Tuesday, June 16, 2009

Killing Corporate America

By Alan Caruba

All those morons who are forever going on about the evil corporations never notice that it is corporations, great and small, that employ millions of Americans and the best of them do everything they can to ensure their workers are happy, if for no other reason than that it increases productivity. People don’t work just for money. They work for a sense of dignity and self-worth.

The Obama administration appears to be intent on destroying or driving out one corporation after another by any means possible. This amounts to punishing success and crushing it in the meat-grinder of government regulation. The latest victim is Fedex.

A June 9 Washington Times editorial noted that, “Led by Rep. James L. Oberstar, Minnesota Democrat, the House on May 21 passed legislation that contains an almost hidden provision—a mere 230 words—that would hobble FedEx Express. It would do so by completely changing the labor laws under which the company operates.”

“A mere dozen or so workers in just one city could hamstring much of the nation’s overnight delivery service.” The difference between FedEx and United Parcel Service (UPS) is that UPS is unionized. As such it is governed by the National Labor Relations Act, the terms of which “favor unions such as the Teamsters (and) both have an interest in kneecapping FedEx Express.”

The fact is, however, FedEx Express ships 85 percent of its goods by air. UPS moves 85 percent of its goods by truck.

This means that Americans who are accustomed to overnight delivery face the prospect of losing that remarkable service and, if they are looking to the U.S. Postal Service to provide it, they can forget about it because the USPS contracts with FedEx to carry almost all of its Express Mail and a significant portion of its Priority Mail.

The bad news doesn’t stop there. The Wall Street Journal reported recently that the Postal Service has announced that, by October 1, it will decide whether to close or consolidate 3,100 post offices and retail outlets out of 36,700. It is also contemplating eliminating “tens of thousands” of jobs from its work force of 636,000.

The Postal Service, in every respect a government entity, lost nearly $2 billion in the three months that ended March 31. Mail volume is down nearly 15 percent from the previous year.

I wonder why? Could it have anything to do with email? Could it have anything to do with a 42-cent First Class stamp for a service that hasn’t essentially changed since the post office was first organized by Benjamin Franklin?

Now consider what happens if FedEx, the private corporation that moves most of the USPS Express and Priority mail is forced out of business in order to ensure that some useless union can cripple its operation? Who will move your mail swiftly then? Not USPS and not UPS.

This is what your government is doing to you and to the nation.

This is your government that currently owns General Motors in partnership with the United Auto Workers and to hell with the bondholders who lent it money in the belief that they would be first in line to get their money if it went bankrupt. Their contract said so, but a gangster government has little interest in honoring the sanctity of contracts. The new GM ads say it is “leaner and greener” which is another way of saying “smaller and slower.”

Meanwhile, Microsoft Corporation’s Chief Executive Officer, Steven Ballmer, has told the Obama administration that the world’s largest software company would, according to Bloomberg News, “move some employees offshore if Congress enacts President Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.” The U.S. imposes some of the highest taxes on corporations of any nation in the world.

Microsoft which employs more than 95,000 people worldwide draws the bulk of its workers from the United States where 56,552 are based. Higher taxes would reduce its profits by an estimated 10 to 15 percent. One option would be to shed jobs. Another would be to move as many employees as possible to a nation like Ireland or to hire foreign workers to replace them.

Mind you, Obama cannot do this by himself. He needs the help of a Democrat-controlled Congress and he is getting it.

This President and this Congress, minus the powerless Republican minority, are doing everything they can to destroy major elements of the nation’s business and industrial base. Energy producers and providers of oil, natural gas and coal are facing obstacles alongside of those in the nuclear industry. A massive, totally bogus “Cap and Trade” tax will drive up the cost of electricity and cost consumers thousands is in the works.

This is a purposefully induced Depression when the present Recession shows signs of giving way to improving economic forces.

Your Senators and your Representative need to hear from you daily, warning them they will not be reelected if this continues. Get their email address. Use it every day.

13 comments:

Di said...

where are these corporations that do everything they can to make workers happy? I've yet to see any. My neighbor works as a sales rep. for microsoft and he's being laid off AND the company is keeping their commissions that they have already earned. By laying him and others off right before the end of the month this July ,that's when the commissions are paid. So even though these people have already earned the commissions the benevolent corporation is keeping their money, how can they do this? Because they're non-union, the workers are employees at will, meaning they have no rights inside the workplace other than the few discrimination standards and safety laws the government sort of enforces. Profit is the bottom line and the more the better. Workers in this country give concession after concession and these corps. still move overseas.
Why is it that workers joining together to better their lot in life is wrong? I don't get why it's o.k. for the Chamber of Commerce, the M.O.A., etc to join together to gain more strength collectively but not laborers. Your article smacks of the idea that we should be grateful to have a job whatever it pays, you can take that idea right down to the bottom. We need family supporting jobs to rebuild the middle class. That's who pays the property taxes that support our cities and towns. How do we think a nation of 8.00 to 10.00 dollar an hour wage earners can do that?

