Family and Friends Plan-Work less, Make Less, Care Less

Back on December 11, in my post Lousy Economy deserves a French Riviera Vacation I had written that "With companies continuing to cut labor, it is just a matter of time before alternatives like shorter workweeks and work without benefits become attractive options when faced with the option of no work. Perhaps people will work less, earn less, and be happier..... The one complication is the standard of living, or the ability to afford certain lifestyles."

Today, the NYT carried an article titled "More Companies Are Cutting Labor Costs Without Layoffs" which states that "A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor. And in some cases, workers are even buying in. Witness the unusual suggestion made in early December by the chairman of the faculty senate at Brandeis University, who proposed that the school’s 300 professors and instructors give up 1 percent of their pay. “What we are doing is a symbolic gesture that has real consequences — it can save a few jobs,” said William Flesch, the senate chairman and an English professor.......The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics....In San Francisco, a Web design firm called Hot Studio laid off a handful of workers when the dot-com bubble burst in 2000. But the company’s owner, Maria Guidice, said the tactic was painful, and she did not want to repeat it. This time, her first step is to take away bonuses — for the first time in the company’s 12-year history — and instead give people paid time off over the holidays. “In 2000, it was like ‘cut the heads,’ ” she said of the ethos of the era. This time, she says, it feels different. “Our No. 1 priority is to keep people employed and to do that we’re going to bank the money and keep it for when we need it,” she said, adding, “I know some people are super bummed, but they understand we’re trying to keep the work force intact.” Several employees at Hot Studio said they did not mind the policy, particularly as they have heard of layoffs elsewhere in the economy. “People feel they’d much rather have a job in six months than get a bonus right now,” said Jon Littell, a Web designer......"

While I have seen this coming, being right does not make it less painful!

Labour force is truly "laboring"

The Labor department reported on Friday that 533,000 jobs were lost last month, bringing total job losses so far this year to 1.91 million. The unemployment rate rose to 6.7 percent, the highest level since 1993. The Labor department massages these numbers. Further, it stands to reason that a number of people have given up looking for a job (so they are not counted among the unemployed), and some folks don't want to admit they are unemployed- might report that they are 'consultants.' The net effect is that the government reported numbers are on the low side- the real unemployment numbers are likely to be much higher.

Some of the impacts of the high unemployment-

• Lower tax revenues- all governors and mayors are lining up for Obama's largesse- a major redistrbution of wealth.
• Lower consumer spending
• Lower savings

But another significant area of concern is health-care. An insightful article in the NYT,
"When a Job Disappears, So Does the Health Care" reveals the painful story of two women. "As jobless numbers reach levels not seen in 25 years, another crisis is unfolding for millions of people who lost their health insurance along with their jobs, joining the ranks of the uninsured. The crisis is on display here. Starla D. Darling, 27, was pregnant when she learned that her insurance coverage was about to end. She rushed to the hospital, took a medication to induce labor and then had an emergency Caesarean section, in the hope that her Blue Cross and Blue Shield plan would pay for the delivery. Wendy R. Carter, 41, who recently lost her job and her health benefits, is struggling to pay $12,942 in bills for a partial hysterectomy at a local hospital. Her daughter, Betsy A. Carter, 19, has pain in her lower right jaw, where a wisdom tooth is growing in. But she has not seen a dentist because she has no health insurance. Ms. Darling and Wendy Carter are among 275 people who worked at an Archway cookie factory here in north central Ohio. The company provided excellent health benefits. But the plant shut down abruptly this fall, leaving workers without coverage, like millions of people battered by the worst economic crisis since the Depression. About 10.3 million Americans were unemployed in November, according to the Bureau of Labor Statistics. The number of unemployed has increased by 2.8 million, or 36 percent, since January of this year, and by 4.3 million, or 71 percent, since January 2001. Most people are covered through the workplace, so when they lose their jobs, they lose their health benefits. On average, for each jobless worker who has lost insurance, at least one child or spouse covered under the same policy has also lost protection, public health experts said. Expanding access to health insurance, with federal subsidies, was a priority for President-elect Barack Obama and the new Democratic Congress. The increase in the ranks of the uninsured, including middle-class families with strong ties to the work force, adds urgency to their efforts...."

Welcome to privatized health care, or as Bush put it, the "ownership society" where everyone can "own" her health-care, like owning her house. How many millions do people like Fuld (Lehman), O'Neill (Merrill), Prince (Citi), and others loot from the public, while the poor people who work hard are thrown overboard and are eaten by the health-care sharks (drug companies, insurance companies, and others)?
Of course, given that Bush was elected twice and McCain/Palin got more than 45% of the vote, a big chunk of the public is getting what it asked for.

