The Waukesha Chamber of Commerce has announced that it plans to join the Milwaukee Metropolitan Chamber of Commerce in aggressively opposing Milwaukee's sick leave ordinance arguing that it would create a "negative business climate for the region...."
On November 4th Milwaukee residents by more than two to one approved a binding referendum that requires employers to provide their employees with paid sick days. Milwaukee joined San Francisco and Washington D.C. as the third city requiring sick day benefits.
Under the new law a full-time worker would earn a minimum of one hour of paid sick leave for every 30 hours worked, or nine days a year. Businesses with 10 or fewer employees would be required to provide 5 days a year to full-time employees.
For most of the past decade Waukesha's employers have experienced labor shortages. Until the recent economic downturn, businesses reported that the biggest obstacle to expansion was a shortage of skilled workers.
Increasing compensation by providing additional benefits such as paid sick leave makes employment more attractive. It builds employee loyalty which increases productivity.
Henry Ford understood this basic truth when a century ago he established the $5 day, doubling the average manufacturing wage. Ford's 300% turn-over rate vanished as increased compensation bought increased loyalty from Ford's employees.
The Waukesha Chamber of Commerce knows that if Milwaukee-based firms provide their employees with paid sick days it will make it harder for Waukesha firms that do not provide these benefits to compete for workers.
Companies can compete based on high-volume, low-cost production or they can compete through innovation, quality production and high levels of service. The Waukesha Chamber of Commerce is committed to a low-road strategy that might help some firms prosper in the short run, but will not create a thriving regional economy with shared prosperity.
Showing posts with label high road. Show all posts
Showing posts with label high road. Show all posts
Wednesday, December 31, 2008
Monday, February 11, 2008
Johnson Control's embrace of green markets: an alternative to low-wage production
Johnson Controls’ new contract to make lithium-ion batteries for hybrid cars demonstrates that manufacturing companies can successfully compete at the high end of the global economy by embracing green markets, high performance technologies, advanced manufacturing, quality and service.
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high-volume. low-cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high-volume. low-cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
Wednesday, February 6, 2008
Johnson Controls' embrace of green markets: an alternative to low wage production!
Johnson Controls’ new contract to make lithium-ion batteries for hybrid cars demonstrates that manufacturing companies can successfully compete at the high end of the global economy by embracing green markets, high performance technologies, advanced manufacturing, quality and service.
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high volume. low cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high volume. low cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
Wednesday, August 29, 2007
Costco Takes the High Road to Grafton!
It's well know that poverty level wages subsidize Wal-Mart's low prices!
Wages are so low that Wal-Mart's employees qualified for $2.5 billion in federal assistance in 2004.
Earlier this week the Milwaukee Journal Sentinel reported Wal-Mart is also shortchanging Wisconsin, failing to pay over $17 million in state and local taxes between 1998-2000.
Wal-Mart’s tax avoiding schemes shift the burden for funding schools, fire protection, public health, infrastructure maintenance, workforce development and public safety to property tax paying homeowners.
The state is trying to recover its losses in court and Senators Robeson and Decker have introduced combined reporting legislation that would close the loophole Wal-Mart is using to avoid paying its fair share.
While that case unfolds, Milwaukee area consumers can use the power of the purse to send a message to Wal-Mart that we do not appreciate their tax dodging shenanigans, low pay and unfair labor practices.
There’s a new boy in town-Costco- that competes head to head with Wal-Marts’ Sam’s Club. In fact, Costco same store sales are growing faster than any other club shopper, 6.2% so far this year.
Maybe that’s because as the MJS reports: ”The employees seem more helpful at Costco.”
And why are Costco's employees more engaged? Perhaps because they average $17 an hour, while Wal-Marts’ average $10. And unlike Wal-mart’s employees, 92% of Costco employees can afford the company’s healthcare benefits.
Costco employees earn more because they have a union-the Teamsters that represents 13,800 of the company’s 127,000 employees. That’s only 17% of Costco’s total workforce. But union representation creates a ripple effect that helps set labor standards for all Costco employees.
Costco’ labor agreements lock in wage and benefits packages that are the highest in the grocery and discount retail industries. And Costco passes on similar compensation packages to its non-union workers.
Costco’s executive management recognizes that Wal-Mart/Sam's Club competes based on low prices and low wages-a low road corporate strategy. They recognize that in the labor market, like all markets, you get what you pay for. So Wal-Mart’s low wages attract less skilled and motivated employees. The result is low levels of service.
So while Costco’s prices are roughly equivalent, it competes on the basis of service and productivity. Costco attracts more skilled and dedicated employees by paying them fairly. The result is better service and higher productivity.
As Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”
Costco’s CFO Richard Galanti elaborated: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”
Henry Ford understood this a century ago.
Ford doubled his employees’ wages to $5 a day in an effort to solve a 300% absenteeism rate. Voola! Bad jobs turned into good ones and turnover plummeted. An added benefit was that Ford employees could actually buy the cars they produced.
A 2004 Business Week study compared Costco’s business model to Wal-Mart's. The study confirmed that Costco’s employees are more productive. They sell more: $795 of sales per square foot, versus only $516 at Sam’s Club. Consequently Costco generates more revenue per employee; U.S. operating profit per hourly employee was $13,647 at Costco versus $11,039 at Sam’s Club.
The study also revealed that Costco’s labor costs are actually lower than Wal-Mart’s as a percentage of sales.
By compensating its workers fairly, Costco enjoys rates of turnover far below industry norms, one-third the industry average of 65%. Wal-Mart's is about 50%.
High employee retention rates save Costco’s money. It costs $2,500 to $3,000 per worker to recruit, interview, test and train a new hire, even in retail. Wal-Mart’s turnover rate cost the firm an extra $1.5 to $2 million in costs each year.
