Tom,
Just a snippet from yours for the time being. I am getting badly behind in
answering previous messages and need to get to them, but I'll discuss just
one point for the time being:
(TW)
<<<<
. . . and then there is that sly euphemism, "redundancies," peeking out from
the bottom line of Keith's privatization panacea. Let's assume that, as
Keith suggests, 2/3 of the white collar work force is redundant. Let's
further assume that cuts can be made without a great deal of disruption to
service. Now what do we do with all those PEOPLE whose jobs were redundant?
Surely Keith doesn't mean to suggest that the people themselves are
redundant and can be shipped off to an incinerator like so many mad cows. I
believe the classic argument is that they will simply go off and (out of
necessity) find something more useful and productive to do and they will do
it more cheaply. There is, after all, "not a fixed amount of work to be done."
>>>>
True enough.
The firm I worked for then (about 1980-5) in Coventry was Massey-Ferguson.
Like all other automotive firms in Coventry at that time, it was hugely
overmanned both on the shop floor and the admin. Also, like all the other
large engineering firms in the city, it was largely run by the union
convenors and stewards, not the management. (We, middle-to-senior
management, were fall-guys in the middle with a lot of responsibility but
little power.)
But costs were running away with themselves, and also M-F was meeting
strong competition from John Deere and other firms elsewhere in the world
and decided that they had to take a firm hand. The board directors knew
they couldn't get away with anything like the redundancies they needed in
one go for fear of a long strike and sabotage, so they did it little bit by
little bit -- 2% here, 3% there -- then a pause for three or four months,
then a bit more here and there, and so on, and so on. Each time a
redundancy occurred, the unions threatened to ban overtime -- which they
did for a couple of weeks. Then, when the redundancees were safely down the
road, the workforce resumed their (well-paid) overtime. Everybody who was
made redundant at that time didn't take long to find jobs. This ritual went
on for about six or seven years. (Half way through this, I got bored and
left to start my own business -- my first attempt -- which failed
disastrously and cleaned me right out!)
At the end of that period, when the work force was vastly reduced, that
particular unit of Massey-Ferguson finally regained viability. Meanwhile,
six or seven major automotive firms in Coventry* and also one of the best
machine tool manufacturers in the world, Wickmans, which had failed to trim
their sails, failed catastrophically. Then scores of supplier firms failed.
This caused unemployment of many thousands in Coventry which lasted for
several years. The city simply couldn't adapt its employment structure
quickly enough. It has only been in the last four or five years that the
city has finally recovered and employment rates have reached the norm for
the country as a whole. Needless to say, the job structure now is totally
different from what it was then.
So, for everybody's sake, it's better to grasp the nettle sooner than
later. I'm not flip when talking about redundancies and I'm aware of the
unfortunate consequences for many but, as Walter Reuter, the great US trade
union leader of the 40s/50s, once said: "The biggest enemy of the working
man is an unprofitable business".
Keith Hudson
*Because of this, several of the great names of British cars, such as
Daimler, disappeared forever, leaving only Jaguar Cars in Coventry. Jaguar
that was in a bad way, too, and couldn't afford any further development of
its models until it was finally bought out by Ford, who were looking for a
prestige item for their range.
At 08:32 01/07/01 -0700, you wrote:
>There's a lot of good common sense in what Keith wrote on his experience
>with NHS. Good common sense isn't always the way that privatization and
>government contracting out proceeds, however.
>
>My experience as a government sub-contractor was that the small firms and
>non-profits that I worked for did the job better and more cheaply than the
>government conceivably ever could have. I received good pay for challenging
>but interesting work.
>
>Sometimes the process for awarding contracts seemed as though it was custom
>designed to ruin the small contractors. A costly bidding process would be
>followed by months of unjustifiable delay in awarding the contracts
>("nothing happens" during July, August and December; "nothing can happen"
>until the start of the fiscal year; "everything _must_ happen" before the
>end of the fiscal year...).
