Chiawei From United States of America, joined Nov 2000, 890 posts, RR: 2 Reply 2, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 5480 times:
The entire economy tanked because of outsourcing to countries like China/India. US economy can't be based on service sectors alone. Any manuf. job lost would translate to real loss in economic output and spedning power that job brings. So there are less people who can afford to travel.
This plus rises in fuel cost. Means that even established airlines like WN has begun to cut employees.
Unless idiot in washington realize that outsourcing does economy no good (as people can't be retrained easily, nor the pie is big enough in service industry), US economy will not be able to get out of the hole. Even though there appears signs to recovery. It is superficial at best.
BoingGoingGone From , joined Dec 1969, posts, RR: Reply 3, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 5370 times:
The significant increase in worker productivity is what is keeping unemployment as high as it is (even though it isn't that high - I know of a few countries with 10% unemployment), so I'm not sure why you are so freaked about the new "catch all phrase" outsourcing. Most outsourcing in the US is actually kept stateside. Why pay someone $25 an hour to drop a cable in the groudn when a contractor can do it for $10? Outsourcing pretty much helps companies fill positions that people don't care to work in anymore.
MoodyBlues From United States of America, joined Dec 2003, 142 posts, RR: 5 Reply 4, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 5293 times:
That's like 90% of Southwest's work force.
Something tells me you read that wrong, a link to the article would be nice.
Been too busy to stay in the loop the last few weeks (month) but WN was profitable last quarter, although bitching about the foul costs, which I suppose affect them even though the say they are hedged through 2004
(Don't fully understand the hedging thing, if someone knows and can explain, it would be appreciated)
If this is true however, I hope that WN does not have a layoff... The first one in company history would not be a good landmark. But as far as I knew, Philadelphia was doing well, and load factors were acceptable though not great (Like I said, I've been out of the loop)
Been seeing a lot of -700s coming into PBI w/ winglets though, which means the planes are going in for service upgrades, not something I would think they would do if they were tight on cash, although maybe the fuel savings are worth it. But that's another topic.
Good luck to all the airlines, and their employees... These are still tough times
JBirdAV8r From United States of America, joined Jun 2001, 4472 posts, RR: 21 Reply 5, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 5258 times:
I believe MaverickM11 meant to say non sequitur; he basically said that your statement was the most nonsensical nonsense he'd ever heard. It was grammatically atrocious, I know, but it was a better attempt than I've seen from most users.
The idea is to unload peopel near retirement to reduce the average hourly pay received by employees. It's cheaper to put them on the (already funded) retirement dole with benefits that it is to pay them top dollar and benefits. If your young and want to work at SWA, they'll be hiring all the positions unloaded through this.
MaverickM11 From United States of America, joined Apr 2000, 16499 posts, RR: 48 Reply 9, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 5076 times:
"The entire economy tanked because of outsourcing to countries like China/India"
That's laughable. Outsourcing had little, if ANYTHING to do with the current economy. The reason the economy has been down is:
1) The largest bubble in history burst under Clinton.
2) A recession was already well underway by the time the Bush administration started.
3) Terrorist attacks of 9/11
4) War in Afghanistan
5) ANOTHER war in Iraq.
Add to that depressing yields, increased low-cost carrier market share, and increasing fuel prices, and you get a weak revenue environment for the airlines, and thus Southwest's (and everyone else's) problems. Outsourcing has had nothing to do with it. America is a net benefactor of outsourcing, and of those who are unemployed, about 1% of them are victims of outsourcing.
"he basically said that your statement was the most nonsensical nonsense he'd ever heard. It was grammatically atrocious"
It is gramatically just fine, thanks. I mispelled a word, but you got the meaning wrong. Non sequitur does not mean nonsense (although that would correctly describe it), but an ill-conceived conclusion, or a fallacious syllogism.
MaverickM11 From United States of America, joined Apr 2000, 16499 posts, RR: 48 Reply 11, posted (9 years 6 months 2 weeks 3 days 18 hours ago) and read 4983 times:
"US economy can't be based on service sectors alone. Any manuf. job lost would translate to real loss in economic output and spedning power that job brings."
Just like all the horrible effects of the steam engine, the cotton gin, the moving assembly line, the car, the airplane
"So there are less people who can afford to travel."
Wrong. Household wealth is greater than it's ever been in the US. Passenger enplanements are at or greater than 1998 numbers precisely because more people can afford to travel. This is good for the consumer but not good for the airlines.
