Plant shutting down (partially) why would they keep all upper management?

[wartrace]

My plant is ending production on half our products and cutting production on the other product by half. (It is a 3/4 permanent drop in production). They have laid off 900 people out of 1700. The odd thing is they retained all the upper management and moved some into jobs that others were laid off from. For instance a woman who had been the lab manager and moved up to project manager is now going to be a lab technician. This is the job she started at with the company twenty years ago. She will be making three times what the other lab techs make.

They have people called "area business managers" who are being retained. None of them are being let go but they will only have 1/4 of the area to manage. The same goes for a lot of the other upper managers. The quality manager will still have a lab manager under him despite his department going from 35 people down to 15 people. The guy will only have five people to directly manage, it seems as if one of the two managers is redundant.

I have noticed other peculiar moves. One woman who had a fast ride to the top (a real butt kisser) is being retained at her normal salary as a quality engineer despite not being qualified. A friend of mine had applied for the job in the past but was told he wasn't qualified because his degree was in computer engineering. This woman's degree is in marketing?

It is just strange that they would retain these people and place them in jobs that should cost the company HALF of what they will pay them? My speculation is they plan on closing the facility entirely at some point in the future and they want to have these people to move into other jobs as they come open at corporate or at other plants. Any ideas why they would keep all the upper/high paid people?

[TZ]

1. My take?

Is that they are putting these people into jobs they necessarily don't want and are going to stress them out. They probably WANT these people to quit so they don't have to pay them severance OR unemployment. I had an employer who did this. They would put people into undesirable positions hoping for them to leave voluntarily. Its gotta be humiliating for someone who was once a lab manager to be a lab tech.

[Pale Blue Dot]

2. Your take sounds like a possibility. Some others:

1. They are honestly hoping that they will be able to hire people back and they figure that the "less skilled" workers would be easier to find than management, when that happens.

2. They are intentionally getting rid of union jobs (if there is a union here).

3. They believe they may be declaring bankruptcy soon.

Out of these four options, 3 could be bad for you. Keep you resume updated and your eyes peeled. Good luck!

[wartrace]

4. It is a union plant.

The people being replaced are staff people, the union workers are being permanently let go. There is a distinct possibility that they want to shut the place down due to the union. They have three other plants in the U.S., none of them are under the same union contract as this one is. This plant is over thirty years old, we have been told it is the highest cost plant to operate. They have shut down two other plants in the U.S. in the past eight years, both of them union plants under the same contract as ours is. One other thing I have noticed is that they are stockpiling products that right now only our plant can make (in the U.S.). There is a possibility that they are modifying plants in Mexico or our other plants in the U.S. to produce the products in the future. At the level of production they are at now they aren't making money.

[Blue Diadem]

3. Both DH and I have seen that happen.

Neither of us understand why they do that but it seems to be what they do. I've seen it happen in retail and my DH in manufacturing. During the Reagan years of downsizing management positions, I worked with a man who had been a department manager for some 20 yrs and he was put back onto the floor with the same pay. He made about $8.00 more an hour than I did. Many of those who were put into those positions quit which makes me think that is the intention.

DH tells me most recently at the place he was laid off from in Feb. that in one department, they put 3 management into the laid off workers spots and only kept one employee who knew how to run the machines. He said it took quite some time before those managers could even do the work.

[wartrace]

6. Sorry about your DH's layoff- I hope he is like me.

I am being let go in May with a severance package. I have a feeling that this is going to be one of the better things that have happened to me in my life. I was miserable at that place and there wasn't a day that went by that I didn't feel like getting out of there. The problem was they paid me just enough to hang in there despite my despair.
Everyone who is staying has told me how "sorry" they were that I was going. I told them how sorry I was they had to stay, I don't have to "worry" about losing my job in the future like they do! I'm in great shape financially- house paid off, no bills other than standard household expenses which will be easily met by the unemployment checks. I have a money making idea for the severance money that MIGHT allow me to never have to work for another employer again. All I have felt since I was notified is a sense of relief.
I posed this question out of curiosity. I have friends that are being retained and they are either very worried or think they are "safe". I have been advising them to not go into debt & to make every effort to save as much as they can/get out of debt. I guess only time will tell.

