OT: Companies Must Evolve or Die

[Thomas Rogers]

Now that the subject has you....remember when Kodak was almost dead due to Polaroid, then both companies almost dead due to digital photography....well...



Polaroid is resurrecting itself and at it again, helping to invent a new photo paper and devices that print WITHOUT ink. That means your next digital camera may print pictures themselves, and never need to be reloaded with ink cartridges.



Read more at:

 

[tom prudhomme]

Companies must evolve or die...



"Ford paints it's 2008 fleet without paint."

 

[A K]

The 2009 Sport Trac: Ford teams with Rubbermade to build the first molded, color-injected plastic vehicle! First color is light blue with a dark blue roof!

 

[Johnny O]

This morning's paper says GM is in talks to buy Chrysler from D-B and the stock hit a new high. Maybe it's time to buy some shares of Ford.

 

[Thomas Rogers]

You are probably right, JohnnyO.



It's just further example of market consolidation. There were dozens if not hundreds of American car makers early in the last century. Now we have only 3 major ones, and less than 10 larger makers worldwide. I expect there to be only two or three large auto companies world-wide within 10 to 20 years. Toyota will be in that list I suspect. Will Ford?



TJR

 

[Tom Schindler]

Ford will be in that list. Toyota won't. Just because Toyota is on a roll doesn't mean they will continue on that roll.



Toyota is a young company. They have an uphill battle coming in the next ten years when employees start to retire.





Tom

 

[Johnny O]

Ford will probably end up a division of Toyota.

 

[Thomas Rogers]

Just how young of a company do you think Toyota is, Caymen?



It must be at least 40 years...or more.



I have to think they have had several rounds of retirees already.



TJR

 

[Tom Schindler]

How many retirees in the USA?



How old is Ford? About 104 years old.



Toyota is a baby in the auto industry and is real baby in the USA.



The Japanese economy is not "free" like they are in the USA. There is more legacy for retired workers in the USA than Japan.





Tom

 

[Thomas Rogers]

Caymen,



Maybe the pension plans of Toyota retirees past and present isn't as big a drain on their company as it has been on larger, older US companies (in other words, maybe they have either learned or avoided a costly lesson).



Frankly, I don't know anything about Toyota's pension burden...and it sounds like neither do you.



We should probably do some research instead of speculate and make meritless claims.



TJR

 

[Tom Schindler]

I know more than you think I know. I know more than I am able to explain. Typing was never one of my strongholds, neither is putting my thoughts to words.



Simply put, Toyota and Honda do not have the aging workforce the big three have. One day they will. Human nature, no matter how educated, or brainwashed we get and education is a form of brainwashing, still will see one person benefiting from us but is not willing to give back will end up standing up for themself and demand more.



If I work for a man and he tells me he is able to only pay me 5 buck an hour, yet he drives a Rolls-Royce, lives in a 4 million dollar home, and buys another Rolls for each day of the week, the employees notice that. When it comes time we should get a raise, yet we are told they can not afford it right before he gets a new Ferrari, we will do one of two things. Demand more money, or produce less work.



That is human nature. I have nothing against a man making a living for himself or buying himself nice things. I have a problem with a man making money ALL for himself and not taking care of those that make him what he is.



There was a company in Massilon, Ohio. The CEO appraoched the employees and told them the company was in financial trouble. He asked the employees to give some of the pension back to the company to help bring the company out of its current situation. The employees, steelworkers in case you are wondering, agreed and allowed thatr to happen. one week later, the CEO wrote himself a large "bone-us" check along with the other exectutives and they left town. The pension was gone. Those guys were left with nothing.



I do not have a problem making a sacrifice to help the company I work for. I have a problem making a sacrifice to give the upper managment get a raise in pay.



When you are making $45,000.00/year, 5 grand is a big chunk of money. A CEO making $4.5 mil in bonuses per year isn't going to miss $100,000.00.



Heck, I would be more than happy to get profit sharing checks.





Tom

 

[Josh Langel]

Toyota will be the end of Ford. Ford in 20 years? Get real.

