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Archive for September 10th, 2010

The Myth of Fair Value - William Poundstone

It was rather fitting that last week Harley-Davidson workers in Milwaukee got their first look at a proposed labor agreement that would take effect in 2012 at about the same time as President Obama spent Labor Day at Laborfest where he announced a $50 BILLION jobs plan centered around transportation infrastructure including the rehab of 150K miles of road.

Well, I’ve traveled Milwaukee roads (and lived to blog about it!) and I can say they need rehab!  No argument there.  Bring on the new asphalt.

Speaking of jobs, Wisconsin has lost 35,000 manufacturing jobs since Obama took office in January 2009.  A total of 182,000 manufacturing jobs since 2000.  In July 2010 the unemployment rate was 7.8% a couple of points below the national average.  A good job that pays a good wage with health care and provides for a secure retirement even if you’re not rich might sound like simple ideas, but American workers are in dire straits.  There are job cuts and plant closings facing down families and the job cause is more urgent than ever.

This fact has not escaped Harley-Davidson executive management as workers in USW Local 2-209, USW Local 460 and IAM Lodge 78 will vote on a new labor contract Monday, September 13th which would preserve about 1,300 jobs in Milwaukee (PTO) and Tomahawk.  You can read the full 65-page text of the agreement on the Cyril Huze blog HERE.

The key highlights are they plan to institute a 7-year pay freeze, implement salary cuts, create a two-tiered work force, cut a couple hundred positions and use seasonal workers (who would make about half what current full-time employees earn).  According to the Kansas City Journal tier-1 employees would be paid between $30.50 and $34.38 an hour during the first year of the agreement, depending on job classification and tier-2 would earn between $21.96 and $29.87 an hour.  Pretty dam good pay if you’re unemployed!

And now just days before the vote Harley-Davidson CEO, Keith Wandell sent a letter to employees “highlighting his concerns” or what some might call spinning “why you should earn less.”  The letter was made available to JS Online by an employee.  You can read the full text of the letter HERE.  The key highlights are:

  1. An ultimatum — that if the contract is rejected the board will act the following day to authorize the process to relocate the production operations
  2. H-D is restructuring the design process to reduce development time and place a greater focus on “WOW”
  3. H-D is reducing the size of the dealer network
  4. H-D is challenging their suppliers like never before
  5. H-D is aligning all manufacturing operations under a common “production operating system”
  6. H-D is doing everything with fewer people (including salaried h/c) to run leaner at today’s lower volume

There is a Wisconsin metaphor: “You only worry as far as you can milk it.”  The recession favors management as an excuse to slash costs and puts more pressure on workers to agree to the demands.  In addition, the motor companies go-forward business strategy and restructuring is getting some traction.  So, it looks like labor concessions are an insurance policy for the future.

UPDATE: September 14, 2010 — H-D posted a press release HERE on the ratification details of the new 7-year labor agreement.  The company expects to have 325 fewer unionized employees in Milwaukee and the new contract will generate about $50M in annual operating savings in 2013.

Photo courtesy of William Poundstone

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Motorcycle/Car Collision In Oregon City

According to a new report from the National Highway Traffic Safety Administration (NHTSA) Oregon’s traffic deaths fell to a low of 9.4% from 416 in 2008 to 377 in 2009.   Washington’s road fatalities dropped from 521 to 492, a 5.6% decline.

At a news conference in Washington, D.C., earlier this week, U.S. Transportation Secretary Ray LaHood cited the weak economy as a contributing factor, saying many Americans had cut back on “discretionary driving,” including going out to bars and restaurants after work or on weekends.  At the same time, LaHood stated cars are becoming safer and motorists are becoming increasingly safety conscious.

In Oregon, the annual highway safety report also found:

  • The number of alcohol-impaired driving fatalities continued a five-year slide, dropping from 137 in 2008 to 115 in 2009.
  • Speeding-related road deaths declined from 147 to 125. In 2005, there were 161.
  • The number of bicyclists killed in crashes dropped slightly, from 10 in 2008 to eight in 2009. While the number of pedestrians killed on the road dropped from 51 to 35.
  • After improving dramatically in 2008, the number of teenagers killed in crashes was on the rise again in 2009, climbing from 34 to 46. In 2005, 84 teens died in vehicle crashes.

Bucking these overall positive trends were motorcycle fatalities in Oregon increased to 53 in 2009 from 48 in 2008.  Nationally motorcycling fatalities in 2009 decreased for the first time in more than a decade, dropping to 4,462 in 2009 from 5,312 in 2008.  To read the 2009 FARS data in detail click here (.pdf).

Fred J. Brehony -- Patriot Guard Riders

In related news and sadly was this morning’s report of a motorcycle rider who died at the scene after a collision with a car at the intersection of South Springwater and Bakers Ferry roads in Oregon City.  According to Clackamas County Sheriff’s Office spokesman Detective Jim Strovink the victim’s wife was following in a separate vehicle and witnessed the crash making this event even more of a tragedy.  Names were not released, but photos of the crash scene indicate the rider was a member of The Patriot Guard.  They are volunteer’s who provide escorts for veteran funerals, and Veterans coming home ceremony’s.  My sincere condolences to his wife and family.

It’s unknown if the driver didn’t yield or if the motorcyclist was at fault.  I’ll continue to follow the reports and provide updates.  My view is that you can never be defensive enough so please be safe out there.

UPDATE: September 11, 2010 — There is a good update in the Oregonian about Fred J. Brehony who was killed yesterday on his way to the Willamette National Cemetery.  As a member of the Patriot Guard Riders he was in route heading to a funeral for Howell “Hal” Birdwell (a U.S. Vietnam War vet) when he collided with a car.  Mr. Brehony was a U.S. Navy Veteran who served on a destroyer during the Vietnam War and deeply believed in the mission of the Patriot Guard.  He will be missed.

UPDATE: September 14, 2010 — KGW did an expanded story on Mr. Brehony.  Video is HERE.

UPDATE: September 14, 2010 (3pm PST) – Information was posted on the PGR Forums Web Site which outlines a two phase mission for Mr. Brehony.  One on Thursday, 16/Sept/10 and another on Sunday, 19/Sept/10.  Staging and briefing times are covered HERE.

Photo courtesy of Clackamas County Sheriff’s Office.  Brehony photo courtesy of Olivia Bucks and The Oregonian.

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