Harley Davidson Greed Exposed

Are Harley cuts a case of need or greed?

By Jack Norman Sept. 11, 2010

Is Harley-Davidson squeezing its unions with plant-closing threats because it has to? Or because it wants to?

Was Harley forced by market conditions to demand enormous cuts in jobs, wages and benefits? Or was it a deliberate strategy to take advantage of the economic crisis?

For union employees, the answer has little practical impact. Harley made its move, and the only way to save jobs is bowing to company demands.

But the answers make a great deal of difference to taxpayers and policy-makers. If this is an optional corporate strategy, there is reason to fear for the future of Wisconsin’s middle-class workers.

Evidence points to it being a voluntary tactic. Harley made $104 million in profits in the first six months of 2010. It did have a $55 million loss in 2009, a strategic choice resulting from a $126 million write-down for discontinued operations. Before that, the company had made at least $100 million in profits for 15 straight years.

That’s why The New York Times chose Harley-Davidson as the focus of a July article headlined: “Industries Find Surging Profits in Deeper Cuts.” As the article noted, Harley and the companies it typifies are fine-tuning the ability to “raise profits in the face of declining sales,” while “the benefits are mostly going to shareholders instead of the broader economy.”

Are these profits earned by sacrifices throughout the firm? Apparently not.

Last year, Harley’s CEO (a job split during the year between James Ziemer and Keith Wandell) took home $8,864,919 in extras over and above base salary of $1,105,169. In 2008, the bonuses totaled $6,201,323. That’s over $15 million in bonuses the past two years to the CEO of a company that cries “crisis” to justify lower wages and benefits for production workers.

Members of Harley’s board of directors (if they aren’t already employees) each collected an $80,000 fee in 2009, plus $50,000 worth of stock. During this “crisis,” board members never lost their $1,500 annual allowance for clothes and accessories, nor their free use of a motorcycle.

Harley-Davidson’s take-it-or-we’ll-leave threat is a corporate strategy that is chosen because – in these hard economic times – it works.

Harley used the identical technique in York, Pa., last year. The workforce was halved, and a new category of casual workers was created with lower wages and no benefits. The state provided job training, low-interest loans and $15 million for upgrades.

Mercury Marine used this ploy last year in Fond du Lac, forcing the union to take major cuts while state and local officials produced a hefty package of taxpayer-funded incentives. In fact, this seems to be the strategy du jour for large corporations all over America.

Some business consultants have likened this strategy to a “cash cow,” a business operation that requires little investment but returns large profits. This “cash-cow” approach includes demands for three kinds of concessions from workers and local governments: a reduction in hard costs such as state and local taxes; a reduction in soft costs through taxpayer-funded loans or infrastructure; and a reduction in human resource costs through wage and benefit reductions as well as taxpayer-funded job training.

Harley’s approach, both in Pennsylvania and Wisconsin, typifies this cash-cow corporate stance toward workers and taxpayers. Harley CEO Wandell said the company was open to incentives, and state officials have obliged with a still-secret package of tax-funded benefits.

Why is this cash-cow strategy a problem? As more companies adopt it, it reinforces the trend toward higher profits with lower wages and fewer jobs. The concessions Harley demands reduce the number of middle-class jobs at $30 an hour plus benefits, replacing some of them with positions at $17 an hour with no benefits. This elimination of middle-class wages damages local economies and shrinks revenues for public services and infrastructure.

The impact was highlighted by a recent report from the Wisconsin Department of Revenue showing state tax revenues for personal income and sales taxes below even pessimistic estimates, while corporate income taxes exceeded expectations by nearly 20%. Profits are up; employee income and spending are down.

Corporations milking cash from workers and governments alike is a double whammy for taxpayers. It requires low-cost, quality public services to meet the company’s needs, all the while shrinking the local tax base. In Pennsylvania, Harley won a taxpayer-funded package of worker training, low-cost loans and infrastructure. In Wisconsin, Harley won state concessions. Last year, Mercury Marine secured millions in state and local aid.

In the long run, this corporate behavior shrinks the state’s middle class, undermining the quality of life which is Wisconsin’s hallmark.

Jack Norman is research director for the Institute for Wisconsin’s Future.

More on Michelle Rhee’s Firing of 241 D.C. Teachers

Published on Saturday, July 24, by Valerie Strauss 2010 by The Washington Post

The Problem with How Rhee Fired Teachers

D.C. Schools Chancellor Michelle Rhee was entirely correct when she said that “every child in a District of Columbia public school has a right to a highly effective teacher” in every classroom.