 

[Thomas Rogers]

Caymen...a bunch of musings there, but very little facts.



The reality is that most of the people in this country, working today, do not currently have and never will have a pension; and they learned long ago that a "companies promise" is meaningless.



Gone are the days, and they should have never existed in the first place, IMHO, that a blue collar employee can start a job right out of highschool, work for 25 years, then retire on a pension that gives them full salary. No one was ever worth that, as frankly, it is a benefits program that simply put, cannot scale...it can ONLY scale if a company continues to grow. It's a ponzi/pyramid scam that requires continued growth to survive.



Most companies are smart enough to not even try to deliver a pension these days. I suspect Toyota is that smart and has been that smart for decades...and where they have pensions they are being forced into it. But that's speculation on my part.



I type fast...



TJR

 

[Ryan Schaecher]

The only "pension" I get is my 401(k), which I get to manage.



I don't count on Social Insecurity (I am 36+ years away from collection age).



Pension? HAhahahahahaha! That's a good one. I would bet that Toyota USA doesn't have one. But if they did, I would venture a guess that it is fully funded. Just a guess.

 

[Tom Schindler]

Here is one of Toyota's plants. Here are the benefits they offer...

EXCELLENT HEALTH BENEFITS

You'll discover that NUMMI offers outstanding benefits to regular full-time employees. In fact, they are among the most comprehensive anywhere. Here are just some of the excellent benefits NUMMI offers:

Medical

Dental

Vision

401(K) savings

Retirement Plan

Vehicle Purchase Plan

Tuition reimbursement

9 paid holidays

Paid year-end break

Of course, we realize the best health benefits are those that are never used. So we safeguard our team members' health with extensive safety programs and training.

I found some more info.

Benefits by Design





Toyota Motor Sales, U.S.A. (TMS)'s benefits program, meets the individual needs of each TMS associate.

TMS's benefits include:



Medical/Dental/Vision

Company paid Basic Life Insurance;

Company paid AD&D

Short-term Disability

Long-term Disability

401K Savings Plan

Pension Plan

Paid vacation

Paid Sick & Personal Time-off

Tuition Aid

Leaves of absence

Vehicle/Parts Purchase

Vehicle Lease

Credit Union

Turn Toward Great Benefits



At TFS, our people are the driving force behind our success. Our commitment to our associates is demonstrated in our outstanding benefits package which boasts many no-cost benefits and a generous associate lease program for Toyota and Lexus vehicles. Many of these options can be tailored to suit your lifestyle, familystyle, and workstyle:



HEALTH



Medical Insurance



Eligible date of hire

Some plans are offered at no cost

Indemnity plan or HMO options where available

All plans include prescription drug benefit

Dental Insurance



Eligible date of hire

Some plans are offered at no cost

Indemnity or PPO style coverage

Vision Insurance



Eligible date of hire

Lenses every year, frames every two years

Annual exams

Associate Support and Assistance Program



Eligible date of hire

Provides up to 8 free counseling sessions for associates and eligible family members

RETIREMENT



401K Savings Plan



Eligible date of hire

Company matches 66 2/3 % of the first 6% contributed (maximum 4%)

Many investment options

Rollovers from qualified plans accepted

Pension Plan



Fully funded by Toyota

5 year vesting schedule

Normal retirement age = 62

Early retirement age = 55 with at least 5 years vesting service

INCOME CONTINUATION



Short Term/Long Term Disability



Company paid

Enriched options available

Life Insurance



Eligible date of hire

Company paid Basic Life and AD&D Insurance

Additional associate and dependent coverage available

TIME OFF



Vacation



Accrual begins on date of hire

Accrued proportional to length of service

Holidays



Eligible date of hire

12 or more paid holidays per year depending on location

Year end shut down for most locations

Leaves of Absence



Unpaid personal leaves

Family and Medical Leaves

Military leaves

WORK/LIFE



Flextime (where business allows)



Begin the workday between 7:00 - 9:30 a.m.

End the workday between 3:30 - 6:00 p.m.

