Spared today for the first round

quote:

Originally posted by rega1:

The chairman CEO for Caterpillar is a PHd economist, not a PHd manufacturing engineer. He will cut again until the profit per share is where they announced to wall steet it will be this year.

rega1

And therein lies a BIG problem for an engineering based business. Having a souless accountant, sorry to forum members thus afflicted, at the top of an engineering business nearly always leads to little or no innovation. You do need them near the top, but not in the top job.

I hope that you can keep on keeping on at Cat and that the downturn does not finish the business off.

Jono

quote:

Originally posted by Jonathan Gorse:
Avole,

You make an interesting point re responsibility to workers as much as shareholders. I fear that when you look at companies like Microsoft which is slashing 5000 jobs after posting a profit of $4.17bn in the last quarter this prioritisation of shareholders has gone too far.

I can't help feeling that the reduction in union power has greatly weakened the job security and respect shown to employees and that is to the detriment of all of us below board level - which lets face it is most of us.

I have every sympathy with companies that are struggling to survive laying off workers, I have no sympathy for the likes of Microsoft.

Jonathan

First, the capital markets are what allowed one of the largest expansions of wealth to occur. Undermine people trust in investing, and you undermine the capital that allows small & large, union and non-union operations to thrive and prosper.

To vilify an entire industry is absurd and indicated that your likely don't fully understand the scope of the financial collapse. Bankers are not the only ones to blame. Someone had to sign the Alt-A mortgage agreement... Expanding the scope of Unions will certainly NOT help, as public company's will only react more severely to protect themselves from the impact of ideas such as the "employees Free Choice act".

While likely an unpopular view for the populist views of Britons, but when did personal responsibility no longer become important? Certainly someone working at Cat had nothing directly to do with the speculative debt issued on construction and development projects, that increased the demand for construction equipment and for mining equipment that mined the copper and iron ore, required to build all this expansion, or did they?

How many times did Cat raise its prices, expand production or add new production lines to meet the growing demand for product. How many people at Cat prospered as a result of this? Are you suggesting that unions step in and say that the peak level of production is the level that Cat is responsible for maintaining, or else they will strike?

quote:

Originally posted by rega1:

quote:

Originally posted by Phil Barry:
Avole,

I think shareholders have gotten screwed, too. Top management in most companies takes care of itself and no one else.

Regards.

PhilB

You are right in a way and here is what was told to me.

Friday after the cuts we all headed to the pub after work to celebrate those who retired and took the "voulunyary separation plan", and also tried to make sense of the those who were "involuntary laid off". Those involuntary folks will get a package of some sort, but not as nice as the voluntary one.

One person some summed it up when he said "it comes down to earnings per share" If we are slightly profitable and stay afloat and keep workers on so when the economy picks up we can ramp up production, that is not good enough. We need to profit / earn so much per share or the stock holdrs sell and the companies net worth drops.

The chairman CEO for Caterpillar is a PHd economist, not a PHd manufacturing engineer. He will cut again until the profit per share is where they announced to wall steet it will be this year.

Not my explanation, some one elses, but it makes sense I suppose.

rega1

When they did the cuts, was it line elimination or shift reductions?

My point is that the financial markets are to blame for expecting companies to grow profits year in year out which just isn't sustainable. This (as in the case of Microsoft) forces the company to over-react to a downturn in profit by slashing the costs that are easiest to slash i.e. staff. There is also of course also the issue that such influence by the financial markets causes companies to focus on short term profit improvement rather than longer term strategic innovation.

I realise the importance of capital markets to corporate enterprise, but as in the recent example of Barclays which is a very profitable enterprise their share price collapsed because the markets took a view that there was a fast buck to be made by trading out of the stock and back in again when as expected it fell. I don't feel that this kind of short selling behaviour is helpful at all for companies, their management, staff or anyone else keen to see the business prosper over the longer term.

Re: union power I do feel that the balance of power has reversed too much. Where there is strong unionisation historically the union has been able to negotiate better severence packages for staff, reduce the number of heads to go and encourage the company to offer alternatives such as part time working rather than layoffs. My own union the British Airline Pilots Association has effectively done so many times. Of course many of us join the union not just for pay and benefits protection but in case anything ever goes wrong and you find yourself in a jail cell in Bangalore!

I have a feeling that there are different views on both sides of the Atlantic on this. I am constantly horrified by the lack of paid holidays in the USA for example - 2 weeks a year is my understanding. In Europe it's customary to work shorter hours, have more paid leave (about 28 days plus 9 bank holidays is 'normal') and frankly whilst this might not benefit the capitalists, for the great majority the European approach gives you a better quality of life measured in terms of more leisure time, more time with your loved ones etc.

In summary my point is that I accept the need for capitalism but it must be controlled from running rampant, otherwise we'll be sending children to work at age ten again for 6 days a week.

Jonathan

quote:

Originally posted by Adam Meredith:
The potential and proper acceptance of shame strikes me as part of the "stick" encouraging us toward honourable behaviour.

While sipping margaritas in the Bahamas? The impending deflation will make the experience all the more sweeter for them.

Andrew Randle