I came across this article from the Kentucky Courier Journal.
Some US manufacturers, including General Electric are finding reasons to bring manufacturing back to the US.
There’s even some buzz words being created around it.
“On-shoring,” “back-shoring,” and “re-shoring” are all buzzwords for a U.S. manufacturing industry hopeful for change after decades of being weakened by cheaper labor overseas.
If this is a trend, I’m all for it.
Hat tip: Andrew Casey
Telecom’s axing of 200 management jobs yesterday has serious implications.
I understand those jobs are being axed mainly from Telecom Technology and Telecom shared services. It is my understanding that the 200 managers axed represent a workforce of between 1000 and 2000. There are a myriad of projects and other jobs within Telecom that will be affected.
Rumours have been circulating that Telecom is using the pressures of operational separation as a smokescreen to mask its plans to outsource and ultimately offshore up to a third of its workforce in the long term.
Telecom owns and manages one of the largest pieces of core infrastructure in New Zealand. Our national telephone network. Our landlines. Our ability to call a 111 service. Telecom services almost every household in the country in some way.
Telecom has underinvested in its network. It has made some unwise and questionable decisions in the past.
It holds the majority of our ICT infrastructure. It is not just a private company, it is a privatised national asset. The government is foolish to continue to maintain a hands off position on this matter. Labour believes there are public interest issues at stake.
Ernie Newman from Telecommunications users group TUANZ has today sensibly said that Telecom’s strong hint yesterday that it might split into two companies would allow Telecom to have a future in telecommunciations.
It could be in Telecom’s best interests to remove any questions about it operating in a level playing field by splitting its network business Chorus into a separate company. This would require a review of its undertakings and may make many of them redundant. Interesting that Telecom is now signalling separating its business when it was adament a few months ago that it wasn’t.
Telecom should have a future in NZ. Its future has to lie in fibre and not copper. But it must also behave responsibly. Keeping kiwi jobs and a strong telecommunications skills base in NZ is a part of that.
Whirlpool plans to start closing its refrigerator plant in Evansville, Indiana, on 26 March eliminating 1,100 local jobs. It has decided to shift its operation to Mexico. Why? Lower labour costs.
As the world’s largest home appliance maker, Whirlpool makes a healthy profit.
The AFL CIO (our CTU equivalent) reports Whirlpool has has received a $19 million economic matching grant that should be creating jobs in America. They’ve started a petition to Keep it made in America
Sound familiar?
In April 2008 Fisher and Paykel announced about 1,000 jobs, or 28 percent of the total work force, would be lost in New Zealand, Australia and the northern United States as plants were relocated to Mexico, Thailand and Italy, where a similar number of new jobs would be created.
Fisher and Paykel said at the time that labour costs in Mexico were about a sixth of those in New Zealand.
Sooo… what happens next time there’s a plan to outsource, offshore, a lot of NZ jobs?
Or, next time there’s the potential to create and provide certainty for a bunch of jobs in New Zealand through investment in local infrastructure, such as the electrification of Auckland rail.
Are cheaper labour costs (in China, Mexico) the bottom line? Or should our economic development rest upon a wider set of values? Maintaining and building skills. Encouraging local innovation. Building our own export base. Keeping kiwi jobs kiwi.
And what should the role of government be?
Betcha you didn’t know that technology is now New Zealand’s third-biggest export industry. According to a report in Computer World, last year technology outpaced wine and meat exports.
The Technology Investment Network’s 2009 report, sponsored by Ernst and Young, says technology exports last year rose 4 percent to $5.1 billion.
Technology firms also appear to have weathered the recession better than most, with 37 percent reporting a profit compared with 27 percent in other industries.
The report went on to say:
Ernst and Young partner Ben Willems said tech firms had coped better than others during the recession because they were more comfortable with rapid change.
“They’re more able to cope with what the market is throwing at them all the time,” he said. “They were the first businesses to wise up (to the recession).”
Technology firms were among the first to cut costs and remodel their businesses in response to the recession, without making the mistake of cutting research and development, he said.
“If there was one lesson that technology companies learned from the dot-com bust, it was not to put your strategic plans on hold.”
It’s no suprise to me, as tech firms have learnt that to be fast moving and adaptable is the only way to survive. We’ve got a few of them. We need more. It’ll be our edge.
We need ultrafast broadband acrosss the country (rural and urban). We need it soon. And we need the government to invest in the content that will provide better services to people and the industry that will create that content (in health, education and energy). And a better framework for skills.