Dependent Care Reimbursement Account



Pre-tax spending account for eligible dependent care expenses

Resources & Referral



Eligible date of hire

Company paid

Topics include: prenatal, adoption, child care, schools, emergency care, special needs, summer care, colleges, and adult care

OTHER



Vehicle Purchase and Lease



Eligible date of hire

Available to associates & eligible family members

Access to favorable<

 

[Thomas Rogers]

Caymen



I never said Toyota didn't have a pension plan...I simply said that I doubted they were the same as Fords. Many companies like Ford had pension plans for decades that allowed people to retire with full pension after 25 years. A pension plan that is partial at 55 or full at 62 is far different than that. Companies have learned from past mistakes. I was at IBM when they learned that lesson. They still have a pension program, but you can't really retire on it alone.



As I said, and I stand by it...the traditional full-pay, retirement pension plans are for companies that are "growth companies". Toyota is a growth company. Ford is not. Ford should have done away with theirs decades ago...most pension plans for most companies today should be a stipend at best, something to augment 401K, and SSI, and between the 3, along with other savings, be considered part of a retirement portfolio. Gone are the days, and they should be, that a pension alone is one's retirement fund.



TJR

 

[Tom Schindler]

Toyota is a growth company.

...right now. 2 years from now could be different.



30 and out was a ploy by the employers to move employees out of the company, a type of buy-out, so to speak. Pension plans are not the thorn because they are unable to fund it when promised. They could have funded it at that time. Instead, CEO's got their bunuses and the pension fund was not funded. Now they are paying for it.



It is no different than having a "vacation vund" and planning a trip without actually putting money in that fund. When vacation time comes and you are unable to pay out, who's fault is it. The vacation or yours?





Tom

 

[Thomas Rogers]

Caymen, said:

Pension plans are not the thorn because they are unable to fund it when promised. They could have funded it at that time. Instead, CEO's got their bunuses and the pension fund was not funded. Now they are paying for it.

That sounds good, and makes for a good "CEOs are bad" story, but I suspect most underwater pension funds are caused by bigger problems than greedy CEOs.



The major problem, and you seem to agree with it, is that most pension plans set up 20, 30, 40 years ago assumed company growth and prosperity...not only did they assume it, they counted on it. If the company hit a decade of hard times, if their growth stopped, then went negative, the pension funds became an albatrosse that the company couldn't bear.



Bethlehem Steel is a GREAT example of this.



CEOs can see the handwriting on the wall and can see when that point is that they are crossing over into a company that can't support its pensions IF it continues to decline. But all do what the current employees would want...THEY take on debt and hope to turn things around...and most companies NEVER actually turn things around.



The reality of a big company is that it MUST continue to grow, and often to grow it has to evolve into something different...say like GE has done...or it will die.



For the company that is unable to grow and is unable to change, they reach a point in their decline where IF they want to save the pensions for the current drawers and future vested earners they LITERALLY have to shut off the lights and lock the doors one night and send all current employees packing. That's the only way to guarantee pensions.



For Ford, that would have meant closing the doors in the 70s.



Do you REALLY want that...would you have blamed Ford CEO in 76 if he closed the doors on Ford to protect pension monies?



What you see today are far different pensions, much less money involved...gone are the ponzi scheme pension plans; for the most part. But we will continue to see for the next several decades companies that fold because they can't afford their pension plans.



TJR

 

[Tom Schindler]

All businesses have ups and downs. Ford was in the slumps in the mid 80's. The Taurus turned that around. In the 90's, Ford was selling cars faster than they could build them. 5 of the top 10 selling vehicles were Fords. Toyota and Honda were playing catch-up with Ford. Ford is now in their slump. In a few years, Ford will be selling cars faster than they can build them.



When times are good, you bank money. When times are bad, you invest to make money.





Tom

 

[Thomas Rogers]

True, Ford has had a series of mini-slumps, but the problem is they happen every 10 years or so, and they are progressively getting worse.



Take a look at their stock price, a very good indication of the vitality of a public company, since inception. Ford could die easily in the next 10 years.



TJR