Comments on: Laid Off, Laid up and thrown out. http://www.samuraimarineblog.com/2008/01/20/laid-off-laid-up-and-thrown-out/ My point of view on News and Commentary Mon, 15 Mar 2010 00:56:31 -0700 http://wordpress.org/?v=abc hourly 1 By: SWSamurai http://www.samuraimarineblog.com/2008/01/20/laid-off-laid-up-and-thrown-out/comment-page-1/#comment-329 SWSamurai Wed, 23 Jan 2008 18:15:28 +0000 http://www.samuraimarineblog.com/?p=108#comment-329 But then you have examples of companies that merge, and that merger is the camel that broke the straws back (Yes... I messed that up intentionally.) Where the resulting merged company, even with it's lay offs and cutbacks can not support itself and dies, whereas if they had stayed separate entities, they might have some financial issues, but they would still be around. Using Brooks Fiber as a good case. We were doing fine before the take over. But over the course of three additional mergers and then the greed of the execs, which I do not think was the only reason for the collapse, the entire thing came down around us. Resulting in several thousand layoffs, the loss of people's retirement packages, and even the effect it had on the rest of the economy both by killing a company and by producing a huge number of unemployed people. You read about this stuff more than I do, Grant. What steps or roles does the SEC play in the merging of two companies? I am not a big fan of the government getting their noses in everything, but of the merger is going to impact enough people, there should be an outside group that, without bias, looks over the details to make sure that the merger is going to produce a viable entity, and not just be a merger for the sake of ONLY increasing market share, profit and making the top 5%~15% of the people in the company rich. Which is what happened with MCI WorldCom and a couple other organizations. But then you have examples of companies that merge, and that merger is the camel that broke the straws back (Yes… I messed that up intentionally.) Where the resulting merged company, even with it’s lay offs and cutbacks can not support itself and dies, whereas if they had stayed separate entities, they might have some financial issues, but they would still be around.

Using Brooks Fiber as a good case. We were doing fine before the take over. But over the course of three additional mergers and then the greed of the execs, which I do not think was the only reason for the collapse, the entire thing came down around us. Resulting in several thousand layoffs, the loss of people’s retirement packages, and even the effect it had on the rest of the economy both by killing a company and by producing a huge number of unemployed people.

You read about this stuff more than I do, Grant. What steps or roles does the SEC play in the merging of two companies? I am not a big fan of the government getting their noses in everything, but of the merger is going to impact enough people, there should be an outside group that, without bias, looks over the details to make sure that the merger is going to produce a viable entity, and not just be a merger for the sake of ONLY increasing market share, profit and making the top 5%~15% of the people in the company rich. Which is what happened with MCI WorldCom and a couple other organizations.

]]> By: Grant http://www.samuraimarineblog.com/2008/01/20/laid-off-laid-up-and-thrown-out/comment-page-1/#comment-318 Grant Tue, 22 Jan 2008 04:52:21 +0000 http://www.samuraimarineblog.com/?p=108#comment-318 Again, I say you are correct that there definetly flaws with the system. However I will contend it is the best system out there to drive economic development. I also think most companies do so called "due diligance" prior to merging and whether they make it public at the time or not, know what effects the merge will have on the workforce. In fact, a lot of the reason for many mergers is the streamlining of the work force. For example, two companies in the same business, essentially selling the same products, with approximately the same percent of market share, combine to give the combined company "x" market. The benefit is the elimination of two sets of executives, two sets of support staff, two advertising budgets, etc. Can create cost savings by only having one group perform those same functions. Having been on the receiving end of several mergers and sell off's I agree that more thought needs to go in to some mergers. However, many of these mergers, are cases where if the merge had not happened it would have lead to the complete non-existence of the company. So in that case, which is a better scenario, loss of "x" numbers of jobs, or all the employee's being out of work. more to follow..... Again, I say you are correct that there definetly flaws with the system. However I will contend it is the best system out there to drive economic development. I also think most companies do so called “due diligance” prior to merging and whether they make it public at the time or not, know what effects the merge will have on the workforce. In fact, a lot of the reason for many mergers is the streamlining of the work force. For example, two companies in the same business, essentially selling the same products, with approximately the same percent of market share, combine to give the combined company “x” market. The benefit is the elimination of two sets of executives, two sets of support staff, two advertising budgets, etc. Can create cost savings by only having one group perform those same functions. Having been on the receiving end of several mergers and sell off’s I agree that more thought needs to go in to some mergers. However, many of these mergers, are cases where if the merge had not happened it would have lead to the complete non-existence of the company. So in that case, which is a better scenario, loss of “x” numbers of jobs, or all the employee’s being out of work. more to follow…..

