Cutbacks

CatMan · Aug 26, 2020

Does it ever get any easier?

The 15 man shop I run is finally experiencing the economic effects of COVID, at least that's what we think it is. I run a 15 man shop that's owned by an out of state millionaire. We make a machine that sells to government entities. We last got an order for machines on June 18th. We typically get/need around 10 orders a month.

Got a decree a couple of weeks ago that everyone was to take a week off (unpaid). Me and the parts guy were exempt from that blow as we still had to come in and answer the phones and do customer support. We've never laid people off in the (30 years+) history of the company. The week off was bad enough, but the worst thing is that we couldn't promise there would not be more unpaid vacations in the future.

Yesterday another decree came down that all salary employees were taking a 10% pay cut and the shop is having its hours reduced 10%. This is on top of no raise this year, and suspending 401k matching earlier in the year.

Dealing with the unknown is the worst. Nobody knows how long it will be before sales pick back up (post election I'm guessing). Me and the supervisor are working hard to make sure that we keep the shop busy in the mean time. I've got two guys that just bought a new house. I'm trying to retain the newer guys as I need to space out my employee tenure. So far everyone is sticking around, although it would help if one or two didn't.

This sucks.

DDoug · Aug 26, 2020

How are you at swinging a hammer ?

Housing stuff is all up, up UP!

ChipSplitter · Aug 26, 2020

For us (as an OEM), business was slow during March-July and came roaring back in August. Obviously different industries are affected in unique ways, but I think most of it is consumer confidence.

Unemployment isn't nearly as bad as it was (10% for July, lower yet for August). Unemployment Rates for States People just need time to regain confidence and start spending again IMO.

You don't hear about it because positive numbers don't make news...... :rolleyes5:

EmGo · Aug 26, 2020

CatMan said:
Does it ever get any easier?

I don't know if it gets easier exactly, but after your first one (late 70's for me) then you stay a lot more conservative with your money and listen to your common sense more than the papers. 2006 was predictable for years before it happened.

Preparation is key. In fact, there's different opportunities during a recession.

First one is a bitch tho !

plastikdreams · Aug 26, 2020

digger doug said:
How are you at swinging a hammer ?

Housing stuff is all up, up UP!

I can hoist a jack, I can lay a track...I can pick and shovel too.

DMF_TomB · Aug 26, 2020

try getting laid off if over 62, you wont find many even willing to give a interview.
.
i have seen guys drive a school bus cause it was all they could get. another drives a truck he says its not a bad job, nobody bothers you and with GPS hard to get lost

Mike1974 · Aug 26, 2020

CatMan said:
Does it ever get any easier?

The 15 man shop I run is finally experiencing the economic effects of COVID, at least that's what we think it is. I run a 15 man shop that's owned by an out of state millionaire. We make a machine that sells to government entities. We last got an order for machines on June 18th. We typically get/need around 10 orders a month.

Got a decree a couple of weeks ago that everyone was to take a week off (unpaid). Me and the parts guy were exempt from that blow as we still had to come in and answer the phones and do customer support. We've never laid people off in the (30 years+) history of the company. The week off was bad enough, but the worst thing is that we couldn't promise there would not be more unpaid vacations in the future.

Yesterday another decree came down that all salary employees were taking a 10% pay cut and the shop is having its hours reduced 10%. This is on top of no raise this year, and suspending 401k matching earlier in the year.

Dealing with the unknown is the worst. Nobody knows how long it will be before sales pick back up (post election I'm guessing). Me and the supervisor are working hard to make sure that we keep the shop busy in the mean time. I've got two guys that just bought a new house. I'm trying to retain the newer guys as I need to space out my employee tenure. So far everyone is sticking around, although it would help if one or two didn't.

This sucks.

If I took a paycut* like that, I would be out of there the first chance I got! I get it's hard for everyone, but have to wonder if your owner is really hurting that bad?

*Unless I also got the 10% reduction in hours as well, but not likely since alot of places treat salary one step above crap.

CatMan · Aug 27, 2020

Mike1974 said:
If I took a paycut* like that, I would be out of there the first chance I got! I get it's hard for everyone, but have to wonder if your owner is really hurting that bad?

*Unless I also got the 10% reduction in hours as well, but not likely since alot of places treat salary one step above crap.

It is a 10% pay cut, but what actually matters is how long it lasts. If it only lasts the rest of the year, then I only took a 10% cut for 4 months. Still sucks, but like I said, the unknown timeline is the worst.

Doesn't help matters either that the paycheck protection part of the CARES act database is easily searchable and it shows that the owner took a $2mil - $5mil "grant" from the government. I don't blame the owner though. It's his money and his businesses (not just us) are likely going to lose money this year.

Mike1974 · Aug 27, 2020

CatMan said:
It is a 10% pay cut, but what actually matters is how long it lasts. If it only lasts the rest of the year, then I only took a 10% cut for 4 months. Still sucks, but like I said, the unknown timeline is the worst.

Doesn't help matters either that the paycheck protection part of the CARES act database is easily searchable and it shows that the owner took a $2mil - $5mil "grant" from the government. I don't blame the owner though. It's his money and his businesses (not just us) are likely going to lose money this year.

I don't know how exactly it works, but isn't that loan/grant or whatever supposed to go directly to keeping employees on board? I wonder if it's legal to take the loan then cut pay and hours, maybe someone who has been through it on here will chime in...

Ox · Aug 27, 2020

CatMan said:
It is a 10% pay cut, but what actually matters is how long it lasts. If it only lasts the rest of the year, then I only took a 10% cut for 4 months. Still sucks, but like I said, the unknown timeline is the worst.

Doesn't help matters either that the paycheck protection part of the CARES act database is easily searchable and it shows that the owner took a $2mil - $5mil "grant" from the government. I don't blame the owner though. It's his money and his businesses (not just us) are likely going to lose money this year.

