Tuesday, October 27, 2015
Cummins Slashing 2,000 Jobs
One of Indiana's leading manufacturing companies, Cummins, has announced it will slash its workforce by 2,000 employees before the end of the year because of a slowdown in global sales in an effort to save $160 to $200 million. The company employs nearly 8,000 Hoosiers. Cummins is currently building a new $30 million corporate headquarters in downtown Indianapolis where city officials donated land valued at $4.3 million and is offering the company a ten-year tax abatement. It's unclear where those planned layoffs will take place since Cummins' employees are scattered throughout several states and countries around the world. This may be a sure sign that the economic downturn hitting other parts of the world is now hitting home.
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I think it means that amoral corporations engaged in uncalled for social engineering get distracted easily and that job losses ought to begin at the top of that mess and run thru all of those who took their eyes off the ball. The ROI on their Indianapolis endeavor also does not look to be positive and could easily be suspended if that were the case.
I'm far from a socialist, but why do companies get to fire workers to preserve profits? In exchange for corporate legal personhood, corporations should be required to create jobs, and if anything is left, then take profits.
Workers shouldn't be exposed to the same risks as the speculators who own the company.
My understanding from comments on several Wall Street boards is that these are predominantly professional roles and many, but not all, will be in Indiana. I have no way of knowing how accurate this is.
2,000 people will be axed little less who perished from the Titanic. “We are taking difficult but necessary actions to lower costs in the face of weak demand in many of our markets.” said Tom Linebarger, chairman and chief executive officer, Cummins Inc.
Will Mr. Linebarger and the Cummins Leadership team go down with the ship too (laid off), or keep their jobs??
I wonder how many of those jobs could be saved if they halted construction on that giant new headquarters building where MSA used to be, you know the one near the new location for bums to hang out?
Linebarger's #1 job is to ensure that Cummins didn't suffer from "weak demand." They did. Linebarger failed. He should be the first to get canned.
I suspect sales in China are a leading culprit of the downturn. You can't blame the CEO of Cummins for China's lousy economy. Caterpillar's sales are tanking as well.
Sure, I can blame Linebarger for foolishly depending on a speculative market.
If you're going to do that, take out an insurance policy to cover the employee's salaries you're putting at risk.
Employees aren't speculators and don't receive speculator's windfalls. It's unacceptable for employees to get mere wages while suffering the risks if speculations fail.
Long read, but overrewarding CEOs for being lucky enough to be crappy is really a result of going off the gold standard and the end of Bretton Woods.
http://www.forbes.com/sites/louiswoodhill/2013/03/28/the-mystery-of-income-inequality-broken-down-to-one-simple-chart/
Short version: Federal Reserve has overly financialized (stock buybacks, CEO pay, mergers) US economy since that is sadly the best return on a depreciating currency.
anon 933 it is because of the shareholders. When you buy stock in a company you expect some sort of return on your money. I work for a publicly traded company, I worked for them when they weren't too, and it is very different company. If the board of directors at these companies are worth anything they keep a leash on the leadership.
Anon 9:33, Anon 3:44: While many will agree that some CEO compensation seems excessive; it's the responsibility of owners / shareholders. Your suggestions of employer guaranteed "security" & job creation are patently socialist / statist; inorganic. It's called risk. If employees have a worthwhile career with a viable company; they should buy stock & vest themselves as owners. If they don't have confidence in their employer they should go elsewhere or start a company & compete.
Unless those employees own stock (by which their risk is proportional to ownership, exposure); they're otherwise not exposed to the same risks as those who do own the company & expect a return. The "speculator" critique is used by those unwilling to take such risks.
Cummins social experi-mental BS is a symptom of distraction or disconnect from the purpose of their business; making a profit for owners / shareholders which is a good thing. Corporations aren't coddle clubs anymore than government can be.
PB:Anon 9:33, Anon 3:44: While many will agree that some CEO compensation seems excessive; it's the responsibility of owners / shareholders.
Wrong. Excessive compensation should be paid to the employees or put into growing the company. Jesse Ventura recently gave public airing of an idea I’ve long held: the maximum wage. If compensation due the employees wasn’t being stolen by overpaid executives, the employees would have greater job security.
