dannyboy
From the promised LAND
first off, I hate it when any ups employee loses their job, management or hourly. it sucks. but in todays world, with todays values in our company, even the sacred cows need to be evaluated when it comes to company survival.
take a center, much like ours, with twin center managers, and around 100 drivers. word comes down that we need to cut costs, so they need to cut 4 drivers.
cut the driver, and he gets to replace the bottom two people part time, so the bottom 8 part timers get the ax.
a typical driver working a 9.5 makes aprox 75,000 a year, plus another 13,000 in benefits, retirement and insurance
part timer makes 9500 a year, no other costs for benefits, as he is at the bottom
the 8 part timers make a combined 78,500 a year, and they are now replaced doing the same job, by 4 drivers that are pulling down a bit over 71,000 each or 284,000 with benefits.
the cut routes add an additional 190 hours of work that is then spread to the other drivers. now, assuming that 25 hours of that is drive time that is no longer spread to the 4 drivers, that still leaves 165 hours a week, all of which is overtime, or an additional cost of 360,000 dollars to the center’s cost.
so these cuts have the following results for the center
savings to the preload for 8 lost employees 78,500
cost to the preload for using drivers instead 284,000
savings to the delivery costs 352,000
extra costs in overtime 360,000
so the net result in delivery is almost a wash cost wise, as it only costs about 8,000 in labor costs to cut those routes, a difference that is very easily made up by fuel and vehicle costs savings by cutting those four drivers.
where the real extra costs come is when you take the drivers out of delivery, and put them into the preload.
over all, cutting those 4 drivers makes sense, because by the time you factor in all the additional overhead, ups comes out ahead financially, quite possibly several hundred to thousands dollars a week in actual savings.
for many many years, that was the first and only line of cost reductions in labor costs.
now, it seems, the shoe is on the other foot
with the micro management at the very top, and virtually no command decisions made at the center level without district approval, management cuts were a sure thing to be next.
center manager makes 80,000+ in wages, mip, and insurance benefits, so basically, well above 100,000.
district people you can figure 120,000 or better a year wages and benefits.
when one of our center managers is gone, there are a few things that get postponed or canceled. everything else is handled by other members of the staff. heck, outside of dealing with some labor issues, there is no change to operations when they are both gone.
there is no, or very little increase in costs, because all the staff is salaried.
so if we dump one of the center managers, we save upwards of 2000 a week plus. we can even increase the other center managers wage for all that extra "work" he is doing.
with all the cost cutting initiatives of the past, why are they just now getting around to figuring this one out?
they have cut as much of the hourly workforce as they legally can under the contract. the only way to achieve additional costs savings is to trim the management load. no longer is the management positions beyond the reach of the ax, actually, they are the only positions left to cut, so to please the stockholders.
d
take a center, much like ours, with twin center managers, and around 100 drivers. word comes down that we need to cut costs, so they need to cut 4 drivers.
cut the driver, and he gets to replace the bottom two people part time, so the bottom 8 part timers get the ax.
a typical driver working a 9.5 makes aprox 75,000 a year, plus another 13,000 in benefits, retirement and insurance
part timer makes 9500 a year, no other costs for benefits, as he is at the bottom
the 8 part timers make a combined 78,500 a year, and they are now replaced doing the same job, by 4 drivers that are pulling down a bit over 71,000 each or 284,000 with benefits.
the cut routes add an additional 190 hours of work that is then spread to the other drivers. now, assuming that 25 hours of that is drive time that is no longer spread to the 4 drivers, that still leaves 165 hours a week, all of which is overtime, or an additional cost of 360,000 dollars to the center’s cost.
so these cuts have the following results for the center
savings to the preload for 8 lost employees 78,500
cost to the preload for using drivers instead 284,000
savings to the delivery costs 352,000
extra costs in overtime 360,000
so the net result in delivery is almost a wash cost wise, as it only costs about 8,000 in labor costs to cut those routes, a difference that is very easily made up by fuel and vehicle costs savings by cutting those four drivers.
where the real extra costs come is when you take the drivers out of delivery, and put them into the preload.
over all, cutting those 4 drivers makes sense, because by the time you factor in all the additional overhead, ups comes out ahead financially, quite possibly several hundred to thousands dollars a week in actual savings.
for many many years, that was the first and only line of cost reductions in labor costs.
now, it seems, the shoe is on the other foot
with the micro management at the very top, and virtually no command decisions made at the center level without district approval, management cuts were a sure thing to be next.
center manager makes 80,000+ in wages, mip, and insurance benefits, so basically, well above 100,000.
district people you can figure 120,000 or better a year wages and benefits.
when one of our center managers is gone, there are a few things that get postponed or canceled. everything else is handled by other members of the staff. heck, outside of dealing with some labor issues, there is no change to operations when they are both gone.
there is no, or very little increase in costs, because all the staff is salaried.
so if we dump one of the center managers, we save upwards of 2000 a week plus. we can even increase the other center managers wage for all that extra "work" he is doing.
with all the cost cutting initiatives of the past, why are they just now getting around to figuring this one out?
they have cut as much of the hourly workforce as they legally can under the contract. the only way to achieve additional costs savings is to trim the management load. no longer is the management positions beyond the reach of the ax, actually, they are the only positions left to cut, so to please the stockholders.
d
