Thursday, November 20, 2008

Limiting Union benefits As Well

Much is being said these days about various bailout packages for the Big Three automakers, but a lot less is appearing regarding the UAW's obligations in resolving this current crisis. One news article noted recently that, "Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying." Not a single mention about what we should expect of the unions and their members, past and present. One of the many stipulations being talked about is that the Big Three should present a detailed plan for turning around their respective companies before receiving a loan. What about a stipulation for the unions as well? Did we forget their role in all of this?

The one thing conspicuously absent in almost all of the discussions these days in is an equally stringent call for rollbacks or significant changes in union contracts. At the heart of this entire mess are the high costs of production, and the single largest cost facing Detroit are its labor costs, direct and indirect, as well as short and long-term obligations. The fancy word for the latter is "Legacy Costs." Regardless of what you call it, no company can survive indefinitely if must constantly bank more and more of its meager earnings or profits to fund future obligations.

Sure, management is clearly at fault for giving in to what in hindsight were unreasonable demands, and now it's time for Peter to pay Paul, and that means reexamining the logic and soundness of every single "Legacy" benefit promised to workers in the past 20-25 years. If we don't do that, then indeed it is quite possible that this country could collapse into something most of us dare not even mention.

P.S. So that no one misunderstands my motivation in writing the above, let me make it perfectly clear that I am not anti-union. In fact, in my early days as a newspaper reporter I actually saw the need for a union where I worked and I proceeded to establish the very first Newspaper Guild established in Northern Virginia. Nonetheless, abuse of power can indeed be a dangerous thing and there has been an abundance of abuse within the UAW!

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Wednesday, November 5, 2008

Buyer Offers Advice to Sellers

I just heard from my good friend who is still trying to buy a printing business. After giving it a rest for a couple of weeks, he wrote me and summarized his recent experiences. I think his views are insightful and I wanted to pass them along:

"As I evaluated our experience with trying to purchase a business, I realized that in reality, the owners of the businesses we met, forgot that their real objective was to sell the business. They get all caught up in the mechanics of confidentiality, protecting things which in the end, are just general knowledge, and frankly, create obstacles for the purchasers.... They become their worst enemy when trying to sell a business. They treat the potential purchaser as a spy, an enemy from whom they have to protect themselves. As you very well said, and I actually did when I sold two of my businesses, the first people I told, were the employees, and actually gave them a chance to become the new owners, if they would find somebody to finance them. Anyhow, I just wanted to give you this thought."

Even in the worst of times, there will always be qualified buyers interested in buying a printing business, but sellers need to adopt a new and improved attitude that treats potential buyers as allies rather than a spies or individuals wishing to do them harm!

Feel free to provide your feedback on this as well as other comments.