Some unions need their heads examined but investors need to wise up even more….absurd situations like Eddie Bauer’s will hopefully spearhead market-driven reform in CEO compensation packages.

This guy gets $10 million as a severance package while the company declined under his watch? Sounds like he didn’t do his job, so his should be “written up” and eventually fired. You know the game — companies will get rid of any employee if they really want….write them up a couple of times, put them on “probation” and any little thing contrary to your “plan for improvement”, you’re gone.

$10 mil ? – that would pay for a lot of health care.

http://seattlepi.nwsource.com/business/297650_eddiebauer29.html

When I referred to whose kool-aid you were drinking, I thought it was obvious that I meant you were taking the Company’s side. One of the main points you failed to consider was that “The **workers** at the motorcycle maker’s York, Pennsylvania, plant **voted overwhelmingly** Wednesday to reject a proposed new **contract that called for lower wages and benefits** for new workers and forced all union-represented workers to **pay more for health insurance**.” (quote from CNNMoney.com)

This isn’t a case of “the Union” making outrageous demands that the employees don’t support. It doesn’t matter that other people have to pay a portion of their health insurance; what matters to the HD workers is that their income will decrease or their expenses will increase. While top management is raking in the dough, the company wants to reduce the workers’ income.

And you seem to have ignored the implications of this: “Two percent of the increase was dependent on the union accepting the Company’s salaried health care plan or another plan that would save the Company an equal amount of money.” In other words, 1/2 of the “wage increase” would be paid for by the employees themselves, through the increased employee costs or reduced benefits of the salaried health care plan being forced upon them.

Next, there is the problem of trying to compare HD’s situation to that of the US automakers. HD does not compete with Japanese motorcycle manufacturers for price/components/labor costs/quality/etc. HD competes for mind-set only. HD sells a mythology, and the actual motorcycles are just one component of that mythology. HD makes far more money licensing and selling clothing and knick-knacks to the non-riding public who would like to pretend to be a part of the HD myth.

Then comes this paragraph, which appears to contradict itself in several ways:

“I’ve also noticed a lot of advertising from dealers looking to move bikes, the over retail pricing is a thing of the past and there are more than a few bikes sitting around unsold. A strike helps clear the backlog. If dealers can spend less on advertising because the bikes become just a bit more scarce and they can hold the line on prices instead of offering discounts, dealers make more money.”

A strike clears the backlog, so is it a good thing? (for who?) If “more than a few bikes are sitting around unsold”, then … “dealers make more money”? You seem to be saying that if they spend less on advertising and sell fewer bikes for less money per bike, they will somehow end up making more profit!

Finally, reducing the pay for new workers from $20.78 to $18.25 per hour in the “two-tier [salary] structure” means that company morale will be seriously damaged by creating two classes of workers: those on the old structure, who see themselves as higher quality employees, and those on the new, lower-pay structure, who are looked down upon by the “high quality employees” and who will resent being paid less money for what they see as the same work. This will not be good for the workers or for the company.

I don’t really know what you meant by saying, “This is not the 1960s and bargaining as though it is seems to be extremely short sighted,” but it sounds just like something from the mouth of that prevaricating drug-abusing blowhard, Rush Limbaugh. So, maybe it’s his kool-aid you’ve been drinking?

I hope this explains some of the reasoning behind my kool-aid comment. But, please don’t take it as an insult to you or to anyone else. At the time I wrote it, I had intended to comment on the specifics of your article, but before I had a chance to construct my reply, I had to rush out the door. So I just banged out a quick one-liner.