I was just gunna Ask that.

I understand that the SBA thing was satisfied by him months ago as you stayed busy otherwise, but for him to just pocket it and then lay you off later is just plain BS. This is the "Letter of the law v/s The spirit of the law" situation here! :angry:

If we don't get slow and need to lay off, I am planning on simply giving that $ out as bonus's.
I'm not puting $ that was intended to keep [other] employees flush during unsure times in my pocket!

... if the SBA and whoever else - ever decides what the end game is so that we can git on with it!
Our finish date was June 12 for Petey's sakes!

------------------------

Think Snow Eh!
Ox

Modelman · Aug 28, 2020

I thought the deal with the PPP money was that the recipients payroll had to at least remain level for a year for the loan to be forgiven otherwise it remained a loan and needed to be paid back. So far ours has but I'm not actually handling the paperwork and I'm not sure that the forgiveness criteria are all finalized yet. However the PPP funds could only be used during a limited period (although I understand it has been extended). What happens after that period if the business doesn't come back I don't know but it can't be good.
Dennis

SND · Aug 30, 2020

Lots of people would have been happy with only a 10% wage reduction.
Some industries haven't really felt the slowdown yet, but its coming.

Mike1974 · Aug 30, 2020

SND said:
Lots of people would have been happy with only a 10% wage reduction.
Some industries haven't really felt the slowdown yet, but its coming.

Not sure how you could/would say that..?? :confused:

Are they doing 10% less work? If they remain at same pay for less hours because there isn't the work, completely understand, but to say "hey your salary is cut 10% and you'll work the same" --- I'm out!

I know what is going to (most likely) happen, is, "uh we haven't recovered yet so I can't get you back to what you were making yet" and they will string that carrot out as long as they can. FUCK THAT! :angry:

Mike1974 · Aug 30, 2020

SND said:
Lots of people would have been happy with only a 10% wage reduction.
Some industries haven't really felt the slowdown yet, but its coming.

Also, I really don't think it is going to affect *everyone* anyways. Companies rolling out 5g services? Still going strong, maybe stronger because of lack of interpersonal connections, gotta face time and zoom ya know. We service that industry, we are busier and just purchased a new machine. I don't think someones gonna say "nah, lets roll back to 4g"

SND · Aug 30, 2020

Mike1974 said:
Not sure how you could/would say that..?? Are they doing 10% less work? If they remain at same pay for less hours because there isn't the work, completely understand, but to say "hey your salary is cut 10% and you'll work the same" --- I'm out!

I know what is going to (most likely) happen, is, "uh we haven't recovered yet so I can't get you back to what you were making yet" and they will string that carrot out as long as they can. FUCK THAT!

Some sectors like oil, took hourly/salary wage cuts, and work hours cuts as well.
If anyone isn't ok with that, they can join the 30-50% that got 100% cuts.

motion guru · Aug 30, 2020

PPP funds amount is equal to 2-1/2 months payroll expense and the criteria is that you must use the money to cover payroll and expenses for 2-1/2 months and no reduction in payroll during that time.

Mike1974 · Aug 31, 2020

SND said:
Some sectors like oil, took hourly/salary wage cuts, and work hours cuts as well.
If anyone isn't ok with that, they can join the 30-50% that got 100% cuts.

Yabutt the owner got some PP money and still cut pay and hours. That is plain BS! :icon_bs:

Besides, maybe just that one sector, but surely unemployment did not go to 30%-50%

Oldwrench · Aug 31, 2020

Everybody always talks about how the owner's an absentee millionaire and cheats everybody including the IRS...the PPP rules were and are pretty damn clear, 75% of the funds had to be used to retain headcount, and unless you wanted it to become a repayable loan you had to verify its use through payroll records. Some can afford to just let it go; you can never know what the owner's thinking is.

That said, making stuff for the gubmint can be like a license to coin money, right up until it isn't. If, banking on it to last indefinitely, you bought a house and a duallie and a trailerful of snowmobiles you weren't prepared for it to end. Familiar tune in the oil patch.

Mike1974 · Aug 31, 2020

motion guru said:
PPP funds amount is equal to 2-1/2 months payroll expense and the criteria is that you must use the money to cover payroll and expenses for 2-1/2 months and no reduction in payroll during that time.

Oldwrench said:
Everybody always talks about how the owner's an absentee millionaire and cheats everybody including the IRS...the PPP rules were and are pretty damn clear, 75% of the funds had to be used to retain headcount, and unless you wanted it to become a repayable loan you had to verify its use through payroll records. Some can afford to just let it go; you can never know what the owner's thinking is.

That said, making stuff for the gubmint can be like a license to coin money, right up until it isn't. If, banking on it to last indefinitely, you bought a house and a duallie and a trailerful of snowmobiles you weren't prepared for it to end. Familiar tune in the oil patch.

Now I am honestly curious, which one is it?

@oldwrench, I am not trying to make excuses for the people who lived/are living like their 10-5 hours of overtime are going to last the rest of their life.

Ox · Aug 31, 2020

Mike1974 said:
Now I am honestly curious, which one is it?

@oldwrench, I am not trying to make excuses for the people who lived/are living like their 10-5 hours of overtime are going to last the rest of their life.

Actually - it's been a moving target for a few months now.
They keep relaxing the requirements actually.
In stead of 8 weeks to use up 75% (?) - last I heard was up to 24 weeks and only needed to use sumpthing like 60% on payroll.
There was talk about not auditing anyone under $150K, and they could just keep it...
But it appears to all still be up for debate yet...

Just to be clear, there were many lake houses and new boats paid for with this grant this summer!

--------------------

Think Snow Eh!
Ox

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