Question for the business guru's here

[Grandpa Troll]

Im in the Ready Mix Concrete Industry

So as not to violate as anti trust, lets speak in generalities;

Say there are 4 producers with a total of 50 trucks in a market that can handle say 30 trucks.

Now, everyone can comfortably make a living at that level.

But, adding those extra 20 trucks, decreasing the market with residential construction, increase in products and materials F.O.B. as well as variable costs in relationship to employees total package(hourly rate,vacation,insurance,ect.) now greatly reduces the post EBITA bottom line.

So now, companies, in order to keep employees working, cut the selling price by say 13%..but it starts a downward spiral, and before you know it, your facing a very thin R.O.I. as bottom line, so you have to do something, of course you have done all the necessary things up to this point, efficient, staggered start times, cutting off trucks while not loading, minimizing maintenance costs, ect.

Now, i ask you, whose fault is this?

is it the company who is trying to stay afloat by say reducing the workforce by 10 %?

Is it the employees fault for m,aking such wages with no regard to how changing economic times have strapped a company?

or is it the renegade company, who in frantic desperation, tries outrunning the inevitable by slashing deeper price cuts where now it is not making a profit, in hopes of being acquired by another company?

Who wins?

I hear lots of talk by people who bash corporations and companies for not giving raises in these thin times, just asking how would you change these conditions?

Thanks for your input, one and all

[Krill]

In this case I don't think fault should enter the equation. You do what is best for yourself (with a balance between long and short term), without breaking any laws.

People are going to lose their jobs, nothing you can do about it.

[Grandpa Troll]

Originally posted by Krill
In this case I don't think fault should enter the equation. You do what is best for yourself (with a balance between long and short term), without breaking any laws.

People are going to lose their jobs, nothing you can do about it.

Yes, I am in a tooth and nail battle, I keep my employees as informed as possible, I involve them in the process, empower them to help make a difference, things like tire pressure, how that equates to longer tire life and better profitability as opposed to loosing a tire (valued often 350-750 dollars) say 30% early.


We talk of proper maintainence of plant, on equipment, no rejected loads, following specified routes, not wasting resources, anything that we dont have to replace, because I have allways told them, it is easier to save a dollar than to make a dollar.

I have a great staff, I have 46 employees who work for me and we are doing our best with the current conditions we face.

It does often bother me as a human being, knowing that each decision I make has the ripple effect, and so do the decisions the employees make.

Its tough now in these times, fatter times allow a more forgiving business plan, tougher,leaner times tell the truth on how efficient an organization you run.

Gt

[Kidlicious]

It sure isn't the employees fault. They aren't responsible for your company, as you take no responsibility for them.

[Grandpa Troll]

Originally posted by Kidicious
It sure isn't the employees fault. They aren't responsible for your company, as you take no responsibility for them.

Kid, I do take responsibilities for mine, legally as well as personally.

I do my best to equip them so they will be aware.

I also share how they can help keep working by doing various tasks successfully.

Now, those will help but if the work is not their its not and its no ones fault in particular.

But all employees can help contribute to a companies sucess for sure.

GT

[gwillybj]

I experienced a similar situation while working for a commercial-industrial construction contractor. The blame was laid squarely at the feet of the undercutter. The others weathered the foolishness until the undercutter went out of business. There were surprisingly few layoffs among the rest. Everything did return to very near the way it was before, but at a slower rate than the decline.

[Grandpa Troll]

Originally posted by gwillybj
I experienced a similar situation while working for a commercial-industrial construction contractor. The blame was laid squarely at the feet of the undercutter. The others weathered the foolishness until the undercutter went out of business. There were surprisingly few layoffs among the rest. Everything did return to very near the way it was before, but at a slower rate than the decline.

Thats a good point partner, attrition, survival of the fittest.

The question becomes can one holdout through the storm?

Fortunatley, we were acquired by a major International Company so we do have major backing.

We are vertically integrated, so this will really help

[Kidlicious]

Originally posted by Grandpa Troll


Kid, I do take responsibilities for mine, legally as well as personally.

I do my best to equip them so they will be aware.

I also share how they can help keep working by doing various tasks successfully.

Now, those will help but if the work is not their its not and its no ones fault in particular.

But all employees can help contribute to a companies sucess for sure.

GT

If your company would have saved their profits during the good years they could have lowered their prices and not put pressure on your employees now.

[Grandpa Troll]

Originally posted by Kidicious


If your company would have saved their profits during the good years they could have lowered their prices and not put pressure on your employees now.

Well, we reinvest our profits in equipment, plant upgrades, employee benefit packages,incentives, ect.

We are doing well, but one certainly cannot be blinded by ones past and not see the writing on the wall that one must be able to change, adapt and overcome with the future.

I have been the leader in my company for 5 years running on bottom line percentages, so feel we will suffice and now we are in a position to pick and choose where and when to revisit pricing and who to send to our competitors doorsteps, so yes this is a way we can use the knowledge which is wealth, to help protect our employees now

[Kidlicious]

Originally posted by Grandpa Troll


Well, we reinvest our profits in equipment, plant upgrades, employee benefit packages,incentives, ect.

We are doing well, but one certainly cannot be blinded by ones past and not see the writing on the wall that one must be able to change, adapt and overcome with the future.

I have been the leader in my company for 5 years running on bottom line percentages, so feel we will suffice and now we are in a position to pick and choose where and when to revisit pricing and who to send to our competitors doorsteps, so yes this is a way we can use the knowledge which is wealth, to help protect our employees now

It's too late now. Your company already made their choice.

[Grandpa Troll]

Originally posted by Kidicious


It's too late now. Your company already made their choice.

what is too late?

[-Jrabbit]

In general, the company that drops their prices is screwing it up for everybody. They create some cashflow to keep the doors open but without profits, so in the long run they are screwed anyway. Meanwhile, the local market is taught that the value of goods/services is lower than it should be, creating ill will (and fewer contracts) for legitimate operators who do high quality work at a fair price.

Everybody loses.

[Krill]

Originally posted by Kidicious
It sure isn't the employees fault. They aren't responsible for your company, as you take no responsibility for them.

And I thought you were a commie...

[Grandpa Troll]

Originally posted by -Jrabbit
In general, the company that drops their prices is screwing it up for everybody. They create some cashflow to keep the doors open but without profits, so in the long run they are screwed anyway. Meanwhile, the local market is taught that the value of goods/services is lower than it should be, creating ill will (and fewer contracts) for legitimate operators who do high quality work at a fair price.

Everybody loses.

AMEN

[Kidlicious]

Originally posted by -Jrabbit
In general, the company that drops their prices is screwing it up for everybody. They create some cashflow to keep the doors open but without profits, so in the long run they are screwed anyway.

In the long run they can raise their prices again when the economy improves.

Meanwhile, the local market is taught that the value of goods/services is lower than it should be, creating ill will (and fewer contracts) for legitimate operators who do high quality work at a fair price.

Everybody loses.

What is the fair price? In a recession no one is going to pay what they will when the economy is expanding. The fair price that you're talking about means that people lose jobs. Now how is that good for everybody?