"All American" Socialism-Style Bail-Outs

The American International Group Story, reported in the NYT.
Extracts:
The American International Group said on Monday that it lost almost $25 billion in the third quarter and had secured a new $150 billion government assistance package intended to stem the bleeding from its complex financial contracts. Originally, the Federal Reserve rushed in with an $85 billion line of credit. When that proved inadequate, the Fed added a $38 billion supplementary lending facility, and A.I.G. recently qualified to sell $21 billion of commercial paper to the Fed.The new assistance package reduces the original $85 billion loan to about $60 billion, lowers the interest rate and gives A.I.G. five years, instead of two, to pay it off. The government will also use money from its Troubled Asset Relief Program to buy $40 billion of preferred shares in A.I.G. Another important feature will be government investments of about $50 billion to create special-purpose entities to relieve the company of its most tainted assets. About $30 billion of the government money will be used to buy complex debt securities that were insured by A.I.G. and about $20 billion more will be used to buy securities backed by home loans. A.I.G.’s counterparties — financial institutions in the United States and Europe — have not borne significant losses on the financial contracts that led A.I.G. to the brink, and the new program suggests they will not. “We’re funding somebody on the other side” of A.I.G.’s derivatives contracts, said Lynn E. Turner, a former chief accountant with the Securities and Exchange Commission who has been critical of the way the insurer’s crisis has been handled. Even though a large amount of public money is being extended, neither A.I.G. nor the federal government has been willing to provide the names of the company’s biggest counterparties, or their amount of exposure. “We’ve had way too many things here that nobody knows anything about,” said Mr. Turner, who is on the Treasury’s Advisory Committee on the Auditing Profession. “That’s why no one has faith in the capital markets.”

This hand-out is rushed out to the egregious AIG managers and shareholders while hardworking folks who acted "foolishly" and did not take out the 0% down no doc loans are now paying for their "sensibility."

American Express to Be Bank Holding Company (NYT)

Extracts:
American Express, the nation’s last big independent credit card company, said late Monday that it would transform into a bank holding company to strengthen its position in the market turmoil. Federal Reserve banking regulators said they approved its application because of the “unusual and exigent circumstances” roiling financial markets and the company’s interest in tapping up to $3.8 billion in government money. As a full-fledged bank, American Express would gain greater access to the Treasury Department’s bailout plan for banks, a move that might allow it to lend more freely and perhaps acquire a larger deposit-taking institution.

Everyone who is anyone is rushing to get the loot from Helicopter Ben and his piggy bank, the Fed.

Now, to the all-important jobs situation

Circuit City Short-Circuited:

Circuit City Stores Inc. filed for bankruptcy protection Monday. It said it cut 700 more jobs at its Richmond, Va., headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

DHL grounded

Delivery company DHL, hit by heavy losses and fierce competition, is significantly reducing its air and ground operations in the U.S. and cutting 9,500 American jobs, leaving rivals like FedEx, UPS and the U.S. Postal Service to fight over the customers it will stop serving.

Nortel Hangs-up

Canadian telecommunications equipment maker Nortel Networks Corp. posted a third-quarter loss Monday, reversing a year-ago profit as the economic turmoil and a large goodwill impairment charge weighed on results.The struggling company also announced a new round of job cuts, saying it plans to eliminate about 1,300 positions starting this year and ending in 2009.

An Eventful Day..Hopefully not A Remorseful Day

The Remorseful Day...one of the suspenseful Morse stories of Colin Dexter, with the brilliant (late) John Thaw.
Mr. Thaw, my eternal gratitude for the wonderful thought provoking entertainment you have given us for decades.

On to events of the day - The Ben Bank lowered the Funds rate to 1%, which is where Easy Alan (Greenspan) kept it for a long time! Ben also hinted that further cuts are to come.
Sen. Obama did his 30 minute show today, and sold tickets for the big get-together on Nov. 4th in Grant Park. The tix were sold out in a matter of hours.

While the Fed rate cuts, while expected, are depressing, the McPain campaign is cutting deeply into the mind and soul of any thinking person. The allegations brought out today-
Obama is getting money from "nefarious" sources - unaccounted-for credit card donations.
Obama is palling around with PLO
Obama is a child-killer because he does not oppose "all" abortions
Obama is a socialist
Obama is a Marxist
and Finally Obama is Not Ready Yet.

Clearly McPain is coming apart at the seams...better packaging is needed to hold this slime together.

Talking about packaging, McDonald's is giving its containers a new look.

According to the Tribune, "Tenneco Inc., citing the "worsening industry downturn" afflicting its auto-maker customers, disclosed restructuring plans Wednesday that will eliminate about 1,100 workers' jobs and generate up to $60 million in charges. The Lake Forest maker of automotive components and systems has been hard hit by the global weakening of the auto sector, and earlier this year it cut 1,150 jobs. The new round of cuts -- which calls for the closure of five U.S production-related facilities and certain other cost-cutting actions, is expected to reduce annual costs by $64 million once it's completed, Tenneco said."

Gannett Co., the nation's largest newspaper publisher, said Tuesday it will lay off another 10 percent of the work force in its local newspapers division as advertising revenue continues to plummet during the economic downturn. The latest reductions, to come by early December, follow a 10 percent cut announced in August. Neither round affects USA Today.

Appliance maker Whirlpool announced that it plans to cut work force by 5,000 by end of 2009.

Time to elect a smart person to manage the country- otherwise the country moves one step closer to a mass social unrest...

