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PUBLISHING ALERT
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Yesterday, Human Rights Watch published a pretty damning report on the big bad folks at The Beast--aka Wal-Mart. Not surprisingly, the Bentonville Bullies come off as, well, not just bullies but lawbreakers...
“Wal-Mart workers have virtually no chance to organize because they’re up against unfair US labor laws and a giant company that will do just about anything to keep unions out,” said Carol Pier, senior researcher on labor rights and trade for Human Rights Watch. “That one-two punch devastates workers’ right to form and join unions.”
As the world’s largest company, Wal-Mart’s conduct is especially troubling. Wal-Mart had $351.14 billion in revenue and $11.3 billion in profits in the fiscal year ending January 2007. It is the largest private US employer, with more than 1.3 million US workers and close to 4,000 stores nationwide. None of those workers is represented by a union. Human Rights Watch found that this is no accident.
Human Rights Watch’s investigation revealed that, in most cases, Wal-Mart begins to indoctrinate workers and managers to oppose unions from the moment they are hired. Managers receive explicit instructions on keeping out unions, many of which are found in the company’s “Manager’s Toolbox,” a self-described guide to managers on “how to remain union free in the event union organizers choose your facility as their next target.”
You can read the rest of the report here
I've never liked government statistics that claim to measure the economy--particularly the Gross Domestic Product. GDP only tells you that stuff is being made--not who truly benefits from the growth in GDP. But, it is worth noting yesterday's news, from The New York Times, that not only is economic growth slower but, more important, for regular people, is the continued rise in prices. Now, rising prices--especially when we know wages are fumbling along--is bad news for workers.
Economic growth slowed to its weakest pace in four years during the first three months of 2007, underscoring how the persistent slump in the housing market continued to serve as a drag on the American economy.
In its first estimate of economic growth for the quarter, the Commerce Department said the nation’s gross domestic product, the most comprehensive measure of overall economic activity, expanded 1.3 percent for the quarter, barely over half the rate recorded in the final quarter of last year.
The abrupt slowdown was not enough to put a brake on inflation, however. The consumer price index most carefully monitored by the Federal Reserve, which excludes food and energy, rose 2.2 percent in the quarter, at an annual rate, above the Fed’s stated comfort ceiling.
This doesn't surprise anymore, does it? Even though it is obscene beyond belief.
After firing 3,400, Circuit City enriches CFO
By Michael Rapoport, Dow Jones NewswiresNEW YORK — Even as Circuit City Stores (CC) pushed 3,400 purportedly
overpaid employees out the door, the company went out of its way to
make the departure of its outgoing chief financial officer a lot more
pleasant.What Circuit City did for Michael Foss last week says a lot about the
haves-over-the-have-nots way executive compensation works.By leaving, Foss would have abandoned thousands of unvested stock
options. But Circuit City revised the terms of many of those options
to make sure he could still exercise them after leaving the company —
a move that would mean a profit of nearly $250,000 for Foss if he were
to cash them in today.
What's interesting is the tone of the article. It is pretty harsh on the company. Maybe it's just obvious too even the business press that normal people can't even bring themselves to soft-peddle these outrages anymore. There is hope,
The real story bubbling within the auto industry is not the news that Toyota vaulted over General Motors in worldwide auto sales. Rather, it's the growing ideological--not economic--drumbeat that is gathering targeting the livelihoods of tens of thousands of auto workers. And this is a direct attack against a decent standard of living for every worker. That means you!
The ideological assault goes something like this: American auto companies are in trouble. The trouble is caused by "generous" benefits paid to auto workers. Solution: cut those benefits to save the auto companies.
Yesterday's Wall Street Journal typified the rhetoric that I've been seeing for some time now, rhetoric that has picked up in the past few months and is certain to get even louder. In a piece on DaimlerChrysler, columnist Dennis Berman wrote:
Forget about making better cars. Or even about the rise of private equity. The best way to understand the sale of Chrysler Group is as blood sport between parent DaimlerChrylser and its North American unions.
Is DaimlerChrysler willing to get fully ruthless with its employees, in spite of its well-hewn image as loveable corporate citizen? The answer will make for some gripping theater in the months ahead. That is because this deal really is about persuading the company's unions to roll back their own health and pension benefits.
I want to explain why these attacks, by in large, are ideological, not economic, in nature. If they were economic, then, a whole other set of issues would be on the table beyond cutting rank-and-file workers pay, health care and pensions. Let's see how.
