Kraft Foods will eliminate 1,600 jobs within the next 12 months, about 40 percent in its North American sales operations. It also will close its Glenview management center by the end of 2013 as part of its preparations to split into two companies, the Northfield-based company announced Tuesday.

A Kraft spokesman said the restructuring will result in the Chicago area gaining jobs, however, because the Glenview management employees will stay in the Chicago area and a few dozen jobs will be added at a Glenview research and development center.

The 970 Glenview center employees, as well as 261 relocated jobs — 225 management and marketing employees from the Kraft beverages business unit in Tarrytown, N.Y., and 36 from the Planters brand plant in East Hanover, N.J. — will move to Kraft’s new grocery headquarters, which will be located in the Chicago area.

Indeed, both Kraft’s snacks and grocery businesses will keep their headquarters in the Chicago area, though no exact locations have been named. A decision on the two headquarters sites will be made by March 30, Kraft spokesman Michael Mitchell said.

Mitchell could not give details on the numbers to be employed at both headquarters.

The Glenview management center, located on 47 acres at the northwest corner of the Golf Road and Waukegan Road intersection, generates $1.9 million yearly in property taxes for the village.

“This was not a surprise, since Kraft officials have been communicating with us. We understand that businesses in these times are cutting costs,” said Don Owen, deputy village manager of Glenview, about 20 miles north of Chicago.

Owen said that the Kraft site is an excellent location and the village expects Kraft Foods to help sell or lease the property.

“Kraft officials have indicated they’d like the process to go as quickly and smoothly as possible,” Owen said.

Kraft also operates a research and development center less than a mile north of the management center, near the intersection of Dewes Street and Waukegan Road in Glenview, which will expand by adding test kitchens and about 24 jobs relocated from dessert research and development operations in Tarrytown. The research and development center now employs 470 and generates $780,000 in yearly property tax revenue.

Kraft employs 7,750 in Illinois, including 5,129 in the Chicago area, 1,349 in Northfield and 1,378 in Glenview, a Kraft spokesman said. The company employs 46,500 in North America and 127,000 worldwide.

Kraft announced in August it will split into two publicly traded companies — global snacks and North American grocery — in a move aimed at wringing as much value as possible from its stock. The split will create a $16 billion North American grocery business with brands such as Velveeta cheese, Cheez Whiz, Jell-O and Oscar Mayer meats, and a $32 billion global snacks company comprising names such as Oreo, Tang powdered drink and Trident chewing gum.

The 1.600 North American sales cuts are to be finished by April 1, and Kraft is still reviewing its manufacturing operations, the company said.

An Oscar Mayer management center will remain in Madison, Wis.

Kraft generated $49.2 billion in revenue last year, of which a majority came from outside of North America. Kraft announced Tuesday its fiscal 2011 revenues are expected to jump 10 percent from the prior year to stand at about $54.13 billion.

“When we announced our decision to create two world-class companies last August, we said both would be leaner, more competitive organizations,” said CEO Irene Rosenfeld, who will become CEO of the global snacks business. Rosenfeld created a stir in October when she joked to an Executives’ Club of Chicago luncheon that Kraft was talking with Mayor Rahm Emanuel’s office about joining a growing list of companies announcing opening offices in downtown Chicago rather than in the suburbs. The mayor’s office said no such talks had occurred.

Published: January 25, 2012

A JOB TURNS DEADLY Aluminum dust from polishing iPads caused the blast at Foxconn’s plant in Chengdu, left. Lai Xiaodong was among those killed. He had moved to Chengdu, bringing with him his college diploma, six months earlier.

When workers in the cafeteria ran outside, they saw black smoke pouring from shattered windows. It came from the area where employees polished thousands of iPad cases a day.

Two people were killed immediately, and over a dozen others hurt. As the injured were rushed into ambulances, one in particular stood out. His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.

“Are you Lai Xiaodong’s father?” a caller asked when the phone rang at Mr. Lai’s childhood home. Six months earlier, the 22-year-old had moved to Chengdu, in southwest China, to become one of the millions of human cogs powering the largest, fastest and most sophisticated manufacturing system on earth. That system has made it possible for Apple and hundreds of other companies to build devices almost as quickly as they can be dreamed up.

“He’s in trouble,” the caller told Mr. Lai’s father. “Get to the hospital as soon as possible.”

In the last decade, Apple has become one of the mightiest, richest and most successful companies in the world, in part by mastering global manufacturing. Apple and its high-technology peers — as well as dozens of other American industries — have achieved a pace of innovation nearly unmatched in modern history.

However, the workers assembling iPhones, iPads and other devices often labor in harsh conditions, according to employees inside those plants, worker advocates and documents published by companies themselves. Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.

Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors.

