be liable for some of the injuries and deaths that occurred.  However, GM should not be responsible for injury or death where there was excessive speed and/or occupants unbelted.  GM cannot be held liable for irresponsible behavior by a driver or passenger.”

drivers-ed-cartoon2JC:  “What’s the third?”

Jordan:  “Driver education classes, whether private or in public schools, need to include a section of learning to operate the vehicle without power steering and without power brakes.  Make it part of the driver’s test.  You don’t want to take your first lesson in an emergency.”

JC:  “You think any of these changes will occur any time soon?”

Jordan:  “No, unless the public starts to demand them.  As an example of how disconnected some legislators are with reality, Republicans in the North Carolina senate wanted to eliminate all driver training in schools.  Turn age 15, take a test and get a permit with no training whatsoever.”

backwards-dayJC:  “What a back asswards way of thinking.  What happened?”

Jordan:  “The public forced them to drop the idea.  The legislator’s kind of thinking and lots of other issues helped precipitate the Revenge Revolution.  The public is still hungry for change.  This is an ideal time for these proposals.”

JC:  “One last thought.  Does GM deserve the one-fingered salute?”

Jordan:  “Not now.  Their screw-up with Ignitiongate was some years ago.  Management seems committed to improving.  Let’s give them a bit more time before you give the salute.”

call centerJC:  “I’ll wait.  What’s next on the agenda?”

Jordan:  “Call centers based in foreign countries…after we have something to eat.”

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

 

#136 Corporate Behavior: GM and Ignitiongate (#6 in Series)

20 Saturday Jun 2015

Posted by Jordan Abel in Causes of the Revolution, Corporate Policy, General Motors, Societal Issues

≈ Leave a comment

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.’  They also agreed to assess whether the standard is appropriate for corporate policy.  Disney was the first case.  GM the second case.”

JC:  “Ok, Jordan, now that I have beaten up Disney, I have a question for you.”

Jordan:  “Shoot.”

010414_1635_16TeachingS1.jpgJC:  “What about the behavior of your old employer.  I mean, General Motors really screwed up with that ignition switch failure.  Did they treat thy neighbor as thyself?  What do you think happened?”

Jordan:  “Your right, the General made some major mistakes, starting with a poorly designed ignition switch.  How that design passed any kind of durability testing is beyond me.”

JC:  “But what about those indictments?  US Justice Department found criminal wrongdoing…and some charges about wire fraud, which I did not understand.”  (Articles 15 05 22 NYT Justice Dept Finds Criminal Wrongdoing at GM, 15 06 10 US Weighs Charges Against GM)

TurtleneckJordan:  “The wire fraud charges…charges, not convictions…in my view were a circuitous way to bring criminal charges.  And more problematic.”

JC:  “OK, what about the cover-up of bad engineering?”

Jordan:  “Look, I have no inside knowledge of any of what happened – call it Ignitiongate.  I agree GM is at fault for the ignition switch that failed, but…”

JC:  “…but what else is there to the story?  GM releases a poorly designed switch and there’s a bunch of accidents and some people die.  What else is there?  Doesn’t GM deserve the one-fingered salute for bad behavior?”

Jordan:  “Probably…but I think there is more to the story.  If you can sit still for a few minutes, I want to walk you through some other issues that seem to have gotten little attention.”

Used Car royalty-free-car-salesman-clipart-illustration-443283JC:  “I’ll sit here as long as you don’t sound like some PR blowhard.  By the way, what makes you an expert?”

Jordan:  “You know I’m not an expert.  But I did spend a lot of time in product development and spend a lot of time dealing with dealers and customer issues.  Aside from that background, there seems to be a lot of common sense that has been overlooked.”

JC:  “OK, big boy, start your spiel.”

Jordan:  “You might not like my comments but here goes.  Yes, GM is at fault.  There is little question that the ignition switch failed.  And the failure rendered inoperative the power assist for steering and braking and the airbags.  But, my question, ‘Was GM entirely at fault?’”