Highliner2 From United States of America, joined Nov 2000, 694 posts, RR: 1 Reply 12, posted (9 years 6 months 2 weeks 3 days 17 hours ago) and read 4952 times:
In a nutshell, hedging fuel means purchasing it ahead of time at the current price.
Think of it this way, let's say last year when gas was only around $1.60 a gallon you bought all the gas you'll need to run your car THIS year. So even though gas in over $2 a gallon now, you still pay $1.60 because of the contract you signed with the oil company. Southwest purchased their jet fuel at whatever cost it was at the time they bought it, which was at least a year ago when fuel prices were'nt AS bad. That's why the fuel prices haven't hurt them as much, they're still essentially paying the prices from awhile ago. Also, as I understand it, US Airways and United were not able to hedge their fuel because your not allowed to due so when under bankruptcy protection. US Airways is out of bankruptcy so I do not know if they are trying to do so now. Anyone feel free to correct me if I'm wrong, this is just a real basic explanation.
N79969 From , joined Dec 1969, posts, RR: Reply 14, posted (9 years 6 months 2 weeks 3 days 17 hours ago) and read 4837 times:
In additon to faulty analysis, your factual information is incorrect. The US has been a service economy for years. Manufacturing has been moving out of the US since the 1950s, yet the country is far wealthier now than it was when we were still assembling televisions, vacuum tube radios, and cameras.
The unemployment rate is about 5.6% which is not bad taken in a historical context. In the long run, the US economy will benefit from offshore outsourcing despite the all-too-real pain for those losing their jobs today.
All the airlines are screwed to some degree because they are facing a huge spike in fuel costs but lack the (legal) means to make a fare hike stick. They are almost out of places to cut costs.
LJ From Netherlands, joined Nov 1999, 4327 posts, RR: 0 Reply 16, posted (9 years 6 months 2 weeks 3 days 17 hours ago) and read 4784 times:
Also, as I understand it, US Airways and United were not able to hedge their fuel because your not allowed to due so when under bankruptcy protection.
Like Highliner2 explained when you hedge your fuel consumption you agree with a party (most likely an oil company) that you can buy x number of gallons (sometimes called "forward contracts"). However in order to able to conclude the contract the oil company must be certain that you'll buy the agreed number of gallons. However, if your credit rating is saying you're bankrupt (or are going to be) nobody will enter an agreement with you over a long period. Furthermore, hedging isn't free (is costs money) as the oil companies (or other parties) want to make a profit for themselves.
Dvk From United States of America, joined Jun 2000, 1058 posts, RR: 1 Reply 18, posted (9 years 6 months 2 weeks 3 days 17 hours ago) and read 4666 times:
Back on track, I heard the WN announcement on NPR this morning. The explanation for the incentives was that, due to improved technology, fewer workers are needed, and it was emphasized that layoffs are NOT planned.
Maverick, please provide proof of your 1% claim regarding job loss due to outsourcing. While it is by no means the primary source of rising unemployment, it is a legitimate concern that more and more jobs that are not disappearing due to better technology are being shipped overseas.
Increased worker productivity is NOT what is keeping unemployment high. Increased worker productivity is due to ever increasing expectations placed on workers who remain after management has decided to trim the workforce. "Improved productivity" has come at the price of employed Americans working longer hours than workers from most other developed countries, and doing so without a commensurate increase in income.
Finally, I love it when Republicans "mispell" "misspell".
I'm not dumb. I just have a command of thoroughly useless information.
...statisticians reckon that outsourced jobs are responsible for well under 1% of those signed up as unemployed. And the jobs lost to outsourcing pale in comparison with the number of jobs lost and created each month at home...
"Finally, I love it when Republicans "mispell" "misspell"."
I HATE it when people here make assumptions about others when they know barely more than their screename.
Av8trxx From United States of America, joined Nov 2001, 657 posts, RR: 7 Reply 20, posted (9 years 6 months 2 weeks 3 days 16 hours ago) and read 4510 times:
"Just read that WN is offering buyout package to 33,000 workers.
With economy still in a slump, even profitable company such as WN are beginning to let people go.
Outsourcing really is a drain on U.S. economy."
Yes, of 34,000 employees 33,000 of them are eligible to take advantage of this voluntary early retirement offer. They aren't "letting people go"- unless they ask for it that is. Also, while 33,000 may be eligible to take advantage of the program, that does not mean that many will. The three packages offered include varied levels of time limited medical coverage (1-3 years) and either $500, $750 or $1,000 for every year of service as a severance, plus some flight benefits too (which are also time limited depending on your age & seniority). So as you can see, this program does not benefit all that many people unless they have another career lined up or are already independantly wealthy!