Flattened by Xerox, knocked out by Merck, Genie's out of Genie,

This is a follow-up to yesterday's piece, "Goldman 'Sacks,' eBay bids audieu, Tellabs 'disconnects' - But well-oiled McD is heating up."

Xerox Corp. plans to cut 3,000 jobs, or 5 percent of its work force, because a slowdown in orders from large U.S. companies has dragged down the printer and copier maker's profit margins.

The once-hallowed firm Merck and Co. has announced that it plans to reduce its workforce by 12%, which means that 7,200 people will be let go. The industry has shed about 100,000 jobs in the last five years, according to Viren Mehta, founder of Mehta Partners, a strategic and investment advisory firm that focuses on the pharmaceutical industry.(NYT).

Genie Industries has laid off another 375 employees in the second round of job cuts in less than four months. The company, which makes aerial lifts, platforms and light towers, said Wednesday that it was being hurt by the global economic slowdown and the near-freeze in the credit markets. That has limited its customers' ability to order new equipment. Genie said the cuts represent about 18 percent of its work force in Redmond, which had about 2,400 production and office workers. It also has cut about 100 jobs at its Moses Lake plant, where it had about 650 employees. In July, Genie's parent company, Terex Corp., laid off 120 full-time workers and an undisclosed number of part-time workers in its aerial platforms division.

Telecommunications equipment maker ADC expects to cut between 300 and 350 jobs, or about 3 percent of its total work force. It said in a statement that it expects most of the planned cuts to take place in North America.

Goldman 'Sacks,' eBay bids audieu, Tellabs 'disconnects' - But well-oiled McD is heating up

Oh yeah life goes on
Long after the thrill of livin is gone
Oh yeay say life goes on
Long after the thrill of livin is gone....John Cougar Mellencamp

Firms seem to be firing "The Lay-off Announcements" on all cylinders.

• eBay announced it would lay off 10 percent of its 16,000 workers, including 1,000 permanent employees.
• Goldman Sachs Group Inc. is cutting about 10 percent of its work force amid the ongoing downturn in the credit and lending markets, a person briefed on the plan said Thursday. Goldman Sachs will cut about 3,260 jobs.
• My former employer Tellabs is cutting 280 jobs.
• Chrysler LLC announced it would get rid of 1,825 factory jobs and General Motors Corp. trimmed some benefits and said it would make further white-collar cuts.

On the 'Flip' side, a jump in global sales boosted McDonald's Corp.'s third-quarter profit by 11 percent, the company said Wednesday, a bright spot among restaurant companies as strapped consumers balk at spending their cash on dining out. The nation's No. 1 hamburger chain cited the popularity of its sandwiches and drinks, but reiterated that it was discussing changes to its Dollar Menu because of the high cost of ingredients and expected to reach a decision soon.
Consumers -- spooked by bank failures, declines in the stock market and talk of a prolonged recession -- have cut back on spending and focused on necessities. Given their desire to save cash, fast food sales have held up far better than those at pricier sit-down restaurants. Oak Brook, Ill.-based McDonald's is "recession-resistant," Chief Executive Jim Skinner said on a conference call, adding that it is "operating from a position of strength."

Losing the Forests for the Banks

An interesting study by the Economics of Ecosystems and Biodiversity (Teeb), commissioned by EU, puts the annual cost of forest loss at between $2 trillion and $5 trillion. This makes the current loss from financial crisis look like small change.
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After today's market decline, the S&P 500 is at 2003 levels. This despite extraordinary intervention by the Treasury and the Fed, combining fast and loose monetary and fiscal policies.

Now the government wants to guarantee payments to banks on loans the latter make to individuals and businesses, in return for some equity stakes. Why don't the bozos go the whole distance and just nationalize the banks, rather than play this charade? If the taxpayers are going to be saddled with lousy assets, let them decide who get to run these entities to the ground.
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On a lighter note...
Google's clever new idea -Mail Goggles.

Downturn Forces Cutbacks Big and Small: Two-Sided Copies, Fewer Car Rentals and Firing the Lawn Service -- Companies Trim as Business Slows

Mayor Richard Daley vowed Thursday to identify, discipline and fire city garbage workers caught loafing on the job.

"These are great jobs. No one should be loafing, drinking, smoking, quitting early or anything else. . . . If you don't want the job, just quit,” the mayor said after a news conference on property tax bills.

"We are going to identify these individuals. We are going to discipline and fire them,” he added.

The tough comments, typical for Daley after embarrassing news breaks, came after an Inspector General’s report released Wednesday blasted garbage workers for loafing in what was characterized as “systemic, pervasive” waste and fraud. The office spied on 77 garbage truck drivers and 145 laborers in 10 wards before drawing its conclusions.

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Brunswick plans to shut 4 plants, lay off 1,400 workers as boating market continues to sour

Falling prices for the flash memory used in a wide range of consumer electronics have forced Micron Technology to shut down most of a factory it shares with Intel and lay off close to 3,000 workers, the company said on Thursday.

Consumers forced to rethink buying patterns