NO LOVE AT SCRIPPS HEALTH

Once again we find a major health care provider, this time famed $2.9 BILLION Scripps Health, engaging in layoffs as part of a reorganization that will address revenue shortfalls and the an uncertain competitive environment. Although Scripps CEO Chris Van Gorder did not cite the number of layoffs that will occur in 2018, he did say that layoffs would happen at an administrative and leadership levels. The health care enterprise employees 15,000 people, 3,000 physicians, and an unknown number of contract personnel.

CEO Van Gorder cites insurance companies reduced contracting rates and the increasing price competition for patients with high deductibles. Also cited was a $20 million budget shortfall, said to be the first indication of trouble ahead and the first such shortfall in the past 15 years.  Troubling, but not catastrophic for a private not-for-profit health care organization that sees a substantial financial revenue stream from its investment portfolio.

“Healthcare is changing rapidly with huge growth in ambulatory care and reduced utilization of inpatient hospitals --- and given the elimination of the individual mandate under the ACA, the uninsured will once again be growing nationally. It’s important that healthcare organizations proactively change to address these changes and Scripps is doing so with a major restructuring of our organization to (1) reduce costs for our patients; (2) increase the quality of our services even though they are already strong, and; (3) improve our patient experience in both our hospitals and our many ambulatory sites of care. Our organization remains strong financially as we prepare to spend more than $2.6 Billion to improve our facilities and comply with the State Seismic Safety Act – SB 1953 – but changes will be required to maintain that strength and, at the same time, find a way to lower our costs for our patients now and in the future. The changes we are making now will involve our leadership and administrative services. We are still hiring patient care givers.” <Source>

Scripps Health unveiled their new multi-billion dollar master plan in November, 2017 which represents the largest building program in the health care system’s 125-year history and triggers significant construction projects at its hospital campuses across San Diego County (California). According to Van Gorder, the master plan projects will be financed by operating revenues, borrowing and philanthropy. “We are thankful for that. We don’t receive government funding for these projects. It’s the generosity of grateful patients and others that has made us what we are today, and it will be that generosity that will shape us into who we become in the future.” Most of the construction will take place to address seismic replacements and retrofitting to meet state earthquake standards. In January, 2017, Scripps notified the State of California of its intent to borrow $168.5 million under the auspices of the California Health Facility Financing Authority with loan maturities up to 40 years. This program provides a borrower with access to low interest rate capital markets through the issuance of tax-exempt and taxable revenue bonds.

NO LOVE AT ARCELORMITTAL (UPDATED 07/28/20)

AUGUST 1, 2020 — 877 LAYOFFS IN EAST CHICAGO, INDIANA

The company has announced that it will be laying of 877 employees at its East Chicago, Indiana plant.

The decision was driven by the reduced demand for the company’s steel products due to the COVID-19 pandemic and the overall economic depression.

JULY 28, 2020 — 425 LAYOFFS IN CLEVELAND, OHIO

Commencing on August 1, 2020, the company is planning to layoff 425 employees at its Cleveland, Ohio integrated steelmaking mill on indefinite layoff.

"Due to additional and unforeseen deterioration in the market for our products, the Company is now required to institute indefinite layoffs of represented employees and certain terminations among salaried, unrepresented employees.

"We expect that these layoffs will be indefinite, and we cannot predict their duration at this time, although we now expect that they will last longer than six (6) months.

AUGUST 22, 2019 — WEIRTON, WEST VIRGINIA LAYOFFS

The company has announced the layoff of an estimated 100 employees at its tin plate mill located in Weirton, West Virginia.

According to a company spokesperson, the decision was in response to changing market conditions including reduced crop production and canning activities.

Original Post…

Once again the debate over steel imports comes to the forefront as ArcelorMittal announces the layoff of 150 positions in its Conshohocken, Pennsylvania mill claiming declining revenues brought about by unfair foreign competition.

Management has looked to Washington, D.C. to solve part of its problems by instituting protective tariffs to protect domestic worker’s jobs from unfair competition in the form of dumping where steel and steel products are sold below their production costs and at an artificially low price.