There were two other topics about this already. Also, WN is not outsourcing, so that statement has nothing to do with the "Freedom '04 Early Retirement" program. Offering such a program helps cuts future costs, enabling continued profitability. This is by no means "the beginning of the end".
Chiawei From United States of America, joined Nov 2000, 890 posts, RR: 2 Reply 22, posted (9 years 6 months 2 weeks 3 days 15 hours ago) and read 4260 times:
Sorry. This is simply not true.
The oursourcing has dramatic effect. US economy although heavily involved in moving sector does not mean it does not have a significant manuf. sector.
Productivity is not what is keeping employment low. Company after the bubble burst are very reluctant to add to payroll in US. The fact that productivity rose is simply because more people are now required to do the more jobs. What you call a productivity increase is actually putting more work onto less employee. In other words, employers are now working their employee harder with less pay and benefit.
If the company found that they could not push more jobs under american's throat. They hired cheaper labor from other country or send jobs off shore. Yes the productivity is higher on paper. Because work is now getting down with less cost. But it has no benefit to American economy as consumer like us are either working much harder or without jobs.
Let me give you a quick example. Suppose an IT worker here can earn $100k a year. That 100K that could be used here in US to consume goods. For example he can buy a caddilac for $60,000.
However by sending this job to country like china or India. The same worker is making probably $20,000. He would never be afford to buy a $60k cadillac. So even though company A saved $80,000 on paper, the US economy lost a worker that could by more expansive goods. Yes there are $80,000 saving in labor cost. But often labor cost less than 20% of cost of goods. Hence, the saving brought on by lower labor cost when passed onto consumer is low.
Therefore, my argument would be that the real loss in consumer purchasing power from shifting jobs to lower cost country outweighs the benefit of lower cost of goods. Therefore the entire world economy suffers.
Yes, i know about theory of equilibrium. However, country like china has a fixed monetary policy. Hence the equilibrium will never be reached.
I am no economist. But I did have an economic degree with a master in business as well (although I am actually an engineer by trade).
Everyone can have their opinion. But at least the current status of economy would probably support my view better.
And yes, the less amount of people that works here, means less demand on business travel. Which will in turn lead to cut down in leasuire travel as well.
Bicoastal From , joined Dec 1969, posts, RR: Reply 23, posted (9 years 6 months 2 weeks 3 days 14 hours ago) and read 4189 times:
So if the USA doesn't outsource, then I suppose that means other countries shouldn't outsource to us. Kiss goodbye those high paying jobs in the USA from Honda, BMW, Mercedes, Toyota, Bombardier, Shell Oil, BP, Siemens, Phillips, Nokia, even Airbus, etc., etc. I'm sure the American workers in those companies would just love to have their jobs pulled back to Canada, Japan, Netherlands, Germany, Finland, etc.
Outsourcing and insourcing are here to stay. The best thing for the global economy is to keep government out and let the jobs go where they make most economic sense.
Dvk From United States of America, joined Jun 2000, 1058 posts, RR: 1 Reply 24, posted (9 years 6 months 2 weeks 3 days 14 hours ago) and read 4149 times:
Lighten up, Maverick. I should have been an English teacher. Nevertheless, your source provides nothing other than an offhand reference to what "government statisticians" say. It's hardly convincing. Correct me if I'm wrong, but your earlier post (re:the bubble burst under Clinton and the recession being "well underway" by the time W took over), and your assertions throughout this thread, have very strong Republican overtones. If you're not a Republican, I stand corrected.
I'm not dumb. I just have a command of thoroughly useless information.
25 Bnatraveler: Back to fuel hedging... SWA can also hedge the cost of fuel by purchasing a forward contract on a related good that typically moves in the opposite, o
26 Usatoeze: Productivity is not what is keeping employment low. Company after the bubble burst are very reluctant to add to payroll in US. The fact that productiv
27 Bnatraveler: A bit more information on fuel hedging wrt SWA from their most recent 10-Q Fuel Contracts - Airline operators are inherently dependent upon energy to
28 Dl021: coming in late...but I think Mav's got a point. Chiawei will not be persuaded by logic or reason so Maverick and usatoeze and bicoastal are kind of bu