But if Rhee really thinks that her IMPACT evaluation system of teachers is going to get the system there, then she is fooling herself, and everybody else who agrees with her.

And this is a problem not only for 165 teachers she fired Friday after they received poor appraisals under the system, but for the rest of the teaching corps in D.C. public schools who have yet to go under the IMPACT scalpel.

Rhee, tough as ever, fired a total of 241 teachers; the others were let go because they did not have the proper licensing, as required by the federal No Child Left Behind law, my colleague Bill Turque wrote in a Washington Post story Saturday.

It may well be that all 165 teachers fired because of bad evaluations under IMPACT were bad at their jobs, but IMPACT isn’t designed well enough to tell, according to a number of teachers and other educators.

According to Turque, about 20 percent of the District’s classroom teachers — all of them reading and math instructors in grades 4 through 8 — were evaluated on student improvement in scores on the District of Columbia Comprehensive Assessment System, or DC CAS. Those were the only grades and subjects for which there is annual test score data from DC CAS. “Value-added” — a misnomer that ranks with the best of them — will constitute 50 percent of their evaluation.

Judging teachers on the test scores of their students is all the rage in school reform these days — thanks so much, Education Secretary Arne Duncan — but, frankly, this is unconscionable for several reasons, not the least of which is that DC CAS wasn’t designed to evaluate teachers. That’s a basic violation of testing law. Ask any evaluation expert.

Think back to an important test you bombed because you were tired, sick or just got brain freeze. How would you like your pay linked to the results?

But there’s more to the evaluation system than mere test scores, and this makes almost as much or, rather, little sense.

Under IMPACT, all teachers are supposed to receive five 30-minute classroom observations during the school year, three by a school administrator and two by an outside “master educator” with a background in the instructor’s subject.

They are scored against a “teaching and learning framework” with 22 different measures in nine categories. Among the criteria are classroom presence, time management, clarity in presenting the objectives of a lesson and ensuring that students across all levels of learning ability understand the material.

A number of teachers never got the full five evaluations, apparently because a number of master teachers hired to do the jobs quit, according to sources in the school system.

But even if they all were, let’s look closely at this: In 30 minutes, a teacher is supposed to demonstrate all 22 different teaching elements. What teacher demonstrates 22 teaching elements — some of which are not particularly related — in 30 minutes? Suppose a teacher takes 30 minutes to introduce new material and doesn’t have time to show. … Oh well. Bad evaluation.

In a 2009 story, Turque wrote: “IMPACT documents suggest that no nuance will be left unexamined in the 30-minute classroom visits. Observers are expected to check every five minutes for the fraction of students paying attention. Teachers are supposed to show that they can tailor instruction to at least three ‘learning styles’ (auditory, visual or tactile, for example). They can lower their scores by ‘using sarcasm that visibly hurts or decreases the comfort of one or more students.’ Among the ways instructors can demonstrate that they are instilling student belief in success is through ‘affirmation chants, poems and cheers.’ “

And there’s more, which you can see for yourself here.

IMPACT is actually a collection of 20 different evaluation systems for teachers in different capacities and other school personnel. One thing teachers say it does not do is provide enough support for teachers found wanting to improve.

The overall impact of IMPACT is not only unfair but not likely to do the job it is supposed to do: Root out bad teachers. Some great teachers are likely to be tossed out, and others, who know how to play along when the observers come in but don’t do much when they aren’t, could get a pass.

Of course, every school system should fire bad teachers. But they need a sophisticated and fair system to do that, and so far, D.C. doesn’t have one.

© 2010 The Washington Post

Valerie Strauss writes the Answer Sheet blog for the Washington Post.

Rhee (D.C.) Fires 241 Teachers/Calls It a “Cleanup”

D.C. school system fires 241 teachers

By Sally Holland, CNN July 24, 2010

NEW: Schools chancellor Michelle Rhee says children are done “a disservice” by poor teachers

• Teachers union says most members dislike IMPACT program
• Union plans to challenge 81 firings
• Hundreds of other employees are put on notice

Washington (CNN) — The District of Columbia public school system announced Friday that it is letting 226 employees go for poor performance under the education assessment system IMPACT.

Another 76 employees will be terminated because of licensing issues, schools Chancellor Michelle Rhee said in a news release. Of the 302 employees who are losing their jobs, 241 are teachers, she said.

