If you wonder why Ford is in such big trouble—besides its bloated workforce, gigantic union-driven legacy costs and inability to make cars anyone really wants to buy—look no further than today’s news that every Ford worker will be getting a bonus despite the company’s $12.7 billion loss last year.
The bonuses are relatively modest—$500 for UAW members, $300 to $800 for non-management salaried workers and slightly higher amount for managers, according to the Detroit Free-Press—but it still begs the question: How can a company that lost billions of dollars afford to give bonuses to the entire workforce?
Ford’s reorganization attempt, called the “Way Forward,” clearly is not working. New CEO Alan Mulally, who did such a great job at Boeing, is doing all that he can to keep the workforce engaged and motivated while reorganizing the company.
But how do bonuses to every single person in Ford’s workforce square with a more than $12 billion dollar loss? Mullay sent an e-mail to Ford workers telling them, “Because we did not accomplish all of our objectives last year, the awards will be modest. Still, we want to recognize and reward your accomplishments, because you made vital contributions to our future.” UAW president Ron Gettelfinger was equally delusional in his statement to his membership, saying, “With today’s announcement of bonuses for all Ford workers, the company has recognized the hard work and dedication of UAW-represented hourly and salaried workers.”
To be fair, I do believe that Ford’s workforce is dedicated and hardworking. I also don’t doubt the vital contributions they are making to Ford. But clearly, workforce bonuses to every single worker in the face of billions of dollars in losses is a failed and bankrupt strategy in any business environment. The statements by CEO Mulally and UAW president Gettelfinger are not only delusional, but as futile as bailing water from the Titanic. No wonder Toyota is cleaning Ford’s clock.
Delta Airlines, like so many U.S. air carriers, has had a tough time the last few years. Today, however, things seem to be a little bit better. CEO Gerald Grinstein announced that Delta employees will get both pay raises and a “significant” stake in company stock when the airline emerges from bankruptcy later this year.
Grinstein is reportedly well-thought of by rank-and-file Delta employees, and he clearly needs to deal with the morale of the workforce since most non-union Delta employees had their pay slashed by 20 percent, their benefits cut, and pensions frozen in the scramble to reorganize the airline under Chapter 11.
But here’s the spin: CEO Grinstein wrote to employees this week that “this will be the first time ever on so large a scale that a company emerging from bankruptcy has awarded stock to nonunion employees.” He also said that the pay raises will help to get Delta employees “toward an industry standard pay structure… with the first pay increases coming this summer.” This all sounds good, but as the Atlanta Journal-Constitution reports today, Grinstein’s plan is “short on specifics”—meaning that without solid details, it is all subject to change.
And the real news in the Journal-Constitution story is this: “Delta’s message about the widely rumored employee perks could be timed to head off potential complaints once the carrier unveils details of executives’ and managers’ compensation in about two weeks. About 1,000 leaders will also be granted ownership stakes in Delta, but those shares will come in different forms, such as restricted stock, stock options and performance stock …Delta’s management has been treading carefully around the executive pay issue as it has tried to rebuild employee morale damaged by years of job cuts, falling pay and a 2003 controversy over executive pensions and bonuses that angered many workers.”
It may be that Gerald Grinstein is trying to head off any potential problems workers may have with the compensation package for managers and executives by preemptively announcing what he is going to do for the rest of the workforce. By keeping a lid on the specific details, he can later sweeten what he gives rank-and-file workers if reaction to what the managers are getting gets too heated.
In short, Grinstein gets a PR victory and warm fuzzy feelings from the workforce without really having to show all his cards. It’s the mark of a smart, seasoned executive who effectively keeps all of his options open until he is absolutely forced to commit.
Rusty Weston, the guy behind the new My Global Career 500 list of top global employers, had some feedback to my comments here last week about the usefulness of his new list. His response doesn’t change anything that I wrote, but he does deserve an opportunity to have his say:
Hi John,
Thank you for writing about My Global Career 500. If I were able to post a comment in reply to your blog item I would seek to clarify several points.
In your post you write that “The My Global Career 500 doesn’t list any companies in China.” The list includes two Chinese employers: Hutchison Whampoa with 200,000 employees and China Mobile Ltd. with 88,127 employees. (Editor’s note: For the purposes of the blog, I was comparing Weston’s list of Top 10 global employers with the Fortune Top 10. Weston’s list had no Chinese companies in the top 10 largest global employers, while Fortune had four.)
On to your larger point: In stark contrast to Fortune’s rankings, My Global Career 500 is a useful list for job seekers. Wise men might disagree about what’s useful, but of the two lists, only My Global Career 500 passes this litmus test:
The list is actionable because it includes links to the employers’ job sites (and there are vacancies).
Among these employers, there is a possibility that anyone, even from outside the country, can apply for work.