JC:  “Isn’t that a rather harsh statement?  The driver’s didn’t doing anything wrong?  So all the fault has to lie with GM.”

steering_wheel_aJordan:  “I said GM was at fault for the poor design.  But I also think part of the fault lies elsewhere.  And here’s why I say that.  First some facts about the vehicle.  #1, power steering is not necessary to steer the car effectively, especially at higher speeds.  If the power assist for steering fails, you can still drive the car safely.  Takes a bit more effort but not much.  Power steering is mostly for parking.”

JC:  “Haven’t thought about that for a long time.  But I remember my dad had cars without any power steering.  My mom drove the cars…and she was no weightlifter.  She didn’t like to parallel park those cars but how many people do.  Next item.”

brake-2Jordan:  “#2, same type issue.  Power-assisted brakes are not necessary to slow or stop the car.  Without power assist, the stopping distance likely will increase but you can still stop the car.  Granted it takes more pressure on the pedal but brakes still function.  Besides stopping distance is not just brakes alone.  Other key factors are (a) vehicle speed; (b) driver reaction time; (c) road conditions; (d) amount of tread on the tires.  Remember your physics class?  Braking is a physics problem with several variables…and driver behavior being one of the most important.”

physics classJC:  “Physics class?  Yes, braking really overcomes the kinetic energy of the car.  And the formula for kinetic energy is…ok brain, dig deep…the formula, kinetic energy equals mass, or one-half mass times velocity?”

Jordan:  “You’re close.  I’m impressed.  Kinetic energy equals ½ mass times velocity squared.”

JC:  “I forgot about the squared part.  When you double miles per hour of the car, kinetic energy increases four times.  So speed is a big factor.”

Jordan:  “Along with driver reaction time.  In one second, a car going 60 mph travels 88 feet.  Two seconds, 176 feet.  That’s more than one-half a football field in just two seconds.”

figure-thinking-hiJC:  “Yikes.  Any kind of hesitation deciding what to do makes a huge difference.”

Jordan:  “Which leads to my third point, safety standards.  Cars and light trucks are subject to a plethora of safety standards.”

JC:  “What’s that mean?”

Jordan:  “It means that the front occupants must be able to withstand a frontal crash up to about 30 mph without serious injury.”

JC:  “Is what airbags are for?”

Jordan:  “Airbags are considered supplemental restraints.   You still have to wear your seatbelt.”

seat_belt_required_signJC:  “What if you don’t wear a seatbelt?  The airbag should give you enough protection, right?”

Jordan:  “No, you need the seatbelt.  You can skip the airbag but you can’t skip wearing a seatbelt.”

JC:  “I always wear my seatbelt but I thought the airbag was the key.”

Jordan: “Despite laws about using seatbelts, too many people think that way.  A seatbelt is more important than an airbag. Is that clear?”

JC: “I got it, already.  A seatbelt provides lots of protection even if the airbag doesn’t work.”

Jordan:  “Yes.”

GM,_logoJC:  “Now, where does leave us?  We still need to talk about who’s to blame?”

Jordan:  “We already know GM is at fault.  But let’s list some other candidates of where the fault might lie.”

JC:  “OK…but after we take a break.  Too much coffee.”

 

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

#135 Corporate Behavior: Disney Gets the One-Fingered Salute con’t (Part 5 of Series)

17 Wednesday Jun 2015

Posted by Jordan Abel in Causes of the Revolution, Corporate Policy, Societal Issues

≈ 1 Comment

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 is a continuation whether the standard is appropriate for corporate policy and uses behavior of Disney as an example. (Original article 15 06 03 NYT Disney Layoffs)

Note: June 16 Disney abruptly and with little explanation cancelled layoffs of 35 tech workers.  The cancellation is encouraging even though prompted by a public outcry following the first NYT article.  (NYT 15 06 16 Disney Cancels Tech Worker Layoffs).  This Blog Entry was written before Disney cancelled the layoffs.  I decided to retain the original wording as an example of how the public might react to behavior similar to Disney’s. 

JC:  “OK, time to get started again.  We were talking about behavior by Disney – the company, not Walt – and some visa virus.”

Jordan:  ”You mean the H1-B visa.”

010414_1635_16TeachingS1.jpgJC:  “That’s what I said.  Sounds like a virus.  And from the way Disney used the H1-B, it might be a virus.”