PB:Your suggestions of employer guaranteed "security" & job creation are patently socialist / statist; inorganic. It's called risk.
Risk is something only the owners should experience. Your idiotic excesses are not capitalistic and are going to do irreparable harm to the Republican Party. When capitalism was conceived, corporations and fictitious legal personhoods did not exist. Capitalism consisted of individual merchants who toiled for themselves.
If you want to start your own farm or bookkeeping office, you’re free to make as much money as you want in exchange for your services. When you hire employees, however, you take on a responsibility to the employee. Employees do not share in your personal gains, nor should they share in any risk. Employees are not owners.
PB:If employees have a worthwhile career with a viable company; they should buy stock & vest themselves as owners.
Ridiculous. Employees are not owners. An employee has an obligation to perform a service for certain hours, not to become an owner of the company.
PB:If they don't have confidence in their employer they should go elsewhere or start a company & compete.
Utterly insane, and this idiotic license of excess will strip support from the Republicans. An employee is not supposed to be an expert on the company’s finances.
If a company can’t afford to keep an employee, it shouldn’t hire an employee. A company should not be able to gamble on its fortunes, using the lives of others as poker chips.
It’s also utterly idiotic to expect a metallurgist to start a diesel engine manufacturing corporation because he’s unsure of his job security through corporate officer mismanagement.
PB: Unless those employees own stock (by which their risk is proportional to ownership, exposure); they're otherwise not exposed to the same risks as those who do own the company & expect a return.
Correct. They don’t expect a return. They expect a wage and a steady job. The returns, if any, are for the owners.
PB: The "speculator" critique is used by those unwilling to take such risks.
Correct. Entrepreneurs take risks. Employees take positions.
PB: Cummins social experi-mental BS is a symptom of distraction or disconnect from the purpose of their business; making a profit for owners / shareholders which is a good thing.
Only if they take care of first things, first. Cummins’ responsibility to its employees supersedes its rights to profits.
PB: Corporations aren't coddle clubs anymore than government can be.
You gravely misunderstand work. There’s no “coddling,” and you make a fool of yourself for saying that. Workers are expected to perform a quality service for their wages. Expecting their job to remain from year to year is not in any way “coddling.”
The Populists have left the Republican Party. If you want to win anything and remain viable for coming decades, the Republicans are going to have to drop the greed capitalism that treats humans with all the moral consideration one gives to gasoline in the tank.
[financial] Risk is something only the owners should experience.
Anon9:51, if I am correct, your argument is that owners are in a better position to manage financial risk than employees because they have more human capital, information, etc. I can agree with this to a limited point. You take the argument further & would expect, then, owners to internalize this financial risk. I believe that the basis of such an argument boils down to this: The party with more ability to control a given risk should be the one to bear said risk.
Assuming this is true, would you also agree, then, that schemes that force other types of risk onto owners (FICA, FUTA, workers' comp) should be abolished? After all, if owners should be forced to internalize all financial risk because of their increased ability to manage such risk, then risks that employees are better able to plan for and control should be internalized by employees. For example, an employee is more privy to his personal financial position, spouse's earnings, and debt levels than is the employer; it would seem that requiring the employer to pay FICA (thereby assuming some of the risk that the worker won't plan for retirement) is antithetical to the principle stated above.
Anon 9:51: Your responses are notional, inorganic, statist / marxist tripe. Companies vary in employee relations; because they're all unique / different. Generally, those who treat their employees better will enjoy reciprocal loyalties. There is no right of an employee to mortgage their employer for year to year job security- that isn't the mission or purpose of a free market enterprise. Pursuit of profit isn't cruel, it's fundamental to the purpose of an enterprise. Republican party, are you kidding- what republican party?
2k jobs eliminated here, 1k there, a few more hundred thousands cut around the USA and we're talking about people lives here!
But green shoots are sprouting, the economy is recover... umm... new jobs... flourishi... no wait... shipping containers are going back to China empty at record levels.... growth is at -0.4 percent...
who are the politicians trying to kid? There's a train wreck coming that will make 2008 look good, maybe even the crash of '29.
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