In the case of U.S. federal jobs, there is no outright ban on foreign citizens, but if you read the fine print, the hoops are enormous—including U.S. ID cards and pre-employment tests offered in the U.S. only.
However, the hoops are arguably even higher for foreigners seeking employment in organizations such as the million-strong U.K.-based National Health Service. In India, where they have had as many as 7.5 million people apply for 38,000 openings with India Railways, it would be interesting to know how many of those positions went to foreigners. For this reason, I believe government employers belong on a separate list.
One area where we are in agreement is this: I will do a better job going forward of underscoring the differences between the two lists. For instance: We intend to update My Global Career 500 on a regular basis as mergers and acquisitions occur, etc., rather than annually, as we see with most lists. My goal isn’t to usurp Fortune magazine, it’s to provide job seekers with a useful directory of global, corporate employers.
Last month, I wrote a column about a provocative new business book by Stanford professor Robert Sutton titled The No-Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t. I received a fair number of letters in response to the column. Many were critical of my use (some would say overuse) of the word “asshole,” but most simply expressed appreciation that Dr. Sutton had written such a book on a topic that is clearly a huge problem in the workplace today.
The book has struck a chord with a lot of people, so much so that today it is No. 8 on Amazon.com’s bestseller list. Given that about 5 percent of all the books sold in America are sold through Amazon.com, this is a huge achievement and speaks to the universal nature of the topic. And, it is outselling another famous book, U.S. Sen. Barack Obama’s The Audacity of Hope—Thoughts on Reclaiming the American Dream. That’s at No. 15 on the Amazon list. Clearly, dealing with assholes is more important to people than reclaiming the American dream.
There is a new list of the top global employers out today from My Global Career 500, compiled by a team of researchers for the myglobalcareer.com Web site. I’ve never heard of the site or this list before, so I was interested in their rankings. The list is similar to the annual Fortune 500 list of largest companies worldwide (that we excerpted in Workforce Management’s Data Bank column in the August 14, 2006 issue) except for one major point: The My Global Career 500 doesn’t list any companies in China. It also misses the U.S. Postal Service, which is the No. 4 global employer, according to Fortune.
This gave me pause since four of the largest global employers are Chinese companies, according to Fortune. So, why the big difference in the two lists? It’s hard to tell. Fortune is the bible of business coverage, of course, having been around for more than 75 years. Not only is the Fortune 500 the gold standard when it comes to lists like this, but it has stood the test of time and is regarded as the most credible ranking of its kind anywhere.
Myglobalcareer.com, on the other hand, describes itself as a “blog-based information resource by Third Set Media, a startup company in Lafayette, California. There are 300 million career links available on the Net, according to Google, but we believe the world needs one more, a category-leading site for those interested in exploring—or engaged in—global careers.” The company was founded and is run by a guy named Rusty Weston who used to work at Information Week.
I asked why this list seemed to miss China and got this response back from Weston: “We’re ranking corporate employers rather than state-owned enterprises. (Otherwise, India Railways would have been No. 1.) In one case, Gazprom, we have a majority state-owned company but 49 percent of the stock is traded in public markets, so we made an exception for them. Plus, another key difference is that our companies all have a multi-country presence—thus they are global corporate employers.”
I understand what My Global Career is trying to do—show the largest global employers—and yes, I understand that state-owned companies in China aren’t places that most global job seekers are likely to look to for a job. But I don’t think the Web site does a very good job driving that point home. I look at lists like this all the time, and I was confused about the rankings. The list seemed to me to be setting itself up as a challenger to the Fortune list and was not completely clear that it is something completely different.
Although I applaud the effort to enlighten global job seekers, The My Global Career 500 doesn’t work for me if it chooses to ignore state-owned enterprises, China and the U.S. Postal Service. My guess is that this list is not going to be a challenge to Fortune anytime this millennium.
By the way, here are the two lists. See what you think.
The Fortune 500 list of largest employers worldwide (2005):
Wal-Mart Stores, United States, 1,800,000 employees
China National Petroleum, China, 1,090,232 employees
State Grid, China, 844,031 employees
U.S. Postal Service, United States, 803,000 employees.
Sinopec, China, 730,000 employees
Deutsche Post, Germany, 502,545 employees
Agricultural Bank of China, China, 478,895 employees
UES of Russia, Russia, 461,200 employees
Siemens Group, Germany, 461,000 employees
McDonald’s, United States, 447,000 employees
The My Global Career 500 list of largest employers worldwide (2006):
Wal-Mart Stores, United States, 1,800,000 employees
Deutsche Post, Germany, 502,545 employees
Siemens Group, Germany, 461,000 employees
McDonald’s, United States, 447,000 employees
Carrefour, France, 440,479 employees
Compass Group, United Kingdom, 410,074 employees
United Parcel Service, United States, 407,000 employees
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