First, the real burden to auto companies is health care costs. If the auto executives and their counterparts actually dealt with the economics of health care--as opposed to ideology--they would wake up and be avid supporters for a single-payer health care plan. Enacted this year, such a plan would immediately lift off auto companies tens of billions of dollars--that's BILLIONS--in health care costs for current and, most notable, retired workers.
This is nothing new. Almost two years ago, I cited General Motors as the prime example of a company that should be arguing that single-payer health care is an economic necessity. Many others have made that point before and since. And, yet...these guys are unwilling to break from their ideological framework, even though the economics are unassailable.
Second, it is not rank-and-file workers pensions that are causing a financial problem for auto companies, or, for that matter, many other big companies. CEO pensions are the problem. I pointed this out last summer by highlighting a terrific article in the Wall Street Journal. Here are two snippets from that article:
Even as many reduce, freeze or eliminate pensions for workers -- complaining of the costs -- their executives are building up ever-bigger pensions, causing the companies' financial obligations for them to balloon.
Companies disclose little about any of this. But a Wall Street Journal analysis of corporate filings reveals that executive benefits are playing a large and hidden role in the declining health of America's pensions. Among the findings:
* Boosted by surging pay and rich formulas, executive pension obligations exceed $1 billion at some companies. Besides GM, they include General Electric Co. (a $3.5 billion liability); AT&T Inc. ($1.8 billion); Exxon Mobil Corp. and International Business Machines Corp. (about $1.3 billion each); and Bank of America Corp. and Pfizer Inc. (about $1.1 billion apiece).
* Benefits for executives now account for a significant share of pension obligations in the U.S., an average of 8% at the companies above. Sometimes a company's obligation for a single executive's pension approaches $100 million.
* These liabilities are largely hidden, because corporations don't distinguish them from overall pension obligations in their federal financial filings.
* As a result, the savings that companies make by curtailing pensions for regular retirees -- which have totaled billions of dollars in recent years -- can mask a rising cost of benefits for executives.
* Executive pensions, even when they won't be paid till years from now, drag down earnings today. And they do so in a way that's disproportionate to their size, because they aren't funded with dedicated assets.
And...
When General Motors cites retiree costs, the giant auto maker has a point: It owed nearly 700,000 U.S. workers and retirees pensions that totaled $87.8 billion at the end of last year.
But $95.3 billion had already been set aside to pay those benefits when due.
All of these assets are earning investment returns, which offset the pensions' expense. GM lost $10.6 billion in 2005. But deep as its losses have been, they would have been far worse without the more than $10 billion per year in investment income that the GM pension plan for the rank and file generates.
The pension plan for GM executives is another matter. Unfunded to the tune of $1.4 billion, it detracts from GM's bottom line each year.
To underscore: workers pensions are funded, CEO pensions are not.
More recently, I also pointed out the vast CEO pension riches now coming to light because of new disclosure rules. So, the obvious solution is to first cut CEO pay and pensions deeply. If you want economic solutions, to paraphrase Willie Sutton, go where the money is.
Third, as a matter of economics--and, to be fair, a tad of ideology--it's worth noting what auto workers "generous" pensions amount to: an average of $32,000 if you worked 30 years and retired. And that monthly payment by the company GOES DOWN once a worker begins to collect Social Security.
It's ironic that the ideologues are calling for cuts in auto worker pensions, of all places. After all, it was Henry Ford himself who used to say that he wanted to pay his workers enough money so they could buy Ford cars. Exactly how do the ideologues think retired auto workers, not to mention other workers, will be able to participate as consumers in the fall and winter of their lives if they are asked to live on less even as expenses like health care, rent and gas go up?
And that's where this all comes back to you. We all need to see the coming attack against auto workers as a direct attack on the ability of average people to make a fair wage and retire with dignity and respect. The attack against auto workers will be lead by the same voices who have fashioned a global economy with rules that enrich a few and impoverish the many; the same people who have created, in our country, the chasm between rich and poor and the obscene spectacle of CEO legalized robbery with very little resistance from our elected leaders.
Our response has to be very clear: The auto worker pension is not the "gold" standard. It is the decent and fair standard.
The inevitable ideological attacks against the UAW has begun. Just in time for the news that Toyota overtook General Motors in worldwide sales for the first time in history, the drumbeat has picked up in the pages of the business press: auto workers have to just buck it up and take the hit to save Chryslyer. Or so says Dennis Berman in The Wall Street Journal (subscribers only):
Forget about making better cars. Or even about the rise of private equity. The best way to understand the sale of Chrysler Group is as blood sport between parent DaimlerChrylser and its North American unions.
