CHANGE: THE DOWNWARD SPIRAL OF COMMODITIZATION

We appear to be entering another period of political and economic uncertainty. Where federally-imposed monetary policy is not producing the desired economic growth, rising employment, and investor returns. Add to this a marketplace where both goods are services are becoming commoditized. Where branding, once the shorthand proxy for quality, is rapidly being overcome by abundance, choice, and reduced prices until the brand is almost indistinguishable from the knock-off. Where the prestige or badge value of a particular name no longer serves as a means of status signaling for people who simply don’t care who made your goods or provided services. A trend exacerbated by the outlet stores that sell branded merchandise at reduced prices – even full well knowing that there may be a lower quality of goods found in the outlet stores. Or even worse, finding out that your store’s private label merchandise was made on the same assembly line as the branded version. 

Enter the world of change, where worldwide competition, a wide variety of choices, and overabundance is driving margins and profits lower. 

The traditional method of fighting commoditization such as re-skinning core products, adding product enhancements, and features, lowering production and administrative costs, and reducing customer service is not always enough.  Through platforms such as Amazon, we are awash in the seas of sameness, where other-branded merchandise, often from foreign producers, is available at a lower price point. And, the consumer doesn’t seem to care – particularly when the product cannot be seen by others.

What does this mean for employees? It is time to evaluate your company’s susceptibility to commoditization as management’s preferred response is often to eliminate the product or reduce personnel costs to compensate for declining profits.  

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NO LOVE AT WABTEC — FORMERLY THE GENERAL ELECTRIC TRANSPORTATION DIVISION (12/21/23)

DECEMBER 21, 2023 — FACILITY CLOSURE

Wabtec is laying off 94 employees and the closure of its Wilmerding, Pennsylvania facility, starting in February/March and ending by July 1, 2024.

FEBRUARY 14, 2021 — 40 MORE JOBS LOST IN ERIE, PENNSYLVANIA

A company spokesperson noted, "In response to market realities, the company announced we will reduce our hourly workforce in Erie by approximately 40 employees during the 1st Quarter of 2021.

These decisions are never easy, but necessary in light of current volume realities.

We remain committed to delivering on our customer commitments and providing impacted employees with resources and benefits to manage this transition.”

OCTOBER 16, 2020 — WABTEC PLANNING 150 LAYOFFS IN ERIE, PENNSYLVANIA

According to a company statement, “The freight locomotive market continues to be challenging with carload volume significantly down versus last year and the COVID-19 pandemic continuing to impact communities and the economy. As of October 1, 2020, North American rail carloads and US rail traffic are down roughly 10%, respectively, versus last year, and locomotive parking remains at a high. 

With these continued challenges, Wabtec is adjusting its operations in Erie, PA, to align with today’s volume realities. This adjustment will result in a reduction to our hourly workforce by roughly 150 front-line employees during the fourth quarter. Decisions like this are never easy, but it comes as the result of an in-depth evaluation of the market and how to best position the company for success given today’s unprecedented environment. The company remains fully committed to all customer commitments and providing impacted employees with resources and benefits.”

OCTOBER 21, 2019 — WABTEC ANNOUNCES 100 LAYOFFS IN ERIE, PENNSYLVANIA

In response to a difficult locomotive market, Wabtec has announced that it will be laying off 100 employees in Erie, Pennsylvania.

A company spokesperson noted, “Decisions like this are never easy, but it comes as the result of an in-depth evaluation of the market and how best to position the company for success given today’s cyclical environment. The company remains committed to all customer commitments and providing the impacted employees with resources and benefits. Erie will continue to remain our largest single location with approximately 2,000 hourly and salaried employees.”

FEBRUARY 25, 2019 — DIVESTITURE OF GE TRANSPORTATION COMPLETE

“ Wabtec Corporation announced that it has completed its merger with GE Transportation, a former business unit of GE. This merger establishes Wabtec as a Fortune 500, global transportation and logistics leader by combining Wabtec’s broad range of freight, transit, and electronics products with GE Transportation’s best-in-class equipment, services, and digital solutions in the locomotive, mining, marine, stationary power and drilling industries.  Wabtec has also been notified that it will now be included in the S&P 500 Index. The deal is valued at $11.1 billion. GE retains an investor in Wabtec.