[Blue Diadem]

9. Glad you're getting severance. DH didn't get any when his first place closed.

He worked there 25 yrs. IIRC, the company offered a flat $5,000 and the union turned it down and was never able to renegotiate a severance package. He wasn't at the 2nd place long enough for severance. That place was like yours, it was the only union shop left. They shut it down and moved their work to their non-union plants.

It took him a year to find work after the 2nd one closed and that was only after retraining. Now he's laid off again, looking to retrain maybe for solar this time. Classes are iffy though, next one isn't until late summer.

It's awful for those who are left hanging, not knowing if their jobs are relatively safe or not. My daughter is going through that right now. She knows her department is being outsourced but no one is being upfront with exactly what positions will be retained. She's heard that the outsourcing may involve only management but then has heard it will be every one. It's just crazy.

I hope your money making venture works out for you. You sound like you're in good shape with the right attitude too!

[wartrace]

10. I hope he can get into the solar field.

They are offering us retraining due to the Nafta-taa program but they haven't informed us about the retraining opportunities yet. I am going to take the training in case my scheme doesn't work out for me & I would LOVE to get into the alternative energy field. Around here geothermal is a great option but VERY FEW homes are set up for it. The electric costs are skyrocketing (TVA spill clean-up & the million dollar salary for the upper management people). I don't know what kind of training will be offered but I am NOT going to truck driving school. There is no way in hell I could do that for a living.

Although unions are beneficial for workers they can also shoot themselves in the foot. At my plant they had piece work on the table in the last negotiation. It was going to work like this; The builders had a standard number to build every day. If they exceeded that number they would be paid extra on a per unit basis. Many of the builders would finish two hours early every day & had to sit around and wait for quitting time. Nobody would lose any money in the deal, they could only make more. Some of them could have made up to an extra hundred dollars a day. They let the entire union vote on it although it only effected a couple of hundred workers. All the builders voted for it but the rest of the union didn't. Less than a year later we started laying off.

[Blue Diadem]

12. You might want to check out the WIA program too.

It's for displaced workers and sounds similar to the TAA program but may offer different training. DH used the WIA program to train in IST/electrical/hydraulics and pneumatics and will most likely be using it again for the solar programming.

DH just read your post and agrees with you about unions shooting themselves in the foot. He experienced it before having been in skilled trades and having non-skilled trades vote on skilled trades issues.

[NewJeffCT]

5. Are they moving the jobs overseas anywhere?

They might think they need the management staff to deal with the new plant overseas?

[wartrace]

7. No, they are sending the production to Mexico (Nafta related).

They don't need these people in Mexico, most of them would refuse a move down there.

[NewJeffCT]

11. I should have said out of the country

My wife's old company did similar... they employed 700-800 people at a factory in Mass, but were basically forced by Wal-Mart to ship all their goods through Guangzhou in southern China. Since it's impractical to ship goods from Mass to China so they can be shipped back to the US, they ended up finding suppliers in China and they ended up laying off the factory workers & keeping the management team & sales and marketing people. However, in order to still save money, they eventually moved the management team from Mass to Tennessee. Most of the management team ended up leaving because they did not want to move.

[wartrace]

13. They are keeping upper plant management.

They are just involved in production at this one plant. Some departments didn't get hit at all, some were decimated. Purchasing? Everyone is staying. Quality? Over fifty percent loss. Plant management? Everyone is staying. Engineering? Over 50% loss. Safety & security? Everyone is staying. HR? Everyone is staying or is being placed at other local jobs.
There is another plant nearby that I would be qualified to work at but I am not being allowed to apply due to the jobs there being union and my job at this plant is qualified as staff. Same job/different plant. It's funny that union workers can take a staff job but staff can't go to a union job. As I stated in another post though I feel this is a good thing for me.

[MajorChode]

8. Management always takes care of management

Nothing new there. If they properly managed the plant they probably wouldn't be in such poor financial shape to begin with.

[PassingFair]

14. Yup. P.O.V.

They see things through a different lens.

The peons couldn't possibly understand that
management NEEDS those jobs at those salaries
to keep their standard of living...

They can't go DOWN...!

[Jimbo S]

15. I'm kind of in that position

Things have slowed quite a bit where I'm at, with some temporary layoffs. All staff members have been reatined.

Folks in sales and marketing are here because they are needed to get more sales in this slow period.

Management people are more difficult to find, more expensive to locate and train. Their tasks tend to be company specific. They aren't going to be let go unless it's obsolutely certain their position won't be needed in the future.