Business slowdown: Reduced work week or layoffs?

We have to face facts," Plant Engineer Ralph Cummings told Maintenance Foreman Al Gorman. "With orders off 20%, we can no longer support the current payroll load. We've got people sitting around on their butts." Gorman frowned.


We have to face facts," Plant Engineer Ralph Cummings told Maintenance Foreman Al Gorman. "With orders off 20%, we can no longer support the current payroll load. We've got people sitting around on their butts."

Gorman frowned. He had been expecting this.

"I hate to do this," his boss said. "But we have no choice. We'll have to lay off a couple of men."

"I can't argue with the rationale," Gorman said. "What I'm afraid of is that a layoff could cost us more in the end than we save."

"How do you figure that?"

"The guys on the maintenance crew are all experienced employees. A heavy investment has gone into their training and development. If we let them go, they'll find other jobs. When business picks up it'll cost us a bundle to break in and train their replacements."

"That's good thinking," Cummings conceded. "Which leaves us with only one alternative: Cut the workweek from 40 hr to 35 hr, at least on a temporary basis."

Gorman's face brightened. "That makes good sense to me."

Cummings nodded. "Okay, consider it done."

But when the announcement was posted on the bulletin board that afternoon it triggered a storm of protest.

"We've been on a 40-hr workweek for years," a spokesperson complained. "Management can't unilaterally cut our income like that."

Gorman disagreed. "Management is obligated, and has a right, to act in the company's best economic interests."

The spokesperson threatened to sue.


Question: If the threat is carried out, how would you rate management's chances of winning?

Plant engineer's decision: "The shortened workweek stands," Cummings said. "A 40-hr workweek isn't guaranteed by the labor agreement. Nothing prevents management from cutting it to 35 hr to avoid a layoff."

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Top Plant; 2016 Best Practices on manufacturing progress, efficiency, safety
2016 Product of the Year; Diagnose bearing failures; Asset performance management; Testing dust collector performance measures
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
Big Data and bigger solutions; Tablet technologies; SCADA developments
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
Ensuring SCADA/HMI cybersecurity; Optimize manufacturing value in real-time; Simplifying drive-based and controller-based automation
Tying a microgrid to the smart grid; Paralleling generator systems; Previewing NEC 2017 changes
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me