Jordan:  “H1-B is a visa classification that allows companies to bring to the United States high-tech workers when there are not enough Americans available to fill the jobs available.”

JC:  “Are these H1-B virus people mostly computer geeks?  Say for work at Apple, Microsoft, Google and the like?  Is that what they are?”

Jordan:  “H1-B jobs at those companies ae the most visible.  But Disney has some high-tech requirements.”

JC:  “I’ll buy that but Disney had a high-tech staff already working to meet those needs.”

TurtleneckJordan:  “You’re right.  American workers were filling those jobs at Disney.”

JC:  “So, now Disney hires foreign workers using a special visa because supposedly no American workers are available.  Right?”

Jordan:  “That’s my understanding.”

JC:  “Then Disney fires the workers who supposed weren’t there?  Right?”

Jordan:  “You’re two for two.”

JC:  “Is what Disney did legal?  I mean their actions seem exactly opposite of the intent of the visa.”

Jordan:  “I agree with you.  I’m 99% certain what they did was never intended when the legislation was drafted.  Their actions might be illegal but…”

PoliceJC:  “…but they did it anyway and no one is prosecuting them.  When is it going to stop?”

Jordan:  “Well, we had the Revenge Revolution so there is hope.  Let’s go back to our standard.  If we…societal we…begin to encourage companies to set policy based on ‘treat thy neighbor as thyself,’ would Disney still have imported workers from wherever it was, India, Pakistan?”

JC:  “Adding insult to injury, Disney effectively forces the existing tech workers to train the virus workers.”

Jordan:  “You mean the H1-B visa.”

virus_4-999pxJC:  “OK, visa.  But the H1-B has become a virus.  You know what galls me even more?”

Jordan:  “Hard to imagine.  What?”

JC:  “When a Disney shareholder…a shareholder mind you…asked the Disney CEO why they replaced the American workers, you know what the CEO said?”

Jordan:  “No.”

JC:  “We have not broken any laws.”

Jordan:  “That’s it?”

JC:  “There was some other mumbo jumbo that followed but all supporting the legal argument.”

Jordan:  “Any comments about ethics?”

JC:  “None.  The guy is a real a-hole.  Where’s Uncle Walt when you need him?”

sad-face4Jordan:  “Turned over in his grave, shedding a tear.  He can’t stand to watch.”

JC:  “See what I mean that h!-B is like a virus.  Makes me ill.”

Jordan:  “You’re right.  H1-B is more like a virus.  Whadda do when you have a virus?”

JC:  “Try to eradicate the cause.  It’s easy to blame Congress for now wording the legislation correctly.  But…”

Jordan:  “…but people have a responsibility to act ethically regardless of whether there is a legal loophole.”

JC:  “For example, would Mr. A-hole Disney CEO want his neighbor to treat him as he treated the Disney employees?  Unless, of course, he is just too stupid to understand.”

Jordan:  “Let’s not be too hard on Disney.”

JC:  “Why not?”

Jordan:  “I understand they offered the people who were terminationed another job elsewhere in Disney.”

JC:  “Well, pal, you got it wrong.  Disney offered them an opportunity to get another job in the company.  There was no guarantee of anything.  You nad I have that same opportunity.”

Jordan:  “Didn’t Diusney hire other people elsewhere in the company.  I understand there was a net gain in employment.”

JC:  “So what?  Disney would have hired those people anyway.  You sound like some Disney public relations talking head.”

Mickey-Mouse-fingerJordan:  “Calm down.”

JC:  “Look.  Bad behavior is bad behavior.  And Disney is guilty of very bad behavior.  Once again here’s a one-fingered salute to you Disney.”

#134 Corporate Behavior: One-Fingered Salute to Disney (Part 4 in Series)

10 Wednesday Jun 2015

Posted by Jordan Abel in Causes of the Revolution, Corporate Policy, Societal Issues

≈ Leave a comment

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 010414_1635_16StudentsL1.jpgshould 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.”

TurtleneckJordan:  “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.”

goofy006Jordan:  “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?”

Mickey-Mouse-fingerJC:  “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.”

122213_1351_10GurusIdea1.gifJordan:  “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?”

turn-aroundJordan:  “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?”

listening-joeJordan:  “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?”

PoliceJordan:  “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

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