Saturday, September 07, 2013

A tale of two layoffs

Two recent headlines that received far different levels of attention:

One that made a lot of news a few weeks ago: Buffett-Backed Heinz Cuts 600 Jobs, Pushes Accountability

More recently one with only passing media interest: American Eagle, BAE closings will affect hundreds of jobs here

Which is more important?  No doubt the Heinz story had almost international import.  The connections to Pittsburgh's history extend back centuries at this point. But the American Eagle jobs?   Works out to just about the same number of jobs.  Maybe a bit lower paying, but still were they  really de minimus compared to the tsunami of coverage over Heinz? You might think so just reading the news coverage of the two items. 

Here is the thing.  The job losses at Heinz were about as well telegraphed a layoff as ever Pittsburgh has seen in a long time. Heinz as bought out whole by a partnership including Warren Buffet and others.  Buffet has long loved the retail food sector and must know something about how the biz.  It was presumed job losses would come at Heinz's corporate HQ and those job losses would have happened wherever they were located. In fact they did happen across the company and losses elsewhere were comparable to Pittsburgh.  It is not like the jobs were moved elsewhere.  The whole episode said almost nothing about the competitveness of Pittsburgh as a region or a regional economy, just nothing. There was nothing Pittsburgh, nor any other region for that matter, could have done to keep those jobs.

American Eagle is a different story.  The jobs were not eliminated, but indeed moved elsewhere.  Not even moved to some other part of the nation or world, but merely across to the other side of Pennsylvania. The location, i.e. Pittsburgh, was not working for them. The jobs themselves were really in the transportation and warehousing more than retail.  So all the effort you may have heard of folks thinking Pittsburgh could be a big warehousing center?  Not only that, but if oneof the major retail companies located in Pittsburgh does not find Pittsburgh a great place for this type of operation, what does that say for trying to build a broader cluster from companies without a Pittsburgh base? Seriously more important for the future of Pittsburgh than the Heinz news.

The 2nd item in the PGT story linked about BAE is also something of note.  The BAE jobs lost came from work refurbishing Bradley Fighting Vehicles and self-propelled howitzers.  What were Bradley Fighting Vehicles designed for?  Fast moving mechanized warfare though the Fulda Gap (sorry, my inner defense analyst comes out sometimes). Same for self propelled howitzers for the most part.  So the world has changed and best not to overinterpret what it says about the Pittsburgh region. However it does bode more of the long term trend with Pittsburgh less and less of a defense based economy.  Not gone mind you, and some has morphed in hard and soft tech. The jobs are just Still, I've pointed out that literally written into the statutes of the city of Pittsburgh is an explicit annual requirement (requirement mind you) long ignored to measure the defense impact on the local economy.  How much of city code is actually ignored is a story for another day.

Ok.. that was three layoffs.


Anonymous Anonymous said...

I'm sorry, you're not going to convince me warehouse workers are more important to the region than Fortune 500 management employees.

Monday, September 09, 2013 4:56:00 PM  
Anonymous MH said...

I read somewhere that they tried to outsource CEOs but they couldn't find anybody in India who was fatuous enough.

Tuesday, September 10, 2013 10:05:00 AM  
Blogger C. Briem said...

Is there a counterargument lurking in that first comment?

Tuesday, September 10, 2013 7:55:00 PM  
Anonymous Anonymous said...

that section of PA is becoming the warehouse belt (america's warehouse or whatever they brand it). it's NS proposed inland port. simply put, it has amazing rail, road, and port access in addition to the northeast corridor's population.

Wednesday, September 11, 2013 11:49:00 AM  

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