More troubling, the groups say, is some suppliers’ disregard for workers’ health. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions inside the Chengdu plant, according to a Chinese group that published that warning.

“If Apple was warned, and didn’t act, that’s reprehensible,” said Nicholas Ashford, a former chairman of the National Advisory Committee on Occupational Safety and Health, a group that advises the United States Labor Department. “But what’s morally repugnant in one country is accepted business practices in another, and companies take advantage of that.”

Apple is not the only electronics company doing business within a troubling supply system. Bleak working conditions have been documented at factories manufacturing products for Dell, Hewlett-Packard, I.B.M., Lenovo, Motorola, Nokia, Sony, Toshiba and others.

Current and former Apple executives, moreover, say the company has made significant strides in improving factories in recent years. Apple has a supplier code of conduct that details standards on labor issues, safety protections and other topics. The company has mounted a vigorous auditing campaign, and when abuses are discovered, Apple says, corrections are demanded.

And Apple’s annual supplier responsibility reports, in many cases, are the first to report abuses. This month, for the first time, the company released a list identifying many of its suppliers.

But significant problems remain. More than half of the suppliers audited by Apple have violated at least one aspect of the code of conduct every year since 2007, according to Apple’s reports, and in some instances have violated the law. While many violations involve working conditions, rather than safety hazards, troubling patterns persist.

“Apple never cared about anything other than increasing product quality and decreasing production cost,” said Li Mingqi, who until April worked in management at Foxconn Technology, one of Apple’s most important manufacturing partners. Mr. Li, who is suing Foxconn over his dismissal, helped manage the Chengdu factory where the explosion occurred.

“Workers’ welfare has nothing to do with their interests,” he said.

Some former Apple executives say there is an unresolved tension within the company: executives want to improve conditions within factories, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. Tuesday, Apple reported one of the most lucrative quarters of any corporation in history, with $13.06 billion in profits on $46.3 billion in sales. Its sales would have been even higher, executives said, if overseas factories had been able to produce more.

Executives at other corporations report similar internal pressures. This system may not be pretty, they argue, but a radical overhaul would slow innovation. Customers want amazing new electronics delivered every year.

“We’ve known about labor abuses in some factories for four years, and they’re still going on,” said one former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements. “Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”

“If half of iPhones were malfunctioning, do you think Apple would let it go on for four years?” the executive asked.

Apple, in its published reports, has said it requires every discovered labor violation to be remedied, and suppliers that refuse are terminated. Privately, however, some former executives concede that finding new suppliers is time-consuming and costly. Foxconn is one of the few manufacturers in the world with the scale to build sufficient numbers of iPhones and iPads. So Apple is “not going to leave Foxconn and they’re not going to leave China,” said Heather White, a research fellow at Harvard and a former member of the Monitoring International Labor Standards committee at the National Academy of Sciences. “There’s a lot of rationalization.”

Apple was provided with extensive summaries of this article, but the company declined to comment. The reporting is based on interviews with more than three dozen current or former employees and contractors, including a half-dozen current or former executives with firsthand knowledge of Apple’s supplier responsibility group, as well as others within the technology industry.

In 2010, Steven P. Jobs discussed the company’s relationships with suppliers at an industry conference.

“I actually think Apple does one of the best jobs of any companies in our industry, and maybe in any industry, of understanding the working conditions in our supply chain,” said Mr. Jobs, who was Apple’s chief executive at the time and who died last October.

“I mean, you go to this place, and, it’s a factory, but, my gosh, I mean, they’ve got restaurants and movie theaters and hospitals and swimming pools, and I mean, for a factory, it’s a pretty nice factory.”

Others, including workers inside such plants, acknowledge the cafeterias and medical facilities, but insist conditions are punishing.

“We’re trying really hard to make things better,” said one former Apple executive. “But most people would still be really disturbed if they saw where their iPhone comes from.”

Link to entire article.

From the Q&A at LinkedIn headquarters

On the first stop on his publicity tour — at the headquarters of LinkedIn — Adam Lashinsky met a former Apple (AAPL) employee who had read Lashinky’s book and was in a position to comment on how accurately it portrays life Inside Apple.

We’ve posted the meat of their exchange in theYouTube clip below.  Lashinsky’s interrogator — who worked six years at Apple — had us until he suggested that CEO Tim Cook possessed “so much charisma he could certainly be our next President.” Of the U.S.? Hmm.

If you have time, we recommend the full 50-minute interview and Q&A, conducted by LinkedIn executive editor Dan Roth. It’s posted here. Better still, read the book.

You might want to turn up your volume before you play the clip:

In the reorganization, Christian Meissner will become head of global corporate investment banking, while two former co-heads of the unit will take on new roles, according to a memo sent to employees on Sunday by co-chief operating officer Tom Montag that was obtained by Reuters.

