Monday, January 30, 2006

More job cuts and plant closures

KATU 2

Kraft announces plans to cut 8000 jobs and close up to 20 plants

Kraft Foods Inc., the nation's largest food manufacturer plans to eliminate about 8% of its workforce and close as many as 20 production plants.

Kraft said the cuts would save an additional 700 million in annual costs on top of a targeted 450 million in savings that will be achieved through restructuring that began January 2004.

Craft along with other food manufacturers have been hit by higher costs for commodities such as meat, coffee, nuts and packaging.

The thing that has always confused me when companies decide to close their production facilities or stores, is that it would seem to me in some circumstances that they are reducing their ability to produce future income.

Here's an example. Up until several years ago, there were two Kmart stores in Eugene/Springfield area. Kmart, in their cost cutting wisdom decided to close all Both stores.

OK, now I understand on the books it looks good because you just reduced a huge expenditure and extend profits. However, as in the case of Kmart, who was recently purchased by a Sears Roebuck I believe, is trying to make a comeback.

For them to return to the Eugene/Springfield area, with mean to find a new location, construction or renovation of the new building and having to build up a new customer base.

In the meantime customers like myself who frequently shopped Kmart, have discovered new stores to fill our needs.

I guess what I'm trying to say that it is shortsighted in my opinion too totally eliminate a future source of revenue instead of just cutting back. Because when times turn around, everybody else is ready to take advantage of it because they still have the machinery in place.

8 Comments:

Anonymous peod in Oregon said...

I used to think that the huge companies would some day wise up and realize that by elimating all these jobs people would not be able to purchase the goods they make and have to come around and put people back to work. That was before I came to the conclusion that the companies have absolutely no allegience to the US people what so ever. Some locate their headquarters in another country to avoid taxes. Some close plants here to open in 3rd world countries to pay low wages and avoid taxes and regulations and they build up developing countries in order to sell their product to them, they won't need us to buy their crap. Walmart has already begun opening stores in main land China. We have become expendable.
Meanwhile, as we see our standard of living go down, down, down, we are constantly told that we must have illegal cheap labor, we must have the cheap imported goods from China, Mexico, and every other developing country in the world. The future looks bleak unless we can figure a way to make the companies work for America instead of the other way around.

2:10 PM  
Blogger Robin said...

this reminds me in the Star Trek season 3, episode 21 [don't be impressed, I looked it up] with it's two different classes.

Stratos, the cloud city, relied on Troglyte working-class miners who reside on the planet's surface to do a manual labor.

to go along with Peod's argument, the situation is very similar. Large corporations are starting to rely on the cheap labor from illegal aliens while sacrificing jobs for Americans.

The other similarity to the show and the current reality, is the Troglytes were no longer content with merely just working in the mines and wanted to share the fruits of living in the cloud city, similar to illegal aliens no longer content to working on the farms and branching off to better quality more high-paying jobs.

the point is that American corporations took advantage of the cheap labor for so long that they have come to expect it at the sacrifice of the American people.

6:06 PM  
Anonymous Anonymous said...

Just a quick note: you are full of shit. I doubt you've ever travelled to Canada, or any country in Europe. Oh! I know...they are "socialist scum" right? Yep! Keep watching Fox News, asshole. You're right where you belong, fat indian lady. Keep being a human doormat for the neo-con corporate fascists who committed a holocaust against your forefathers.....how sad it all is. Me? I'm leaving for Canuckland...this country is fucked up beyond belief.

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