I’m sure they can all find jobs at Wal-Mart or McDonalds:
By all accounts, BMW’s parts distribution warehouse in Ontario was one of the jewels of the company’s system.
Supplying dealer service departments throughout Southern California, Arizona and Nevada, it received gold medals from BMW for its efficiency and employed several of the top-ranked workers in the country. In the roughly 40 years its workers had been represented by the Teamsters union, there had never been a labor stoppage.
Times being what they are, when a Teamsters committee came to the plant in early June to open negotiations over a new contract to start Sept. 1, they thought they might be asked to accept minuscule wage increases and maybe some givebacks on health coverage.
They were stunned by what they heard instead: As of Aug. 31, the plant would be outsourced to an unidentified third-party logistics company and all but three of its 71 employees laid off.
The union contract will be terminated. Some of the employees might be offered jobs with the new operator, but there are no guarantees. And no one expects the new bosses will match the existing $25 hourly scale or the health benefits provided now.
We know how this is going to play out, don’t we? Boeing mapped it all our for them years ago:
Sure, it’s immoral to abandon your loyal American workers in search of cheap labor overseas. But the real problem with outsourcing, if you don’t think it through, is that it can wreck your business and cost you a bundle.
Case in point: Boeing Co. and its 787 Dreamliner.
The next-generation airliner is billions of dollars over budget and about three years late; the first paying passengers won’t be boarding until this fall, if then. Some of the delay stems from the plane’s advances in design, engineering and material, which made it harder to build. A two-month machinists strike in 2008 didn’t help.
But much of the blame belongs to the company’s quantum leap in farming out the design and manufacture of crucial components to suppliers around the nation and in foreign countries such as Italy, Sweden, China, and South Korea. Boeing’s dream was to save money. The reality is that it would have been cheaper to keep a lot of this work in-house.
The 787 has more foreign-made content — 30% — than any other Boeing plane, according to the Society of Professional Engineering Employees in Aerospace, the union representing Boeing engineers. That compares with just over 5% in the company’s workhorse 747 airliner.
Boeing’s goal, it seems, was to convert its storied aircraft factory near Seattle to a mere assembly plant, bolting together modules designed and produced elsewhere as though from kits.
The drawbacks of this approach emerged early. Some of the pieces manufactured by far-flung suppliers didn’t fit together. Some subcontractors couldn’t meet their output quotas, creating huge production logjams when critical parts weren’t available in the necessary sequence.
It doesn’t matter, though. Our corporate culture rewards immediate profits and doesn’t care about longterm viability. It doesn’t care about human capital and the things that make a company what it is. If they can save a few million in the short term, goose the executive bonuses for their thrifty leadership, they will do it. And they’ll move on to their next raise before the damage is obvious.
For the employees, though, the damage will be immediate and likely permanent:
Miguel Carpinteyro, 42, had 14 years with BMW and every expectation of retiring there. In the backyard of their home in the San Bernardino County community of Highland, he and his wife, Jerri, just finished building a pool, which is good therapy for their two autistic sons. A daughter has a heart condition requiring frequent medical visits.
The family put money aside for retirement through a 401(k), but they may have to tap that to live on, never mind paying their medical bills without employer-sponsored insurance. Their household budget, based on a BMW wage, can’t be sustained on much less. “We’ll probably end up losing the house,” Jerri told me.
You wonder how many people this is happening to every single day.