Does the government realise this? I don’t think so. Communciations and IT Minister Steven Joyce seems to think laying dark fibre broadband is the extent of his responsibility (or interest) in the Portfolio. (Note not one km of fibre has been laid 15 months after the election).
Now he’s added another portfolio to his swag (tertiary education) he’ll have even less time to think strategically about New Zealand’s future.
Last week I spent an evening visiting Heretaunga College night classes. When I organised a public meeting here in Upper Hutt some weeks ago many of the people who came along were keen for me to visit their classes so that I could see for myself what they were talking about. It was a real eye opener and upon leaving I was even more convinced that the National government’s decision to cut ACE funding is the wrong one.
The first course was an Intermediate Spreadsheets course. I spoke to just about every participant and they all had very good reasons for wanting to do the course, most of them were work-related. Interestingly, several were small business people who were trying to upskill. One guy I spoke to, a painter, told me that most of his customers now expect to get their quotes electronically. The old carbon copy quote book doesn’t cut it anymore, so he was doing the spreadsheet course so he could do email quotes.
The next one I visited was an Introduction to Computers course. Almost everyone there told me they were doing the course for work-related reasons, either so they could keep their job, get a better one, or in some cases, get off the benefit. Looking through their workbook I fail to see how anyone could argue that courses like this one don’t improve literacy and numeracy skills. They certainly aren’t hobby courses.
I visited a Day Skipper course for people who were interested in boating. Now this does fit the definition of a hobby course, but it’s actually providing a valuable public service. Which would you rather see the taxpayer subsidising, a cheap course or more search and rescue operations when amateur boaties get themselves into trouble?
My visits to a floral arranging course, a stained glass window course and a Spanish course all reinforced the tremendous social value night classes bring to the wider community. People felt connected to others. Several mums told me how important their one evening a week out of the house is for their mental health!
The National government have got this badly wrong. Bill English knows the value of night classes, when he was railing against CPIT and Te Wananga o Aotearoa (yes, remember that?) he went to great lengths to tell people National wouldn’t touch night class funding. So what’s changed Bill?
Speedmatters is a good reference from the workshop on open source that Clare ran at conference. Shows a union that is prepared to put its money where the jobs will be and push hard for broadband.
Imagine if Telecom worked with the EPMU to produce this sort of thing rather than sacking hundreds of skilled employees.
I got asked the other day by a senior practitioner in the communications industry (that’s PR) what I thought about the quality of management amongst New Zealand corporates.
I had to think about it, because, while I think there’s definitely a much higher awareness that good management = a happier workforce = a stronger bottom line and solid relationship with the community, many companies still don’t get it.
There’s a glaring example happening right now, where one of our biggest companies and most recognisable brands, Telecom, is engaged in a disgraceful attempt to cut its core labour force and turn what’s left into dependent contractors who have no choice about where they get their work, how much they can earn, and yet they have to buy their own vans, gear and take all the risk. While at the same time taking a pay cut. A pretty big one.
And today, 200 of them are being made redundant. For no apparent good reason. Basically to cut costs.
Apart from the workers, who will be affected? All of us. Because there’s less skilled workers to fix your phone faults and make sure you’re connected to a landline and to the internet. These are people who know their work, know the system. And they’re either being left on the scrap heap or being undermined and devalued.
Good management? I don’t think so.
And get this. Telecom appeared before a parliamentary select committee yesterday in Wellington arguing against a bill that aims to ensure land taken by the Crown for public works, and no longer needed for the purpose it was taken for, is offered back to Maori first. Telecom said they supported the principle behind the Bill, but that it could have “unforseen consequences”.
The NZ Herald article reported that:
The proposed amendments could result in Telecom being forced to offer back sites that form part of our network and that would be prohibitively expensive, or impossible to replace.
If this occurred we maybe unable to deliver telecommunications service to the areas served by those exchanges and sites.”
I’ve heard reports that there are hundreds, possibly thousands, of phone/internet faults in Northland and Auckland that aren’t being fixed because of the current strife being caused through Telecom’s current public relations nightmare.
Telecom could start thinking about its management culture. And its priorities. It’s not rocket science. The strength of any organisation, any business, lies in the people. Treat them well and your organisation will flourish. And we’ll all benefit.
There have been no major strikes in the dairy industry in over 20 years. The union is generally seen as one that works very constructively with employers especially on productivity and literacy.
