|
I definitely believe that this is a direct result of the unions, they kept asking for too much too often. At some point meeting those demands cuts too far into the profitability margin and you have either draw the line, which many unions are unwilling to do, or outsource the operation to become profitable again.
Lets face it, if you sell for something for $10, and the first year your labor force cost $2 to make x, then the following year it cost $4 in labor and the following year it costs you $8 in labor costs. But in the mean time you are still selling for $10 your profit is now $2, a sharp decrease in a short time-span. So you are faced with either selling the product for more, which will hurt sales, or decreasing your labor costs...
|