Figure exceeds previous annual cost-cutting target by $25 million
http://trn.trains.com/news/news-wire/2017/02/28-csx-savings
Brian Schmidt, Editor, Classic Trains magazine
The brain drain begins. (at least on the engineering side, they are already hurting...)
Brian SchmidtFigure exceeds previous annual cost-cutting target by $25 million http://trn.trains.com/news/news-wire/2017/02/28-csx-savings
Basing 'savings' on payroll value overlooks the economic benefits to a company that a employee brings to making a bottom line profit.
Does 'saving' $175M annually do that or does it cost the company $350M as the employees are no longer there to add the 'value added' component that is why any employee exists in a company.
Calculating 'savings' on employees that work with their minds discounts that their minds have any value at all.
E. Hunter Harrison's 'mind' is not worth the value he is trying make CSX pick up the tag for.
Never too old to have a happy childhood!
If they want to find real savings they might try looking at highly overpaid Executives. But the CSX board (like most all boards) is composed entirely of such people to begin with. Not one of them thinks he's overpaid.
No, it's always teachers, laborers, firefighters, sanitation workers, HVAC workers, road crew workers, trainmen, conductors, dispatchers, etc. who are considered overpaid by board members. Never Executives.
BaltACD Brian Schmidt Figure exceeds previous annual cost-cutting target by $25 million http://trn.trains.com/news/news-wire/2017/02/28-csx-savings Basing 'savings' on payroll value overlooks the economic benefits to a company that a employee brings to making a bottom line profit. Does 'saving' $175M annually do that or does it cost the company $350M as the employees are no longer there to add the 'value added' component that is why any employee exists in a company. Calculating 'savings' on employees that work with their minds discounts that their minds have any value at all. E. Hunter Harrison's 'mind' is not worth the value he is trying make CSX pick up the tag for.
Brian Schmidt Figure exceeds previous annual cost-cutting target by $25 million http://trn.trains.com/news/news-wire/2017/02/28-csx-savings
Thanks to Chris / CopCarSS for my avatar.
Johnny
DeggestyI do not comprehend how anyone could be so valuable as Mr. Harrison makes himself out to be. WIll he do the work that actually brings revenue in?
No, he will do work that will raise the price of the stock so investors and brokers will make money.
Yes, who cares about the grunts that make the income possible?
DS4-4-1000 Deggesty No, he will do work that will raise the price of the stock so investors and brokers will make money.
Deggesty
A bubbler! Big Time investors & Brokers - as stupid as fish looking for a bubble.
Very good point and often forgotten by the bean counters and the financial media. Unless these folks were simply sitting on their hands and contributing zilch, those savings are way overstated. I've been through something like this too.. in retrospect was funny as I received a performance bonus check only hours prior to my layoff.. Not so funny because that was also the day I closed the deal on my first house.. lots of fun moving into a house without a job to pay for it. Glad I'm nolonger part of the corporate BS!! Hopefully these people land on their feet..
The 1,000 employees being terminated by CSX are managers, although the article did not say what level managers. I suspect many of them are middle and higher up managers. Also, many of them probably are in support functions.
Managers rarely generate revenues directly or contribute directly to the bottom line. And they certainly don't run trains. Many of them are dispensable when it comes time to prune the organization. Every organization gets fat over time; pruning is necessary to shape it for a different economy.
Most managers understand they are vulnerable. It is a risk that goes with the job. Most of us understood the need to keep our skills sharp so that if we lost our job we would be a good prospect for another employer.
In most instances managers who lose their jobs, at least the good ones, find another one that is as good as or better than the one they lost. At least that was my experience, which admittedly was restricted to the world of finance.
Rio Grande Valley, CFI,CFII
JPS1The 1,000 employees being terminated by CSX are managers, although the article did not say what level managers. I suspect many of them are middle and up managers. Also, many of them probably are in support functions. Managers rarely generate revenues directly or contribute directly to the bottom line. And they certainly don't run trains. Many of them are dispensable when it comes time to prune the organization. Every organization gets fat over time; pruning is necessary shape it for a different economy. Most managers understand they are vulnerable. It is a risk that goes with the job. Most of usunderstood the need to keep our skills sharp so that if we lost our job we would be a good prospect for another employer. In most instances managers who lose their jobs, at least the good ones, find another one that is as good as or better than the one they lost. At least that was my experience, which admittedly was restricted to the world of finance.
Managers rarely generate revenues directly or contribute directly to the bottom line. And they certainly don't run trains. Many of them are dispensable when it comes time to prune the organization. Every organization gets fat over time; pruning is necessary shape it for a different economy.
Most managers understand they are vulnerable. It is a risk that goes with the job. Most of usunderstood the need to keep our skills sharp so that if we lost our job we would be a good prospect for another employer.
Two things.
Mid level and higher managers are the ones that police bringing revenues to the bottom line as well as creating opportunities for those revenuse to be earned. They may not generate the revenue they just see that the revenue remains productive for the company on it's way to the bottom line.
Historically managers worked their way up the ladder, from craft or entry level non-contract positions to where they presently are. Those with craft seniority have the ability to 'return to their tools' if they so desire. Those that were hired as non-contract are out on the street.
The thing that I have seen time and again, those that are eliminated in the progroms come back as 'contractors' being paid more than they were when they were employees - of course 'the company' is no longer on the hook for all the other costs that are associated with being a 'employee'. The shell game of finance.
They come back as contractors until the government comes back to tell the employer they're not contractors but employees. Contractors can't be managed like employees as they work for themselves.. So many employers have fallen into this trap over the years.. they see a big benefit to reclassifying people as contractors only to discover (usually through a big fine and retroactive payroll tax deductions) they can't do that.
