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What is the problem presented in the article?
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Nov. 03--The first of the layoff notices should be distributed Monday morning as third-shift employees clock out for the night at GE Transportation.
It's a move that's been months in coming. The clock began ticking April 9 when the company announced plans to eliminate 100 salaried positions and 950 union jobs at its Erie plant.
Now, after unsuccessful lobbying and failed negotiations aimed at saving jobs, the company's plan for its first round of layoff's is moving forward.
GE Transportation, which said the cutbacks were prompted by a slowdown in orders and productivity concerns, announced Sept. 3 that the first round of layoffs would affect about 500 employees.
The pink slips to be distributed Monday will give employees one-week notice of their layoff, said Scott Duke, president of Local 506 of the United Electrical, Radio and Machine Workers of America.
However, the initial layoff total might be slightly lower.
Jennifer Erickson, spokeswoman for GE Transportation, said about 50 employees are expected to retire instead of taking a layoff.
For some, those decisions have been difficult to make, Duke said.
"It keeps changing," he said. "They are saying yes (to retirement) and they are backing out. It's a major decision for some people."
While each retirement had the potential to spare one layoff, Duke said he didn't try to influence anyone's decision.
"That's not my role," he said.
In a statement from Erickson, the company acknowledged the significance of the job cuts.
"We are taking this difficult step to meet an increasingly challenging marketplace that requires us to reduce costs and improve flexibility to maintain our competitiveness," she said. "We understand how hard this action is for everyone affected, including families and the broader community."
She said the company is working closely with the state Department of Labor & Industry's Rapid Response team to help employees who lose their jobs.
Here's a look at what the company is doing for displaced employees and the benefits they are entitled to under the union contract:
- Rapid Response will be at GE Transportation on Tuesday to conduct an on-site job fair for displaced employees and those with lower years of service. Representatives of local colleges and trade schools are expected to attend as well as between 20 and 25 employers with plans to hire.
- Outplacement sessions will be held twice daily on Nov. 5, 12 and 19 in the auditorium of the Customer Innovation Center. Information will be provided on unemployment, health insurance, continuing education, retraining and other services available to affected employees.
- Instructional workshops will be held twice daily in the same building on Nov. 7, 14 and 21 to help employees develop skills to navigate a job search.
- The UE contract provides for income extension equal to one week of pay for every year of service, with a minimum of four weeks pay. Displaced employees also will receive a 12-month extension of their benefits, including medical, dental and vision insurance.
- Employees also are eligible for a training allowance that provides up to $6,000 a year for approved classes.
Finally, Duke said the union plans to apply for Trade Adjustment Assistance or TAA, which provides wide-reaching benefits to employees who lose their jobs due to foreign competition.
The union applied three times for TAA benefits before they were granted after a mass layoff in 2009.
"I feel good about it," Duke said. "I don't think the company is going to fight us."
JIM MARTIN can be reached at 870-1668 or by e-mail.
Credit: Erie Times-News, Pa.
Most managers are trained to handle a corporate crisis, but when it comes to the dreaded task of terminating employees, not enough do it well, experts say.
When breaking the news, some managers talk too much - including how difficult the decision has been for them. Others say too little, and come off as uncaring. The company itself may handle the move badly, depending on how aggressively they force the exits.
"Every HR [human resources] person or manager should be let go in their lifetime so they know what it feels like," says Colleen Coates, national practice leader at People First HR Services in Winnipeg. "You think you know how you'll respond, but you don't.
"If the employee starts to cry, how will they handle it? Or, if they get angry?" adds Ms. Coates, who has been on both ends of a job termination conversation in her career.
"It can go horribly wrong if they don't prepare properly."
Whether it's a termination, where the employee's job is eliminated, or a layoff, where the employee loses the job for a certain period of time, a company's handling of it can have consequences long after the former staffers have left the building with their personal belongings in a cardboard box. That includes an impact on operations internally, and how clients and contractors view it externally.
Employers should approach any job losses with caution and always be respectful, says Mark Swartz, a career columnist at job-search website Monster.ca. He says too often employers don't recognize the negative impact the event can have on employee morale, which in turn can hurt productivity.
"It's traumatic to the remaining staff - the survivors - and can create fear and resentment," Mr. Swartz adds. "People in fear don't want to take the kind of healthy risks an employer needs to rise above its average."
To help manage the disruption, Mr. Swartz says companies need to be compassionate and transparent about why the job losses occurred. "If you handle it in a benevolent way you boost your image as an employer ... staff feel motivated and they don't live in fear," he says.
Companies should also consider whether job losses are even necessary, says Dr. Henry Hornstein, a business professor who specializes in organizational change management at Sudbury, Ont.-based Algoma University.
He explains that some companies cut their work force to show shareholders they are trimming costs, but in the end the result isn't always money saved. "There's really only a 50-50 chance that downsizing will result in benefits that management anticipates," Mr. Hornstein says.
"Too often organizations default to downsizing and don't even consider any of the alternatives. It's as if they aren't considering what the potential negative consequences can be."
Alternatives to job cuts include transferring staff to other departments, using fewer contract workers, or cutting wages.
If layoffs are the only option, Mr. Hornstein says they must be handled respectfully. "It's a humiliating, psychologically destructive process. If organizations have to downsize there are more humane, productive ways than to turf people as though they are commodities, which they are not," he explains.
Companies also need to make sure they are following the law when it comes to laying off staff, including paying out severance as required by each province based on an employee's years of service.
Under the Canada Labour Code, which covers federal employees, an employer has to provide at least two weeks' notice in writing or two weeks wages to terminated employees after three consecutive months of employment, according to Human Resources and Skills Development Canada. Workers with at least 12 consecutive months of continuous employment also qualify for severance pay. .
The rules vary by province for the rest of the work force, including whether or not the employee belongs to a union.
Maxwell Brunette, a partner and employment lawyer at Blake Cassels & Graydon LLP in Calgary, says employers need to stick to the rules around termination and ensure the reasons are clear. "Make sure you are providing a fair amount of notice or pay in lieu of notice, and that you have objective business reasons as to why you are letting people go," Mr. Brunette says.
Employers should also give employees time to consider what's being offered in a severance package.
Ms. Coates of People First HR Services says managers should also receive training in advance on what to do and say to the person whose job is being cut.
"Everyone responds differently," Ms. Coates says. "The goal is doing it as respectfully as possible and getting that employee transitioned out of the workplace."
Credit: SPECIAL TO THE GLOBE AND MAIL