The autoworkers are in a union precisely to protect themselves collectively, that's what the union is for. Why do you blame people for that? It's what upper management and stockholders do all the time. What a double standard.

Carolyn said...

Mr. Caruba, I missed that Fed Ex news, and I may be missing something here. Are you telling us that if Fed Ex doesn't unionize that it will be out of business? Or are they going out because of being non union? Or is the USPS giving a contract to UPS instead? I'm sorry for being dense. God Bless~

Alan Caruba said...

The change to the law would in effect unionize FedEx and thus allow workers at any point in the transit of goods to hold up the company for any supposed grievance, a form of extortion, but worse, it is a way to destroy the company's ability to function.
Ask any auto company manager about the "work rules" imposed by the auto union and you will understand why GM and Chrysler were unable to compete against other non-union companies.

Alan Caruba said...

Di, you're right. Profit is the bottom line. When a corporation of any size cannot make a profit, it cannot stay in business, cannot retain or add employees. Having a job is not a right. It's determined by economic factors that are often beyond the control of the company and the employee.

The Obama administration is literally creating situations that destroy jobs by both threatening corporations and their employees with higher taxes.

jae said...

"How nice to have had 100 people sign up as "followers" of this daily blog. I am truly honored and delighted."

Hope I'm listed as one of these. If not make me 101!

Rich Kozlovich said...

We have to understand that unions only came into existence because the employees were being abused by their employers. The Homestead Strike on 1892 is one example. The coal mines were a real hotbed of unionism because of the abuses by mine owners. The song "16 Tons” by Tennessee Ernie Ford wasn’t just cleaver lyrics…it was reality.

Having said that, we still come to the fact that when the abuses by management ended or at least were curtailed, unions created non-productive contracts that would eventually come home to roost in lost jobs because companies would go out of business or move out of the country.

How much we pay people is important. How much they produce is more important. When foolish union officials make foolish but popular demands they eventually kill the company.

No matter which way you view the Homestead strike, it is clear that the actions of the most violent and radical members of the union killed the union because of the violence they perpetrated. Union leadership comes into existence on the emotions generated by bad management. Unfortunately there are times when that the release of all of that emotion results in uncontrollable mobs and bankrupted companies.

Successful companies must have a bottom line and that line must be profits. They pay all the taxes, pay all the wages, pay all the benefits because they generate an economy. Without successful commercial enterprises there is no economy and the more the owners make the better. Why? Because eventually it moves back into the economy through more investment oR because they simply spend it.

Spending large sums of money is the real “giving back to society” because that is what creates jobs. It isn’t charity. They hire people, who now have dignity because they are working and earning their way in life, who are then capable of investing and building wealth for themselves and their families that will eventually be shared by the community as a whole because those investments create more employment.

One more point. Government interference by FDR resulted in the Great Depression. A man who never had one successful business venture! The same anti-business rhetoric was spewed into the air by FDR and his lackeys in the 30’s. It wasn’t just hot air. They acted on it. The patterns of the New Deal are being repeated right now and the end result will be the same.

Di, I recommend that you read Amity Shlaes book, The Forgotten Man.

Luciano - Familia GG said...

Alan,

I agree with DI. Employees have the right to get together and seek for better work conditions.
However, you seem to say that this would create more costs for organizations (this case FedEx) and thus, possibly lead them to bankrupcy. My question is: isn't UPS unionized? How can they afford to be unionized, give their employees better wages and health insurance, and still be competitive in the marketplace? If UPS can do it, why Fedex can't?

Alan Caruba said...

Jae, it is easy to sign up as a follower. Just click on the appropriate link on this page and you can be one, too.

Alan Caruba said...

Here's a comment from CanadaFreePress.com, a news/opinion website that shares this blog's posts:

"One of the amazing developments has been corporate giant UPS' partnering with the Teamsters Union to attempt to saddle FedEx Express with a union (www.brownbailout.com). I guess misery loves company."

Guy said...

For all the pro-union posters here, here are a few things to consider ...

First of all, I wonder how many people at FedEx are really unhappy with their jobs and the money they make doing those jobs? I'm betting they are all quite happy to have a job right now, and would never find similar work paying what they earn in this economy. The only ones unhappy are the unions, who want their cut of the FedEx pie.