Of course, other factors besides low turnover and employee productivity are responsible for Costco’s cost advantage. For example, Costco saves millions because it does not advertise.
Costco can also afford to pay more because it cuts the fat from executive paychecks. Its overall corporate philosophy is that workers deserve a fair share of the profits they help generate — not just a pat on the back or being called “associate.”
While CEOs at other major corporations average 531 times the pay of their hourly employees, Sinegal takes only 10 times the pay of his typical employee. His annual salary (2004) was $350,000, compared to $5.3 million awarded to Wal-Mart’s Lee Scott.
After California Costco Teamsters ratified a contract a few years ago, CEO Jim Sinegal said Costco workers are “entitled to buy homes and live in reasonably nice neighborhoods and send their children to school.”
Costco's high road strategy including union representation, decent pay and fair treatment leads to better service, increased employee productivity and loyalty.
Costco has now opened in Grafton. Its entry into the Milwaukee market poses a question to all of us-do we want to live in a country where the largest employer pays below poverty-level wages and cheats on its taxes? Or, do we want Americans to enjoy a decent income and a sense of security in return for their work?
If you believe the latter, take a trip out to Grafton and let your money do your talking.
Wages are so low that Wal-Mart's employees qualified for $2.5 billion in federal assistance in 2004.
Earlier this week the Milwaukee Journal Sentinel reported Wal-Mart is also shortchanging Wisconsin, failing to pay over $17 million in state and local taxes between 1998-2000.
Wal-Mart’s tax avoiding schemes shift the burden for funding schools, fire protection, public health, infrastructure maintenance, workforce development and public safety to property tax paying homeowners.
The state is trying to recover its losses in court and Senators Robeson and Decker have introduced combined reporting legislation that would close the loophole Wal-Mart is using to avoid paying its fair share.
While that case unfolds, Milwaukee area consumers can use the power of the purse to send a message to Wal-Mart that we do not appreciate their tax dodging shenanigans, low pay and unfair labor practices.
There’s a new boy in town-Costco- that competes head to head with Wal-Marts’ Sam’s Club. In fact, Costco same store sales are growing faster than any other club shopper, 6.2% so far this year.
Maybe that’s because as the MJS reports: ”The employees seem more helpful at Costco.”
And why are Costco's employees more engaged? Perhaps because they average $17 an hour, while Wal-Marts’ average $10. And unlike Wal-mart’s employees, 92% of Costco employees can afford the company’s healthcare benefits.
Costco employees earn more because they have a union-the Teamsters that represents 13,800 of the company’s 127,000 employees. That’s only 17% of Costco’s total workforce. But union representation creates a ripple effect that helps set labor standards for all Costco employees.
Costco’ labor agreements lock in wage and benefits packages that are the highest in the grocery and discount retail industries. And Costco passes on similar compensation packages to its non-union workers.
Costco’s executive management recognizes that Wal-Mart/Sam's Club competes based on low prices and low wages-a low road corporate strategy. They recognize that in the labor market, like all markets, you get what you pay for. So Wal-Mart’s low wages attract less skilled and motivated employees. The result is low levels of service.
So while Costco’s prices are roughly equivalent, it competes on the basis of service and productivity. Costco attracts more skilled and dedicated employees by paying them fairly. The result is better service and higher productivity.
As Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”
Costco’s CFO Richard Galanti elaborated: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”
Henry Ford understood this a century ago.
Ford doubled his employees’ wages to $5 a day in an effort to solve a 300% absenteeism rate. Voola! Bad jobs turned into good ones and turnover plummeted. An added benefit was that Ford employees could actually buy the cars they produced.
A 2004 Business Week study compared Costco’s business model to Wal-Mart's. The study confirmed that Costco’s employees are more productive. They sell more: $795 of sales per square foot, versus only $516 at Sam’s Club. Consequently Costco generates more revenue per employee; U.S. operating profit per hourly employee was $13,647 at Costco versus $11,039 at Sam’s Club.
The study also revealed that Costco’s labor costs are actually lower than Wal-Mart’s as a percentage of sales.
By compensating its workers fairly, Costco enjoys rates of turnover far below industry norms, one-third the industry average of 65%. Wal-Mart's is about 50%.
High employee retention rates save Costco’s money. It costs $2,500 to $3,000 per worker to recruit, interview, test and train a new hire, even in retail. Wal-Mart’s turnover rate cost the firm an extra $1.5 to $2 million in costs each year.
Of course, other factors besides low turnover and employee productivity are responsible for Costco’s cost advantage. For example, Costco saves millions because it does not advertise.
Costco can also afford to pay more because it cuts the fat from executive paychecks. Its overall corporate philosophy is that workers deserve a fair share of the profits they help generate — not just a pat on the back or being called “associate.”
While CEOs at other major corporations average 531 times the pay of their hourly employees, Sinegal takes only 10 times the pay of his typical employee. His annual salary (2004) was $350,000, compared to $5.3 million awarded to Wal-Mart’s Lee Scott.
After California Costco Teamsters ratified a contract a few years ago, CEO Jim Sinegal said Costco workers are “entitled to buy homes and live in reasonably nice neighborhoods and send their children to school.”
Costco's high road strategy including union representation, decent pay and fair treatment leads to better service, increased employee productivity and loyalty.
Costco has now opened in Grafton. Its entry into the Milwaukee market poses a question to all of us-do we want to live in a country where the largest employer pays below poverty-level wages and cheats on its taxes? Or, do we want Americans to enjoy a decent income and a sense of security in return for their work?
If you believe the latter, take a trip out to Grafton and let your money do your talking.
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