]]> By: SWSamurai http://www.samuraimarineblog.com/2008/01/20/laid-off-laid-up-and-thrown-out/comment-page-1/#comment-312 SWSamurai Mon, 21 Jan 2008 06:57:04 +0000 http://www.samuraimarineblog.com/?p=108#comment-312 I understand that this is the way things seem to be getting done these days. But how much more time would it cost to practice a little due diligence, and plan out what they will do with the existing workforce and then merge... instead of finding out they have too many people doing the same thing, lay them off, then a bit later offer some of them their jobs back when they realize that they let too many people go?In 1980 when the "Bell" broke, I think it was a mixed blessing. Yes, it allowed competition, but I think it also led to what we are seeing now. Like some obscene reverse amoeba, they are all coming back together again. It is almost like there is really no supervision of these things by anyone. Thinking about this more, I do not think that job security for good employees should be a sacrificial lamb on the alter of competition. Quite a few of the upper end management and executive staff of companies that go through these mergers and take overs will never identify with the plights of the people that stand to lose from these incidents, so it is a case of "Hmmm... I did not know." I think that this sends the wrong signal to the employees. On one hand, the company WANTS dedicated, hard working employees that are willing to go that extra mile for the company... but when the time comes to merge, they (the company) do not always do everything that they can to protect the jobs of the people that they expect so much of. Yes... there are exceptions, I am not making this a broad statement of all companies. I am sure that there are companies that have defended their employees during a merger, or chose not to merge because they would have to sacrifice something of their integrity. But, and this may some naive to you, when did the desire to get rich become more important than pride and dedication? I understand that this is the way things seem to be getting done these days. But how much more time would it cost to practice a little due diligence, and plan out what they will do with the existing workforce and then merge… instead of finding out they have too many people doing the same thing, lay them off, then a bit later offer some of them their jobs back when they realize that they let too many people go?In 1980 when the “Bell” broke, I think it was a mixed blessing. Yes, it allowed competition, but I think it also led to what we are seeing now. Like some obscene reverse amoeba, they are all coming back together again. It is almost like there is really no supervision of these things by anyone.

Thinking about this more, I do not think that job security for good employees should be a sacrificial lamb on the alter of competition. Quite a few of the upper end management and executive staff of companies that go through these mergers and take overs will never identify with the plights of the people that stand to lose from these incidents, so it is a case of “Hmmm… I did not know.”

I think that this sends the wrong signal to the employees. On one hand, the company WANTS dedicated, hard working employees that are willing to go that extra mile for the company… but when the time comes to merge, they (the company) do not always do everything that they can to protect the jobs of the people that they expect so much of.

Yes… there are exceptions, I am not making this a broad statement of all companies. I am sure that there are companies that have defended their employees during a merger, or chose not to merge because they would have to sacrifice something of their integrity. But, and this may some naive to you, when did the desire to get rich become more important than pride and dedication?

]]> By: Anonymous http://www.samuraimarineblog.com/2008/01/20/laid-off-laid-up-and-thrown-out/comment-page-1/#comment-310 Anonymous Mon, 21 Jan 2008 06:42:39 +0000 http://www.samuraimarineblog.com/?p=108#comment-310 Competition: Fortunately or Unfortunately depending on your outlook, is how business's rise and fall in our free market economy. With all its faults, greedy CEO's, shareholders, investment bankers, politicians, special interest's, and boards of directors who are asleep at the wheel. It is still the best system for a functioning economy. The Sprint/Nextel situation is an unfortunate one, however I wouldn't fault Sprint/Nextel for their ill advised decision to merge several years ago, as the wireless industry was consolodating and it saw this merger as a way to remain in the top three of wireless carriers. What has hurt Sprint/Nextel is not their merger, but their lack of service and coverage in many area's. Size alone is not a guaranteor of success. The problem over the last dozen years, it that market forces have not been allowed to drive the value of companies. I would credit the creation of Junk Bonds and Michael Milken and Ivan Boseky with the current bust/boom cycle in the last decade with all the layoff and fire sales of companies, because the money was there to inflate and overvalue companies beyond market forces. And yes, greed played a big part in it, including CEO's and CFO's lack of integratity in falsifying records to continue to run quarterly gains for long extended periods of time, which were not realistic nor sustainable for quarter after quarter, after quarter.....more to follow Competition: Fortunately or Unfortunately depending on your outlook, is how business’s rise and fall in our free market economy. With all its faults, greedy CEO’s, shareholders, investment bankers, politicians, special interest’s, and boards of directors who are asleep at the wheel. It is still the best system for a functioning economy. The Sprint/Nextel situation is an unfortunate one, however I wouldn’t fault Sprint/Nextel for their ill advised decision to merge several years ago, as the wireless industry was consolodating and it saw this merger as a way to remain in the top three of wireless carriers. What has hurt Sprint/Nextel is not their merger, but their lack of service and coverage in many area’s. Size alone is not a guaranteor of success. The problem over the last dozen years, it that market forces have not been allowed to drive the value of companies. I would credit the creation of Junk Bonds and Michael Milken and Ivan Boseky with the current bust/boom cycle in the last decade with all the layoff and fire sales of companies, because the money was there to inflate and overvalue companies beyond market forces. And yes, greed played a big part in it, including CEO’s and CFO’s lack of integratity in falsifying records to continue to run quarterly gains for long extended periods of time, which were not realistic nor sustainable for quarter after quarter, after quarter…..more to follow

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