It seemed to me at the time that oh, let's say the auto workers, were just trying to get their share of a pretty big pie that, coincidentally, they helped create. Management didn't really have to turn around and charge more for the pie to the consumer. But they did. Instead of being satisfied with a slightly smaller nugget themselves, they dug into the mine of the consumers pockets even deeper and gilded one more layer on their golden parachutes. From my standpoint, it never seemed that inflation was caused by labor. Labor was just trying to get more to keep up with inflation. But what do I know.
What set me off today was this recent article in the New York Times:
"The toolmaker Snap-on will cut its staff by 4 percent, or about 560 jobs,
after earnings dropped in the second quarter because of declining sales in
North America and Europe. Snap-on said yesterday that it had earned $8.9
million, or 15 cents a share, in the April-June quarter, down from $45.7
million, or 78 cents a share, a year earlier. Excluding special charges,
profits were $23.3 million, or 40 cents a share." ????? (string of question
marks mine).
My first question, of course, is what the hell were the "special" charges that dropped earnings from 40 cents a share to 15 cents a share? A new Maserati for each of the top corporate officers? Polo lessons for their kids? Perhaps a Total Martha Stewart American Feng Shui makeover for each of their cozy 60 room bungalows? Next on my list of left-leaning liberal chastisements is this obvious observation. Obvious, at least, to any non-MBA propagandized innocent: They're still making a profit aren't they? Even if it's only 15 cents a share instead of 78 cents a share, it's still free and clear. It's still what's left over after all the costs and taxes have been paid. All the costs, including the salaries of the unfortunate 500 who are about to be kicked out into the street. Didn't management at any time in this process stop to think that maybe Snap-on suffered declining sales because the ever knowledgeable consumer thought their product was overpriced? My non-MBA brain would just naturally conclude that if you're earning 45 million in profit after ALL YOUR COSTS ARE PAID, you might be charging a smidgen too much for that monkey wrench. Even before you threw it in the lives of your soon to be ex-employees.
In conclusion. Even though the company still showed a profit; even though the 560 employees did their level best to put out a quality product; even though, so far, the only people to suffer in this scenario were the shareholders who, during an already tumultuous time on the stock market, still had 15 cents a share to show for their investment; even considering all of that, the ax has to fall on the tender neck of labor. Snap-on. Snap off. I just hope some of that $14.4 million special charge went into retraining those poor folks for another career. You know. Like maybe they could take extension courses... and get an MBA....