UlrichThey come back as contractors until the government comes back to tell the employer they're not contractors but employees. Contractors can't be managed like employees as they work for themselves.. So many employers have fallen into this trap over the years.. they see a big benefit to reclassifying people as contractors only to discover (usually through a big fine and retroactive payroll tax deductions) they can't do that.
I can assure you that CSX has perfected the exercise and operates inside (JUST inside) of the legal requirements.
Ulrich They come back as contractors until the government comes back to tell the employer they're not contractors but employees. Contractors can't be managed like employees as they work for themselves.. So many employers have fallen into this trap over the years.. they see a big benefit to reclassifying people as contractors only to discover (usually through a big fine and retroactive payroll tax deductions) they can't do that.
I remember seeing an IRS form to fill out in order to know if you are an independent contractor or an employee. It was about 45 questions, with many of them requiring a narrative form of answer.
Deggesty Yes, who cares about the grunts that make the income possible?
This should be a textbook example of how overvalued much of management actually is.
C&NW, CA&E, MILW, CGW and IC fan
NKP guy If they want to find real savings they might try looking at highly overpaid Executives. But the CSX board (like most all boards) is composed entirely of such people to begin with. Not one of them thinks he's overpaid. No, it's always teachers, laborers, firefighters, sanitation workers, HVAC workers, road crew workers, trainmen, conductors, dispatchers, etc. who are considered overpaid by board members. Never Executives.
+1
Now management gets to experience what all the other crafts have over the past few years- day-to-day wondering if you have a job or not.
rockymidlandrrNow management gets to experience what all the other crafts have over the past few years- day-to-day wondering if you have a job or not.
You ain't never been in management, so I take it.
I recall the day the VP Intermodal got fired with no notice, but...
There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying.
This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it.
rockymidlandrr Now management gets to experience what all the other crafts have over the past few years- day-to-day wondering if you have a job or not.
It's the "new normal". I for one have been working on straight commission for some 20 years now, At least on commission one always knows where one stands.. no sale.. no commission. I don't miss the false security of a management position in a large company.
greyhounds rockymidlandrr Now management gets to experience what all the other crafts have over the past few years- day-to-day wondering if you have a job or not. You ain't never been in management, so I take it. I recall the day the VP Intermodal got fired with no notice, but... There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying. This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it.
Of course that totally ignores trends towards "golden parachutes" and other incentives and bonuses given to failed executives above middle management.
schlimm greyhounds rockymidlandrr You ain't never been in management, so I take it. I recall the day the VP Intermodal got fired with no notice, but... There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying. This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it. Of course that totally ignores trends towards "golden parachutes" and other incentives and bonuses given to failed executives above middle management.
greyhounds rockymidlandrr You ain't never been in management, so I take it. I recall the day the VP Intermodal got fired with no notice, but... There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying. This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it.
rockymidlandrr
Those being let go by CSX are far from Golden Parachute territory.
No golden parachute for middle managers.. only lead bricks.
Ulrich No golden parachute for middle managers.. only lead bricks.
I said above middle management.
BaltACDThose being let go by CSX are far from Golden Parachute territory.
Not too far. Silver parachute, then? These terms are pretty good:
"The laid off employees will be eligible for severance pay that equals two times their base salary, plus their target bonus and a prorated bonus payment. They also will be credited with three additional years of age and two additional years of service under the company pension plan."
schlimm BaltACD Those being let go by CSX are far from Golden Parachute territory. Not too far. Silver parachute, then? These terms are pretty good: "The laid off employees will be eligible for severance pay that equals two times their base salary, plus their target bonus and a prorated bonus payment. They also will be credited with three additional years of age and two additional years of service under the company pension plan."
BaltACD Those being let go by CSX are far from Golden Parachute territory.
That's a good severance package. With a payout like that there are probably some unhappy faces among those who weren't let go.."please pick me.. I've been a low flyer for years..totally useless..what's a train anyway?.."..
Ulrich- good one! Funny.
That is a very good severance package. I would take that package all day every day...
BaltACD schlimm greyhounds rockymidlandrr You ain't never been in management, so I take it. I recall the day the VP Intermodal got fired with no notice, but... There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying. This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it. Of course that totally ignores trends towards "golden parachutes" and other incentives and bonuses given to failed executives above middle management. Those being let go by CSX are far from Golden Parachute territory.
Sort of a combination of a 'One-Two Punch' for those who have risen by "The Peter Principle", and then fall because their 'parachute' had no shroud lines. [A failure to read small print in Employment Contract?]
A relevant definition: " An Executive- One who is able to take a very long Lunch, and not effect anything, while out..."
samfp1943 BaltACD schlimm greyhounds rockymidlandrr You ain't never been in management, so I take it. I recall the day the VP Intermodal got fired with no notice, but... There was also the day the six sales territories were downsized to three sales territories. They called three sales territory managers up to Chicago without telling them why. The "Why" was that they were fired. On the spot. I remember one of them crying. This is the way she goes. If you can't stand the heat get out of the kitchen. It's happened to me. Not at the railroad, I quit there. But it's part of life and people have to deal with it. Of course that totally ignores trends towards "golden parachutes" and other incentives and bonuses given to failed executives above middle management. Those being let go by CSX are far from Golden Parachute territory. Sort of a combination of a 'One-Two Punch' for those who have risen by "The Peter Principle", and then fall because their 'parachute' had no shroud lines. [A failure to read small print in Employment Contract?] A relevant definition: " An Executive- One who is able to take a very long Lunch, and not effect anything, while out..."
I wonder how many folks have received or know someone who received such a generous package? "severance pay that equals two times their base salary plus......"
schlimm I wonder how many folks have received or know someone who received such a generous package? "severance pay that equals two times their base salary plus......"
I know quite a few.
An "expensive model collector"
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