Plant shutdowns: Long-term positive or delay of layoffs?

I lived and worked in Asia for 10 years. In Japan the first cuts are to the bonuses of the executives and the part time (often foreign) line workers. Executive compensation in Japan is typically 3 to 8 times an engineer''s wage. I believe we (in the United States) have let capitalism run amuck, to the point of excess. We are reaping what we have sown (or those in power have sown). I suggest we look to Japan and some of the Asian countries (not perfect) as a better model for compensation

Just go to a 4 day work week and get it over with. That and reset the H1B quotas to a reciprocal number - we hire x number of their people at their wage, they hire an equal x number of ours at theirs.

Free market rules but your managers are directly controllig your paycheck...managers are not taking the hits, the working people are...unless you work for GM...

Reduction and expansion are part of our business as demand and supply of our goods. Freemarket rules.

Glad to see I was not the only one seeing this. Unfortunately it is those executives and board of directors running the companies that are the problem, lack of vision and until something changes it will be business as usual. No matter how good the talent of the workers you have, if your management isn?t as good you can only go so far before your company gets left behind and or dies. I did not mean to suggest all or do I again this time. It truly only takes a few bad apples to appear to spoil the rest. Unfortunately I feel we have a lot more bad than good then in past times. However with the internet maybe we just hear of it more often then before.

It may postpone the inevitable as suggested i.e. if the industry/company continues to tank further, my advice, hold on to your talent. Typically most executives do not need the salary, they can easily go on a fraction of their total compensation for six months to a year and need to take hit more than rank and file employees, employees will be loyal.

I am echoing the sentiments expressed here by beijiner. At least 20 firms in Taiwan that are doing exactly that vs here in US where layoff is the first thing they do, I still see a lot of places they can cut before they need to fire folks. If I were running the show I would do the Asian Way. At least keep people employed even if the pay is lower but much higher than unemployement checks.

the typical US company practice in this kind of slow down term is to get people off the payroll, and shut down the factory, vs grab anyone from the street and expand like maniac. The typical Asia or Japenese style practice will be lower exective compensation to start with, and keep the workers for trainiig or factory for PM during the down term, pay cut cross the board as a way of cutting the cost before letting people go. Go figure which way is the best now

A bit of truth in everything. Don't forget that the execs have a larger component of their package in options and the shutdown helps in getting better numbers.

Rob is correct in his assessment and Policebox has a screw unjustly missing from the door. To imply that the management deserves 10 to 1000 times the pay as the average working person is performing a disservice to all working people. The greed and avarice of the non-humans in top management do not and will not be beholden to the workforce. Their main goal is the pay including bonus, plain and simple. It is this same mentality that got this whole world into this mess to begin with. No compassion, consideration, or a conscience and now we all are paying for it. As for the long term, I would not be surprised if this is just the tip of the iceberg as more and more top-level executives scape and scrimp to get as much out of the workforce as possible - to get their bonus, and then just shut the places down, take a huge tax write-off, and walk away. Leaving the people who made them think they were great in the gutter. Yippee - good luck and have another great day!

Rob's comment may be closer to the mark than most realize. Most poorly managed companies resort to the 'end of year', 'end of quarter' pullback to make their books look better. Only problem is, the real cutbacks come in the first quarter of the following year where loss of key personnel can be 'absorbed' thoughtout the coming year.

Rob's comment may be true in some cases, but I am sure it is unfair to most. Executives typically make 10 to 100 times as much as their employees. Laying off 1,000 employees is not something that they could balance by cutting their own pay.

The bigger story here is that your manager convinced you to take a week off, Susanne. You never did that at my urging! Welcome back, slacker :) Good managers encourage time off during slow periods-we don't force it.

It allows the execs to continue getting large bonus at the expense of the workers. If their pay was truly in line they wouldn't need to do this

It?s just smart and its good responsible management, good people are hard to find and laying them off may result in never getting them back. When business picks up staffing becomes a challenge and it is expensive. Forced vacations and temporary shutdowns are a way to share the pain and provide some assurance regarding the commitment a company has to the business. Usually by this time the herd has been culled and dead wood has been laid off so what is left is the core of people needed to get thing started again. It?s a good thing, its just unpleasant. Gene