“Every child in a District of Columbia public school has a right to a highly effective teacher — in every classroom of every school, of every neighborhood or every ward, in this city,” Rhee said.

Rhee said on CNN’s “John King, USA” that she thought the cleanup was a long time coming.

“We want to get along with the union. We want to get along with this person or that person. We don’t want to fire anyone,” she said.

“But in the meantime, children have been done a disservice every single day. We have graduated a generation of Washingtonians who don’t have the skills and knowledge that they need to be productive members of society because our schools have failed them.”

Rhee did not break down the number of teachers fired for poor performance versus licensing issues.

Under the IMPACT program, teachers were judged on five classroom observation visits by principals and outside education experts. The system also rates teachers based on their students’ achievement.

In response to the firings, the Washington Teachers Union released the results of a membership study showing that “a large majority of teachers believe that IMPACT is not a fair evaluation system.”

Washington Teachers Union President George Parker said, “It is evident from this survey that our members agree that IMPACT is a flawed instrument with many loopholes.”

The union claims that teachers under the IMPACT system need clearer communication on expectations, among other things.

The teachers union has no say in which evaluation system that the D.C. public school system chooses to use, and by contract, teachers can be let go for low evaluations.

Parker added that the union plans to challenge the firings of about 81 of the teachers.

Randi Weingarten, president of the American Federation of Teachers, told CNN’s Rick Sanchez that the IMPACT system needed more evaluation itself..

“Everyone who teaches gets better with time and gets better with experience, just like ballplayers and others,” she said.

” … All we’re saying is that if an evaluation system is thorough, competent, comprehensive, measures how we’re doing as teachers and how students are learning, then it’s fine,” she said. “But the thing is, in the whole year, we have raised, and the teachers have raised, lots and lots of different issues about the evaluation system, and the person who turned a blind eye to it was Michelle.”

Rhee told King that she had heard the teacher’s union say teachers with poor evaluations should have been given more time to improve.

“But the question that I ask to them is ‘Whose children are we going to put in the classroom of ineffective teachers next year?’ My two kids go to DCPS. I’m not willing to put my kids in those classrooms, and I don’t think any parents anywhere in this city should be forced to make that decision,” Rhee said.

The 2009-10 school year was the first full year of implementation of the IMPACT program for the D.C. Public Schools.

Also Friday, the district announced that it has notified 737 employees that if their performance doesn’t improve, they will be terminated after the upcoming school year.

Chicago Teacher Layoffs

Chicago Teachers Laid Off in Droves

Friday July 23 Lydersen In These Times

Chicago teachers who spent time training their own replacements are among hundreds who received layoff notices this week. In all, up to 1,500 Chicago teachers may be laid off by the time the new school year begins. The newly elected Chicago Teachers Union leadership and about 30 rank and file members are meeting with school officials Friday afternoon.

The 600 lay-off notices sent out this week went to 400 teachers and 200 staff at elementary schools which start in early August. On June 30, 239 teachers who were not assigned to a specific school were laid off. The union has demanded they be hired back before any new teachers are hired.

The cuts are part of the school district’s efforts to address a $370 million budget shortfall. High-school classes are being increased from 28 to 33 students, and programs including world languages, bilingual education, gifted programs and after school programs are being cut.

Teachers and youth advocates say increasing class sizes and chopping after school programs is especially devastating given the violence that has plagued Chicago public school students in recent years, including the highly publicized beating death of Fenger High School student Derrion Albert last fall. After-school programs are among the ways youth advocates and parents hope to give students a safe haven and an alternative to gang activity. And more crowded classes mean a more tense and dangerous environment for students and teachers.

Schools chief Ron Huberman has essentially blamed the union for a portion of the cuts, saying $135 million could be saved if they agreed to relinquish promised 4 percent pay raises. New union president Karen Lewis countered that the union has already made concessions, including hits to their pensions. She has said concessions by the union would set a bad precedent and take the pressure off state officials to provide funding by changing the school funding formula.

Community groups and teachers have also long demanded that schools be reimbursed tax dollars that have been diverted by TIFs (tax increment financing zones), the controversial so-called urban renewal program wherein the property taxes that go to schools and parks are frozen and any increases over the next 23 years are funneled to private development.

In Chicago, most of the city, including wealthy downtown neighborhoods, are covered by TIFs, which are supposed to be a tool used only in “blighted” areas. The union says as much as half a billion a year that should have gone in part to schools was diverted by TIFs. The money often ends up in the hands of politically connected developers and other private for-profit projects.