>
>Stipulated service delivery dates are retained even though the delay in
>awarding the contract has eaten up half the time scheduled to do the work.
>No problem -- four months of 70 hour weeks can easily win back those
>previous four months of enforced idleness.
>
>One of the reasons the small firm I was with could provide service more
>cheaply is that we chronically under-bid "to get our foot in the door". The
>unspoken expectation was that once we had made ourselves indispensible to
>the contracting agency we could pad the contracts out a bit more. That
>happened once and the company almost choked on the revenue.
>
>Eighteen months of bloated revenues left the company with too high operating
>expenses just at a time when the boss's marriage was crumbling and a new
>competitive regime was emerging. The new regime? Small components of BIG
>firms started bidding against us in a market niche that the company had been
>cultivating for a decade. Unlike us they weren't doing it for the money.
>They were doing it to "establish relationships". Price Waterhouse and
>Deloitte Touche could well afford to discount their consulting services. We
>couldn't.
>
>Another wave of "competition" came from a freshly minted crop of
>severence-packaged government senior managers. The idea was these folks
>already had the relationships and could help win a contract in border line
>cases where competitive cost and quality of work were not decisive. I almost
>puked when my boss started wooing one of these window-dressing mandarins.
>Someone was going to have to "add the value" that this senior manager was
>allegedly being paid for and it obviously wasn't going to be the person
>being paid for it.
>
>. . . and then there is that sly euphemism, "redundancies," peeking out from
>the bottom line of Keith's privatization panacea. Let's assume that, as
>Keith suggests, 2/3 of the white collar work force is redundant. Let's
>further assume that cuts can be made without a great deal of disruption to
>service. Now what do we do with all those PEOPLE whose jobs were redundant?
>
>Surely Keith doesn't mean to suggest that the people themselves are
>redundant and can be shipped off to an incinerator like so many mad cows. I
>believe the classic argument is that they will simply go off and (out of
>necessity) find something more useful and productive to do and they will do
>it more cheaply. There is, after all, "not a fixed amount of work to be
done."
>
>I won't appeal to Keynesian, historical or other demonstrations that such an
>outcome is improbable (to say the least). That would be too simple. Instead
>I will ask: WHO DECIDES? Who decides who's job is redundant and who stays
>on? That is the crux of the matter. The word "redundancy" has a
>pseudo-objective connotation to it as if the decision will be made -- or
>even can be made -- on the basis of purely technical criteria.
>
>This brings us back to Keith's complaint. His complaint is entirely
>justified. Keith is being treated (or not being treated as the case may be)
>AS IF he and his condition are _redundant_. The "who" who has decided the
>priorities of the NHS has decided that excessive credentialism and
>protective practices are more important than Keith's health, peace of mind
>or convenience.
>
>Keith would have us believe that competition, bankruptcy and the threat of
>failure will weed out the distortions introduced by favoritism and vested
>interests. Excuse me? Competitive firms in the real world succeed by
>trumping competition -- by cultivating favoritism and vested interest.
>
>
>Keith Hudson wrote,
>
>>So that's my example from my limited experience of the NHS. I have little
>>doubt whatsoever that the total cost of the NHS, due to inefficiency, and
>>being mainly labour-intensive, is probably two or three times more than it
>>needs to be. I have chosen "two or three" times not only based upon my
>>limited experience in the NHS as described above but also from what is
>>clear from the privatisation of many state industries in the last 20 years
>>in the UK -- and also from improvements in efficiencies within private
>>industry (such as I experienced in engineering) -- where the cost of white
>>collar overheads, after successive redundancies, are typically reduced to
>>33% of the previous.
>Tom Walker
>Bowen Island, BC
>604 947 2213
>
>
>
___________________________________________________________________
Keith Hudson, General Editor, Calus <http://www.calus.org>
6 Upper Camden Place, Bath BA1 5HX, England
Tel: +44 1225 312622; Fax: +44 1225 447727;
mailto:[EMAIL PROTECTED]
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