Is DaimlerChrysler willing to get fully ruthless with its employees, in spite of its well-hewn image as loveable corporate citizen? The answer will make for some gripping theater in the months ahead. That is because this deal really is about persuading the company's unions to roll back their own health and pension benefits.
Really, is that the deal? The truth is that that is not an economic statement but an ideological statement. And there is a difference. Ideology urges Berman to see the challenge through a particular prism where workers are the problem or, at least, their benefits are the problem dragging down the fortunes of Chrysler.
But, economics might actually lead one to a different conclusion. On health care, the economics would be solved overnight if Chrysler and the rest of the business community would park their moronic, blind ideology and support single-payer health care--which would, almost overnight, remove billions of dollars of costs from their bottom lines.
And as for pensions--many companies, like General Motors actually have large pension liabilities because of THEIR CEO PENSIONS, not rank-and-file workers' pensions, which are funded. One solution, then, is to first slash CEO pay and pensions first. That's economics...okay, with a bit of ideology mixed in.
I don't really find this story to be too credible.
UAW Group, Tracinda
Discuss Bids for ChryslerBy GINA CHON and JOHN D. STOLL
April 23, 2007
Representatives of billionaire investor Kirk Kerkorian's Tracinda Corp., which has proposed a $4.5 billion acquisition of DaimlerChrysler AG's Chrysler Group, met yesterday with United Auto Workers members who have separately proposed an employee-stock-ownership plan for Chrysler, according to people at the meeting.
The meeting, in Toledo, Ohio, produced no firm conclusions, but it represented a fresh twist in the intensifying contest for America's fourth-largest auto maker, a unit of the German industrial giant since 1999. It also underscored the influential position the UAW holds with potential bidders.
You can read the rest of the story at the subscription-only site of the Journal. Further in the story the reporters write that the UAW members are folks from Local 12. But, be real: this doesn't seem logical that a Local is going to make a bid for the company. As I mentioned some time ago, it's one thing to have a big piece of the company, which UAW workers already have because of the huge pension funds, but it's another thing all together to actually manage and run a company. It does show, however, how much the future management and health of this company is very much up in the air.
Catching up to this so you'all may know about this...busy weekend...From The Wall Street Journal yesterday:
Democrats Move Ahead
On Minimum-Wage RiseBy DAVID ROGERS
April 21, 2007; Page A3
WASHINGTON -- House and Senate Democrats reached agreement on a $4.8 billion package of business tax breaks that the party hopes will clear the way for a $2.10-an-hour increase in the federal minimum wage.
The wage increase, the first in almost a decade, has been a signature issue for the Democratic majority and would raise the hourly rate to $7.25 over the next two years in three 70-cent increments.
Both the House and Senate approved the increase soon after Democrats took over Congress in January. But to the party's growing embarrassment, the bill has been stalled because of differences over the level of business tax breaks, first added by the Senate to get past a Republican filibuster.
But not clear that this goes anywhere because it's gotten wrapped up in the Iraq occupation spending bill.
Count me as one person not shedding too many tears about the death of Helen Walton, the matriarch of the Walton family--she of the $16 billion net worth. After all, this family, worth tens of billions of dollars, has made live a living hell for thousands of workers. And just in time to mourn dear Helen, we learn that the company's own statistics show what a truly discriminatory workplace it runs. The following comes from WakeUpWalmart.com:
Today, Wal-Mart, the nation's largest private employer, released new diversity data which shows - once again- how far this company must go before it becomes a responsible employer. Even though 60.87 percent of Wal-Mart*s Associates were women in 2006, only 39.69 percent of Wal-Mart's managers were women, up only 0.89% over last year. At this rate of change, it will take Wal-Mart another 11.9 years for women to make up at least 50 percent of the managers in the company.
Amongst minority workers, the percentage of workers in management compared to the total workforce is equally poor. For example, even though minority workers at Wal-Mart comprised 33.15 percent of Wal-Mart's total work force, minorities comprised only 23.2 percent of its management. More specifically, even though African Americans comprise 17.50 percent of Wal-Mart*s workforce, African Americans represent only 11.39 percent of Wal-Mart*s management.
Again, based on Wal-Mart's own EEOC data, and in terms of Wal-Mart's management ranks, the percentages of women, African Americans, and Hispanics in Wal-Mart's management are far below the percentage of women, African Americans, and Hispanics in their total workforce.
Amazing how oblivious rich people can be.
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