WTF? Guy Who Destroyed New Process Gear Gets $1 Billion Payout.

Magna International a Canadian auto parts company and its founder Frank Stronach came in to CNY, bought up the last of our big industrial employers, the New Process Gear auto parts plant, and proceeded to run the 121 year-old company into the ground. Magna asked for continual wage and benefit cuts, and put no significant investment in a plant that was caught making parts for behemoth SUV’s that no one was buying anymore.

The union–in the middle of a financial meltdown–voted overwhelmingly on three separate occasions to reject contract offers. They knew the plant would close, they believed it would close whatever they did, so it was better to accept unemployment while they were still making $20/hour and retraining assistance rather than wait until wages were lower and retraining money wasn’t available.

Why revisit this issue now? Today, a Canadian court approved a $1 Billion payout to Magna International founder Frank Stronach.

It was the Ford Motor Company that originally realized that workers receiving a decent wage were better customers. It was General Motors, once the world’s largest employer, whose pay and benefits negotiated with a strong UAW, lifted millions into what we used to consider an American invention–a large and satisfied middle class.

In Central NY, at the beginning of the 21st century, the auto industry is just the latest industry to pack its bags and leave–headed to the sweatshop labor and no benefits zones of Asia and other emerging nations. If you’re a lawyer or a software engineer, there are loads of jobs for you in Syracuse. Those trapped without the education and skills for these specialized trades better learn to empty bed pans and be able to say “would you like fries with that order?”

The social stratification of job opportunities in our community and our nation have taken a toll on the middle class. The middle class isn’t so large anymore and there are many slipping off the deck into the cold waters of poverty as the S.S. Opportunity sets sail–away from CNY’s ravaged shores.

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6 thoughts on “WTF? Guy Who Destroyed New Process Gear Gets $1 Billion Payout.

  1. NYCO

    Magna asked for continual wage and benefit cuts… and Local 624 gave Magna what it wanted, bit by bit. By the time the workers decided enough was enough, it was pretty much too late.

    I’m not too sure there are lots of jobs for lawyers out there. Have you ever sampled the growing network of Bitter Law Grad blogs? A good place to start is here: http://legalnihilist.wordpress.com/ Interested to know what your take is on these. (Personally, I think some of the points they are raising about law schools, are going to eventually spread to non-profit higher ed in general.)

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    1. I went to law school for one sad semester. My father, a local attorney, had warned me away from the whole deal–particularly, he said, if I wanted to live in Syracuse. And that was 25 years ago. He felt the market was saturated and he certainly had a declining book of business–being a solo practitioner.

      That being said–you can’t throw a rotten tomato in this town without hitting a lawyer. We are a catch basin for SU, Buffalo, Albany and Cornell law schools (I’m betting we don’t get too many of the NYC law school grads.)

      The whole law school deal is very similar to the PhD scam–load yourself up with debt for a shot at a career where a few make a mint, but the rest can feel like indentured servants. Lawyers used to be guaranteed a six figure starting salary–but that’s not so assured now.

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  2. NYCO

    Your dad sounds pretty smart. I’m just wondering when the current disgruntlement with Ph.D. and law grad gluts is going to trickle down to the master’s level, or even the undergrad level.

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    1. Interesting question–when does the accumulation of debt outweigh the returns of an academic credential? From a practical perspective, an undergrad degree still provides a significant bump in future earnings. Master’s degrees are an entirely different story. The only real time to take an advanced degree is if your current employer needs some increased skills from you (and they are willing to pay or help defray the cost.) Some degrees are a needed credential (teaching, therapy etc.) so they are unavoidable–a cost to enter the profession. Masters in the humanities or soft profession (MBA) have been rendered almost totally useless. In an era where even PhD’s are no guarantee of employment, what good is a master’s in humanities? Get the taxi or waitress job now and find some other sort of outlet for your knowledge (a blog perhaps?)

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  3. Davey

    Market forces constantly evolve and jobs which were once high pay and high demand fall by the wayside. I trained and qualified as an engineer but when I started out the vacuum tube was king. Transistors were still Germanium and of the red spot and white spot variety (one was audio and the other was low RF). In the 1960s it was thought that transistors would never amount to much but all that changed! I have to admit that trying to keep up with the explosion of technology was pretty head splitting at times and eventually when management feels that one can no longer run four minute miles any more one is discarded like an old shoe. Throw-away electronics causes throw-away people but the genie cannot be put back in the bottle. I know someone who chose to study pure mathematics and he did get an excellent degree. The trouble was that the only job openings were in teaching unruly kids mathematics. During the boom years in farming many boys felt that all they needed to know was how to milk a cow and how to drive a tractor and they most certainly did not wish to learn maths so teaching was an unenviable job. With 20-20 hindsight he wishes that he had trained to become a Charted Accountant as companies will pay handsomely to have their books done. Personally I envy doctors as the same basic humanoid has been around for at least 100,000 years and hasn’t changed much or am I missing something?

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