However, some economists point to the alternative benefits to be found in the redistribution of jobs as lower government infrastructure costs offset the loss of jobs in the steel industry with increases in jobs related to the build-out of government infrastructure.

Others point out the obvious, that any tariff imposed on steel importation is simply an additional tax on the American people, in the form of higher prices or the tariffs being paid ultimately by the end user. Of course, government loves tariffs which they pocket and use for their special interest projects or to purchase additional political support by directing the construction of projects in their own political districts or states.  

The Trump Administration has promised to bring steel production and jobs back to America, somewhat hypocritically as Trump used foreign construction materials in his skyscrapers precisely because it was cheaper. And, in many cases, used pre-stressed concrete instead of steel in his buildings. And, it should not be forgotten that America’s domestic inability to produce sufficient steel for military applications can be a national defense issue.

But the problems faced by the steel industry are not limited to price protections. The declining use of steel itself is a major issue as new composite carbon-fiber materials are lighter and stronger than steel. Global over-capacity, especially in nations without strict environmental controls, is another major issue. And, let us not forget the ongoing standardization of steel specifications allowing for online business-to-business bidding, the increasing use of robotics in dangerous environments and the on-demand pre-processing of steel products using expert machine-guided tools also translates into fewer steelworkers.

Steel will remain a significant structural component, but it appears that the days of the well-paid, unionized steelworker may have gone the way of the well-paid worker in the automotive industry, one of steel’s largest customers.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

AM I NEXT? CALIFORNIA: A HOSTILE BUSINESS CLIMATE?

WILL TESLA BECOME ANOTHER DETROIT-STYLE TRAGEDY?

Once again, a commercial enterprise may be deliberately coerced into supporting the political agenda of the self-serving politicians who are selling their political votes in return for campaign contributions, media attention, and voter support.

In this instance, we see the California legislature possibly trying to coerce California’s last automaker, Tesla Motors, which requires massive government subsidies to exist, into becoming the type of unionized environment that destroyed the automobile industry in Michigan.

For those who do not know where to look, the California Legislature has ignored the fact that Tesla’s workers are paid well-above unionized wages and has slipped language into the specious “cap and trade” bill that was designed to fight global warming – although no scientific institution or individual scientist can accurately find man’s climate signal among the noise of climate’s natural variability.

California Legislature has passed A.B.134, legislation that directs $900 million in funding from the state’s climate taxes to support various clean transportation, clean air, and alternative fuel initiatives. In order for Tesla, or any other California automobile manufacturer to be eligible for California’s $140 million Clean Vehicle Rebate Project subsidies, it must prove to some as yet non-existent state entity that they are “fair and responsible in the treatment of their workers" before their vehicles can be eligible for the rebates. Many believe that “fair and responsible” are code words for unionization.

Instead of a benefit to workers, California is once again signaling other manufacturers that spending millions to create a plant in California is tantamount to appointing the union as the overseer and contractual arbiter of labor relations – including the possibility of continually rising wages and benefits with little or no corresponding increases in productivity or plant efficiencies. Thus increasing the labor component of each vehicle and/or part sold to the public. With the advent of increased competition of other non-California automakers, this power grab may represent a long-term existential threat to Tesla and an impetus to move Tesla’s operations to Nevada.

There is little or no doubt in my mind that Tesla has little more to offer than superb design since it’s battery technology and manufacturing processes are well-known to other larger and better-financed automakers currently operating in the mass market. Let us not forget that Tesla’s miles-per-charge in software controlled and is part of the price-point calculation; and that batteries perform poorly in cold or extremely hot environments. The use of electric vehicles for extended trips makes little sense because no matter how fast the vehicle may go in tests, the driver still must spend significant time re-charging the vehicle at limited charge stations – paying increasing amounts as electricity prices are regulated upward to produce tax revenues lost at conventional tax pumps.

In the final analysis, why would any productive worker want their company to reward seniority over merit, the status quo over innovation, thuggery over the discussion, and the featherbedding of jobs to increase union membership? Why would any company accept such political and social engineering if the company was growing, profitable, and able to exist without government subsidies?

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?