Lesson Learned from Lincoln Electric Layoffs

The latest company to be hit by the economic crisis is Lincoln Electric, a Cleveland based company. Lincoln Electric announced a 10 percent reduction in its global workforce. The company employs more than 9,000 worldwide and expects to save $50 million through the job cuts.

The company will also continue to cut hours and offer voluntary buyouts to all of its 2,900 bonus-eligible local workers.

Lincoln also announced it will institute a voluntary separation program for its Cleveland-based work force. It will cut executive management team base salaries, freeze merit raises and external hiring, suspend its 401(k) plan company match and continue with previously announced reduced work hours for Cleveland-based employees, according to a news release.

John Stropki, company CEO, said, "Lincoln Electric has a long history of effectively managing its cost structure through economic cycles. However, the severity of global conditions has required us to institute additional action and target cost reductions in our Selling, General, and Administrative expenses."

Even a solid company like Lincoln Electric cannot survive this world-wide economic problem without layoffs, something that hasn't happened in over 50 years.

According to their web site, http://www.lincolnelectric.com/corporate/career/, an "Incentive Performance System, primarily attributed to James F. Lincoln, has been in place at Lincoln Electric since the early twentieth century. It has resulted in one of the oldest 'pay-for-performance' systems in the country, and is frequently used for benchmarking by other businesses and studied by academics around the world."

With their "Incentive Performance System in place in the U.S.", one that offers "Guaranteed Employment after three years of service, the company has not exercised its layoff options in the U.S. operations since post war 1948."

In an online article by Business Week, "How 'No Layoffs' Can Work", written in 2001, Jennifer Gill reports how a company like Lincoln Electric can survive even in the worst of times. Evidently, the global economic crash of 2008-09 had not yet occurred. Below is an excerpt from that article back in 2001, which can be read at http://www.businessweek.com/careers/content/nov2001/ca2001116_6269.htm.

"Not every business is cutting workers loose, however. As the economic slump has deepened, some innovative companies have found ways to reduce costs without handing out pink slips. Leading the pack is Cleveland-based Lincoln Electric -- and not just in this slowdown. Lincoln hasn't laid off a single U.S. employee in more than five decades. Since the 1950s, it has guaranteed a job to everyone with at least three years of service. In return, its 3,000 workers agree to pay cuts or reassignments if business conditions warrant. They also agree not to join a union."

Even a "Guaranteed Employment" plan cannot guarantee you a job today, even with a company like Lincoln Electric. I believe there are lessons we can learn from plans such as these, there is no guarantee in life, layoffs happen, jobs get eliminated, and we cannot control the economy. That's why it's so important to take matters into your own hands, and search for alternatives. One such alternative that I've turned to is a part-time home based business. As I continue to work at my, day time job, I continue to build my home business.

The Internet is a great place to get started. You can build a global business from the confines of your own home. Manufacturing jobs may be going away, but the Internet is here to stay. And as your typical nine-to-five jobs continue to disappear, more and more people will be looking for an alternative to your typical job. If you have a computer and an Internet connection, you can be working today.

Do let this economic crisis get the best of you. If you are working, there is no guarantee you will have a job tomorrow. It's best to prepare for the worse, but at the same time, you can hope for the best. Preparation is a key word here, because I don't think we have seen the worst of our economic times. don't wait until you get laid-off to make alternative plans. Take action today, and plan for a better future.

Jeffrey Sloe, Internet Marketing Advisor.
440-725-3729
jeff@internetmarketingadvisors.net
http://internetmarketingadvisors.net
http://web-prosperity-system.com