Hockey Puck said:
"...Shifter Knob -
I haven't had a chance to respond to your response to my post that got you a tad excited...
...You responded well to my "If it is that bad, just leave". My guess is from your remarks that you are willing to admit that every once in a while a company that has been around for 90 years like Oak Harbor has made some good changes and good decisions. What bothers folks in management is that at times, no matter what changes they enact, it is never enough for some people. It seems like the only thing they know is how to criticize. Thats what wears down folks like David VP.
They are doing their best, attempting to survive, making the best decisions they can, yet it isn't enough. After a while, you feel like Jerry Quarry fighting Ali. Just how many shots can you take?
The problem that companies like Oak Harbor face is that if they allow their cost structure to get too far out of line vs. their competition, they can't make money. The fly-by-night bottom feeders that hurt you for a little while and then go away aren't the problem. Those guys are pretty much gone, or don't have a real impact. The real problems are the large, well run, technologically sophisticated non-union carriers that hold a significant cost advantage to union, or partially union, companies. These are quality carriers, who provide good service, yet they have a net cost advantage of 5% to 10%. They can charge less than organized carriers, yet still make a decent return. That's why carriers are resistant to unionization.
There is no doubt that unionized jobs in this industry pay well. But also recognize that if a carrier can't make a decent enough return to reinvest in their comapny, they won't make it. That is the situation Oak harbor is faced with.
David VP would probably love to give eveyone in his company a raise. But the market, and the prevailing pricing, is driven by forces outside of his company that he has no control over. The only thing he can really control is the cost structure within his company and that's what he is trying to do..."
Well, let's examine some of your presumptions. First of all, I'm the first one to praise my company when they do something right, and the first one to slam them when they screw up.
It's called feedback. And I'm sure that David and Ed can handle it. And if they can't? Is that our fault?
If they are hearing more negatives than positives, perhaps they need to examine the issues being raised a bit more closely instead of sticking Band-Aid solutions on them. Talk is great, two-way communication is great, but action is what gets the job done and the problems resolved. And by the way...? I'm not saying they aren't in every case
not fixing the problems, but sometimes one feels as if a major calamity has to happen before action gets taken to resolve an issue or problem. And that certainly is not just this company, I am sure. These are clearly universal sentiments, if what I read in other forums is to be believed.
You next assumption is that they are doing their best. I don't agree with that, and I'm sure I am not alone on that. However, I am always willing to give them the fair opportunity to do their best, and simply ask the same back from them.
You last assumption is a bit more complicated, but let me try and answer it in one good shot:
A.) The bottom-feeders are not gone. As some drop by the wayside, others appear to take their places. There is always a niche for cheap carriers: it's those shippers looking get something for nothing. They want premium service for the cheapest rates, and they never find it. But the good carriers, and I do count Oak Harbor amongst them, can and do suffer because of that market effect.
B.) I've made this point before, and it's one I stick by: the union is a market force. An example? Fed-Ex Freight is a big non-union LTL company. Why does Fed-Ex's wages, benefits and work rules so closely mirror those of union carriers? Simple: to keep the demand for unionization low.
So the mere existence of a union presence keeps wages and benefits comparable to union carriers, hence making the "union effect" a verifiable market force. You can see this in other industries where unionization levels are high. And this effect keeps wages and benefits relatively comparable across a broad sampling of carriers.
A case in point is Oak Harbor. There are roughly 550 Teamster employees at Oak Harbor, roughly half of the front-line employees in this company. The company mirrors on the non-union side what is negotiated on the union side, and in some cases, has been forced into paying more just to keep certain terminals non-union. Remember Oakland, David? The same with benefits.
The union doesn't negotiate for the non-union employees. if the union side asks for a bigger increase than what the company
wants to pay, they could in theory simply take it from the non-union employee's pay package. They won't, for obvious reasons. But
won't and
can't are two different concepts, you see?
C.) I would point out that Oak Harbor has grown for years and years with a mostly Teamster workforce, and every five years has doubled in size. Only until we moved into California and Nevada have we seen a significant growth in the non-union sector of the company. When David's dad Henry came to us in '85 and asked us for concessions to help him survive, we gave him those concessions. And his company did grow. So it's not like the union employees just take and take and take. Noe one, not the union and not the union employees, are looking to push this company or any company, for that matter, off of a cliff.
This company does make money, and they are very profitable. Being a union or even a partially union company doesn't necessarily alter that fact. It does make for happier employees and a more stable workforce, though.
A case in point would be to compare ABF and Consolidated Freightways. Two national LTL companies, both unionized and members of the National Master Freight Agreement. One is now bankrupt and the other is not only surviving, but profiting and competing on a national and regional level. So with all things being equal (i.e. labor costs, etc being comparable), what made one go out of business and one survive and prosper?
Could the answer be... management? Good and bad?
What else could it be?
Sure, cost structure is very important for any company in a competitive environment, and labor is one of if not the biggest costs for any business. However, industry analysts point to the driver shortage, and have made no bones about it: until wages and benefits rise enough to make the job more appealing, the driver shortage will continue for the foreseeable future. That is across the board. Truckload and LTL. You ask any company or any local union across this country if they are hurting for drivers, and you will hear "yes" far more than you will hear "no". When even the best companies, union and non-union, are having a difficult time recruiting qualified and experienced drivers, those cost differences you mentioned level out, because everyone is in the same boat.
It's not just costs that cause companies to resist unionization, either. It's a perceived loss of control and flexibility more than anything.
I've seen management get quite snitty about it. I saw an e-mail memo from our VP of Operations here at Oak Harbor dated 11-04-05 after our last contract was ratified. He said in it, and I quote;
"Those of you with non-union employees, please make sure you talk to each member of your staff and inform them we will be increasing their hourly wage to the same levels as the union employees ($.60/hr.) effective November 1st, 2005...
...We were concerned in 2005 that our non-union staff were being unduly delayed in a wage increase because of the unnecessarily protracted negotiation with the Teamster's Union, so we made sure all of the non-union staff received their wage increase ($.50/hr.) in April with a promised bonus check of $500...
Now, as David and Ed have committed to our non-union staff, we want to make sure that their loyalty and support is rewarded and we are giving them an additional hourly increase to ensure their hourly wage and compensation package continues to be better than those we have to negotiate with..."
Of course, their wage and compensation package is not better, but exactly the same. The non-union employees get fully-paid health and welfare and a 401(k) pension plan with a company contribution. But their health insurance is nowhere near as good as either the Washington or Oregon Teamster plans in a side-by-side comparison, but costs pretty close to the same. The company pension plan isn't bad for what it is, but it still lacks compared to the union pension on many levels. Note that they were given a $.50/hr. raise until the union finished negotiating a higher wage, and then they bumped up the non-union wages to compensate. Market forces at work.
I do love the sentiment expressed at the end of the message, though. Very touching that they think so highly of those they have to negotiate with, huh? Especially since it was the company that drug the negotiations out so long. Had they just agreed to our demands, it all would have been over with very quickly... LOL!
Deregulation has visited upon us all an brave new world of deep discounting and unchecked competition, and that has been at least as hurtful as it has been helpful. It did help to make the industry more efficient in many ways, but it also caused stagnating wages, an environment that encouraged unsafe and sometimes illegal practices, and a higher emphasis on profits than on service.
But I do see the pendulum swinging back the other way a bit, and I am encouraged by that...
