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Letter
# 10
Subj.: You
get what you pay for
Date: July 07,2000 - just released
From: <JLB> (#10)
To: <dealers@nfge.com>
The following is a
reprint of a feature newspaper article that describes a
relationship between a major $3 billion / year trucking
company and its
workers. It should be required
reading for all Casino bosses.......
Inside Business
Diane Evans
You get what you pay for
Roadway
executive's philosophy is refreshing
So Roadway
Express is exceeding performance expectations, even with
his high wage union drivers.
Meanwhile, its competitor Caliber Systems is seeing profits
and stock prices fall. Just the opposite
had been predicted, as business writer John Russell reported Sunday. When Caliber
and Roadway Express separated into two publicly traded companies,
it seemed to many that Caliber had the advantage because of its nonunion
drivers, particularly in its freight subsidiary Viking. Roadway
Express had just suffered losses from a 24 day Teamsters
strike-- a problem Caliber wouldn't face. However, a year
later, analysts praise Roadway for steady performance and
criticize Caliber and its Viking Freight subsidiary, for
letting service suffer in the rush to cut prices.
From the start, Robert Mercer maintained that
Roadway could compete effectively while paying higher wages. Mercer is the Chairman of the Roadway Express board and a former
CEO of Goodyear. And while Roadway restructured to cut costs, it
didn't ask for wages concessions. Commented Mercer recently from his
home in Florida: "It's what
you get for what you pay. That's
what's important. It's not the wage rate."
The average union employee at Roadway makes $43,000
a year. Some long-haul drivers make up to $70,000
a year. And what's the payoff? For one thing, Roadway
has a stable force. Last year, the company
had less than 3 percent turnover among drivers
and dockworkers. Industrywide, annual
turnover approaches 100 percent. "The Roadway Teamsters bring a lot to the party," Mercer
said. "They're reliable. They have an excellent safety record.
They produce. Serving our customers and creating
customer satisfaction is the future of our business. If
they do that successfully, we're not going to worry
that our wages are 30 percent more than the nonunion guys. We're
proud of it."
Under Michael Wickham, Roadway CEO,
the company and the Teamsters have forged a
relationship of mutual respect. Wickham is a former Teamster. "We get quality
performance," Mercer said. "At the end
of the day, do your customers feel
they've gotten value received for what you've charged?
Remember, these guys have lives to lead. They have
families. They deserve a decent standard of living."
There's nothing new in the idea that you get what you pay for, in workers as in anything. But it's refreshing to
hear it from someone in Mercer's position. How often
do executives whine about how they need to lower wages
to compete effectively? In some cases, high labor costs can sink
a company, especially if productivity doesn't correspond to the
cost of labor. But there are many well-managed companies
that are profitable, while paying
attractive wages and respecting the dignity of workers.
As Mercer pointed out, workers do have families
to support. People in corporate boardrooms need
to keep that in mind, because through their decisions,
they control in a significant way how people live -- and
whether our society has a strong middle class or an ever widening gap between the rich and the
poor.
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