Secondly, yes UPS is still in business after being unionized, but they have teetered on the brink of failure several times. They got their start competing against the USPS, which IS heavily unionized, and was so fat and sloppy that people were crying out for an alternative to their crappy service. So, UPS came along and took away the lion's share of their package delivery business, simply because their company was LESS fat and sloppy.

FedEx got THEIR foot in the door the exact same way. They saw that BOTH the USPS and UPS were sloppy and inefficient, and they saw the opportunity to do things faster, better, and cheaper. I know all this because I run a small business, and have had to depend on each one of these companies through the years. FedEx has been a godsend to my business, and I'd cringe if I had to go back to UPS and the post office. UPS can't deliver anything without either losing it, or damaging it, and when they do, they almost NEVER take responsibility for it. Again, I KNOW this because I've dealt with them for years, and I have NEVER had a successful claim for damage. The USPS is equally inept, their customer service is deplorable, and they just snuck a rate increase through that unfairly heaps the bulk of the increase on businesses. The cost of a stamp just went up a penny, but the nasty little secret they didn't tell anyone was that they re-classified certain envelopes (business sized envelopes) and set up a whole new rate system for them. They raised the postage on a two ounce large envelope from fifty one cents to a whopping $1.05!!!!

So, we have a choice to make. Do we want to deal with sloppy, inefficient businesses just so Mary can take an extra day off when she has the cramps, or Bob can sit around the union hall and dream up ways to break the company's bank account, or do we want lean, efficient business who employ lots of people, provide a valuable service, and OCCASIONALLY lay someone off (usually a loser) in order to make a fair profit?

I'm voting for the latter. Unions had their time and place, but they have effectively destroyed every industry they have invaded ever since. I've seen it first hand throughout my life, and I predicted this whole mess we're in years ago. You simply can't pay people not to work and survive, unless you're in a Socialist country. Gee, come to think of it ....

Guy said...

For all the pro-union posters here, here are a few things to consider ...

First of all, I wonder how many people at FedEx are really unhappy with their jobs and the money they make doing those jobs? I'm betting they are all quite happy to have a job right now, and would never find similar work paying what they earn in this economy. The only ones unhappy are the unions, who want their cut of the FedEx pie.

Secondly, yes UPS is still in business after being unionized, but they have teetered on the brink of failure several times. They got their start competing against the USPS, which IS heavily unionized, and was so fat and sloppy that people were crying out for an alternative to their crappy service. So, UPS came along and took away the lion's share of their package delivery business, simply because their company was LESS fat and sloppy.

FedEx got THEIR foot in the door the exact same way. They saw that BOTH the USPS and UPS were sloppy and inefficient, and they saw the opportunity to do things faster, better, and cheaper. I know all this because I run a small business, and have had to depend on each one of these companies through the years. FedEx has been a godsend to my business, and I'd cringe if I had to go back to UPS and the post office. UPS can't deliver anything without either losing it, or damaging it, and when they do, they almost NEVER take responsibility for it. Again, I KNOW this because I've dealt with them for years, and I have NEVER had a successful claim for damage. The USPS is equally inept, their customer service is deplorable, and they just snuck a rate increase through that unfairly heaps the bulk of the increase on businesses. The cost of a stamp just went up a penny, but the nasty little secret they didn't tell anyone was that they re-classified certain envelopes (business sized envelopes) and set up a whole new rate system for them. They raised the postage on a two ounce large envelope from fifty one cents to a whopping $1.05!!!!

So, we have a choice to make. Do we want to deal with sloppy, inefficient businesses just so Mary can take an extra day off when she has the cramps, or Bob can sit around the union hall and dream up ways to break the company's bank account, or do we want lean, efficient business who employ lots of people, provide a valuable service, and OCCASIONALLY lay someone off (usually a loser) in order to make a fair profit?

I'm voting for the latter. Unions had their time and place, but they have effectively destroyed every industry they have invaded ever since. I've seen it first hand throughout my life, and I predicted this whole mess we're in years ago. You simply can't pay people not to work and survive, unless you're in a Socialist country. Gee, come to think of it ....

Jesse said...

I'm reading a book by Michael Medved "The Ten Big Lies About America".
A must read is his Chapter 5-"The Power of Big Business Hurts The Country & Oppresses the People"
He gives a lot of detail and back up history in his book.

"When the righteous increase, the people rejoice, But when a wicked man rules, people groan. " -From the wisest dude on earth.

jesus said...

I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


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