OCTOBER 26, 2018 — GE CONSIDERING DIVESTITURE OF TRANSPORTATION DIVISION

According to published reports in the Wall Street Journal and Bloomberg Financial News, General Electric is considering leaving its railroad business (GE Transportation division) as part of a $20 BILLION divestiture of underperforming assets. GE options include an outright sale, a partnership, or a merger with another entity. This is not the only asset on the table.

AUGUST 27, 2017 — Original Post ... 

General Electric will stop its manufacturing activities at its 125-year-old Peterborough plant leading to the layoff of more than 350 employees by the fall of 2018 to honor existing orders but will retain approximately 50 people to provide engineering services. According to published reports, there has been a significant decline in the global demand for its product. The Ontario, Canada plant produced a wide variety of motors including large engines for oil and mining, diesel locomotive engines, turbines, and hydroelectric generators. The main union representing GE’s workers complains that the company is outsourcing the work to other foreign nations and remains concerned over health claims of previous workers. A union representative was quoted as saying, "Now the company is rewarding the loyalty of the community by pulling up the stakes and moving jobs out of the country."

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? NO LOVE AT DOLE FOODS COMPANY (UPDATED)

UPDATE: SEPTEMBER 20, 2018 DOLE HQ BUILDING SOLD; IN JULY 2018 - 49% OF THE EQUITY IN DOLE WAS SOLD TO A FOREIGN PRODUCE PRODUCER

Dole’s 168,000-square-square foot Westlake Village, California building has been sold to the Conrad Hilton Foundation for $50 million. Dole will lease a portion of the building for its downsized operations.

It is no secret that Dole has been suffering from lagging sales and mounting debt service.

In July, Dole’s owner David Murdock sold 49% of the equity in the company to Dublin. Ireland-based Total Produce, a leading provider of produce to Europe.

UPDATE: The bad news continues for employees at Dole 

Dole has announced another round of layoffs, this time 402 workers as part of a move out of producing strawberries in California. Another layoff will affect more than 268 workers in addition to those mentioned below.

According to a Los Angeles Times article, Dole is “struggling with nearly $1.3 billion in debt, low operating margins and declining revenue.” The company is hoping for a public offering to infuse capital into the company. This initial public offering would be the third time that the public has gone public.

There is renewed talk about moving corporate out of their Westlake Village headquarters to an out-of-state location, possibly Kannapolis, North Carolina where Murdock maintains a residence and is the location of his personally-endowed research institute. 

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Original Post ... 

It appears that Dole Food, the world's largest producer and marketer of high-quality fresh fruit and fresh vegetables, is in the middle of another financial maneuver under the shrewd direction of billionaire David Murdoch.

As part of spinning off a portion of Dole operations to the public, Dole has announced that it will be laying off 172 workers and closing their subsidiaries Dole Berry, DB South, and Dole Fresh Vegetables in Ventura County, California. The impact will be much larger on the local community as Dole will not be hiring the customary temporary farm workers for the picking season.

It has been suggested that Dole is looking to leave farming in Southern California and will possibly be laying off as many as 600 workers in total. 

Notorious tight-lipped about their operations, it appears that Dole has told the Securities and Exchange Commission that they had signed a term sheet to sell their Westlake Village headquarters in a tax-free exchange with one of their affiliates, Castle & Cook Properties.

Since Murdoch has significant real estate holdings in the area, especially his residence at Ventura Farms, it is unlikely that the 94-year-old Murdoch will be leaving the area. Murdoch, a vegetarian, said he plans to live to 125 years-old and considering the amount of money he has invested in the California Health and Longevity Institute located next to his headquarters in Westlake Village, it might even be believable. 

An interesting look at Murdock, his life, and his ideas for better health ...