Enter Open Country Cheese (and especially Talleys who seem to have the worst industrial relations reputation in NZ).
They have attempted to compete with not only really favourable milk price arrangements but also with lower wages than other companies.
The union has not been able to negotiate a fair industrial agreement. It has given 14 days notice of industrial action.
OCCs (Talley’s) response has been interesting. Their chair Laurie Margrain has called the industrial action “wildcat” – with 14 days notice – huh.
He has then called for the dairy industry to get the same level of recognition as an essential industry as the Police. Even Kate Wilkinson isn’t that gulliable. But no offer to have binding arbitration as with the Police.
But now he has issued a lock-out notice for a six week period.
So we have moved from an industry where any strike action was terrible to one where the employer is going on strike for six weeks. Weird.
This dispute has the potential to be a very big one.
John Key correctly identified the wage gap between NZ and Aus as an issue pre election. NZIER says stemming the flow of skilled workers to Aus will be vital to our successfully charting our way out of the current recession.
Yet John Key says his plan is for 2025, and in the interim the gap is increasing because his government is suppressing wages wherever it has a chance.
How can this make sense?
The title which is a quote from a very bright but underpaid woman just about sums up my morning which I spent with people who work with disabled people – both with intellectual and physical disabilities.
They work very hard and over long hours – often because despite the unemployment situation lots of people can’t or won’t do their work.
They administer medicines, toilet people, bathe them, care for their money, act as counsellors, and are regularly assaulted.
One guy worked 143 hours in the last fortnight and a woman 130. One couple had three nights together in a fortnight.
There has been a job evaluation using the Dept of Labour job evaluation tool. Three jobs that should be the same pay.
Disability support workers $28k – $34k, Therapy assistants $29k – $41k, Corrections officers $41k – $51k.
Why? Women, brown and older.
Frankly while Labour made some progress in this area it was just not enough. The situation is disgraceful.
An important difference between the Labour and National youth packages is that under Labour someone, ie the school, was responsible for making sure the young person was getting training (not that the training had to be at a school) – under Key’s proposal no one is and the most vulnerable kids will continue to drift.
It’s a bit of a worry when you’ve got $1.5 billion to spend on delivering ultrafast broadband to a big swag of the population (only to their streets mind you, not to their homes) while many of the skilled workforce that you will rely on to deliver it are being forced out of the industry.
And I do mean forced out of the industry. I’m getting a steady stream of letters and pleas from service technicians with 10, 20 and even 30+ years’ experience telling me that in six weeks they’ll have their income cut by up to two thirds. And they’re not joking! They’ve done the maths.
There is widespread panic and dismay in this industry and if ever there was a time for a government minister to be paying attention, now is it!
Sometime in the next few weeks Steven Joyce will have to take a deep breath and make an announcement about how to roll out the government’s $1.5 billion campaign promise to deliver broadband to the streets of 75% of NZers.
In the meantime, Chorus, Telecom’s network business arm, has decided to turn 900 telecommunications technicians across Auckland and Northland from employees of two large resourced utility service companies into stand-alone “owner-operator” independent contractors with control of their work handed to a new sub-contractor, Visionstream.
The contractors will have to buy their own van and tools and take on greater financial risk in their jobs. Some workers have estimated it will cost them a minimum of $20,000 to get started. I’m now hearing that’s an understatement. And that’s not all, but I’ll be talking more about that in the coming week.
Cutting labour costs might suit Telecom’s business model right now (not sure I get that to be honest) but it’s not a good idea when public scrutiny is trained on the broadband rollout. Um, it’s the future!!
It’s very worrying that Steven Joyce doesn’t seem to understand what a skilled workforce is. In response to a question from me in the House on Thursday about whether the government was committed to a skilled workforce in the IT industry, he started talking about digital literacy. Well Steven it’s great that you want more people to have computers and to learn how to use them, but what about the workforce that will be installing the broadband and who fixes your phone faults? Do you care about them too?
Maybe his silence on this issue is because he thinks it’s a good idea for Telecom to be pushing a contracting model to severely de-skill and drive down labour costs at a time when Telecom is heavily lobbying for access to the $1.5 billion?
But beware Steven. It might look good on paper, but you might be being sold a pup. This is critical infrastructure we’re talking about. It’s your government’s big ticket item. It needs to be rolled out properly by a workforce that knows what it’s doing.