Meissner will report to Montag, the former Merrill Lynch andGoldman Sachs Group Inc executive who runs global banking and markets operations for Bank of America.

Paul Donofrio will become head of global corporate banking credit and transaction banking with responsibility for global treasury services, loan products and other services. Michael Rubinoff will become chairman of GCIB, where he will be charged with deepening client relationships.

Both executives will also report to Montag.

The new structure comes as the corporate and investment bank adapts “to a changing market environment to more effectively meet the needs of our clients,” Montag said in the memo.

Montag joined Bank of America in 2009 when the Charlotte, North Carolina-based bank bought Merrill as it verged on collapse in the financial crisis.

Bank of America spokesman John Yiannacopoulos confirmed the contents of the memo, but declined to comment further.

The reshuffling puts a relative newcomer to Bank of America in charge of capital markets operations that underwrite stock and debt offerings as well as bankers who advise corporations on mergers and other transactions. The bank hired Meissner in April

from Nomura Holdings Inc , the Japanese bank, to head up investment banking for Europe, the Middle East and Africa.

Currently based in London, the former Lehman Brothers veteran will move to New York, Montag said in the memo. Donofrio and Rubinoff are also based in New York.

The moves come after a challenging year for Montag’s business, which saw net income fall by more than half to about $3 billion in 2011 from last year as clients pulled back amid uncertainty over the European debt crisis. The unit has been slashing staff amid a decline in revenue and last week investment bankers learned that part of their bonuses would be paid in stock in lieu of cash.

More cuts are also expected in the unit as part of the second phase of an efficiency initiative called Project New BAC. The first phase is set to eliminate 30,000 jobs over the next few years in a bid to trim $5 billion in annual expenses.

Executives are expected to complete planning for the second phase in April. That part of New BAC could eliminate up to $3 billion in expenses. It is expected to eliminate fewer jobs.

Link to article

“It is part of the FactoryMade DNA to understand that entertainment combined with modern technology has the power to ignite and bolster customer engagement,” said John Fogelman, chief executive officer of FactoryMade, who has worked with J.J. Abrams, Michael Bay, Kevin Spacey and others. “As J.C. Penney begins to reimagine their future, our creative engineers will help mine opportunities that will revolutionize their storied brand.”

Fogelman said Hollywood can help retailers better connect to their customers emotionally.

“If you step back and think about what Hollywood is actually, what it is great at it is it’s great at emoting,” he said. “Great storytellers can drive great emotion.”

And right now Fogelman said there is almost a “sadness” in malls.

“It doesn’t feel like it’s an event to go to a store today and if they’re really going to compete with the…convenience of shopping online, [shoppers] are going to have to feel that this is an event.”

Fogelman said he has a couple of ideas for Penney’s, but that nothing is set. Anything could be in the offing with Johnson overhauling Penney’s pricing and reshuffling the store, replacing the center core of the store into a service-oriented area called Town Square.

“J.C. Penney is partnering with the best, most innovative marketing and branding firms in the country,” said Michael Francis, the former Target Corp. executive who is now president of J.C. Penney Co. Inc. “Working alongside our talented in-house creative team, FactoryMade and our other key agency partners will be leading the charge in engaging customers and transforming J.C. Penney into America’s favorite store.”

Established in September, FactoryMade was previously part of talent agency William Morris Endeavor and was called Skunkworks.

Put simply, employees — who became collateral damage during the recession as companies downsized — are now emerging as brands’ best assets.

While employees have always been the front line of customer interactions for brands, particularly those in the service industry, a number of factors of late have brought them more to the fore, including a more transparent and socially engaged society, a still-fragile economy where everyday value trumps aspirational brand attributes, and an ongoing lack of trust in corporate America and CEO spokespeople.

“It’s moved from treating employees as a liability when it comes to communicating to now treating them more as an asset of engaged people who live and breathe your brand,” said Rohit Bhargava, author of “Personality Not Included” and senior VP-strategy and planning at Ogilvy. “Employees need to be a part of the marketing supply chain,” said Jim Speros, CMO of Fidelity Personal, Workspace and Institutional Services. “Many companies forget that their employees are their ultimate brand ambassadors.”

Overstock hasn’t. Its new TV spot features those ambassadors as stars, some 30 of them singing while they work at jobs from customer service to warehouse shipping as they get ready for the holiday season.

“It’s the world of social that we live in. Consumers want to deal with a real company,” said Stormy Simon, Overstock senior VP-marketing and customer care, who herself has appeared in previous ads. “We’re showing our employees as the face of our company in this age where in the last few years, people have lost some trust [in corporate America]. These are people you can relate to … our real employees, and we’re letting them do their thing. You no longer need to hear it from the CEO.”

In fact, you may not want to hear it from the CEO. “If we went out and had the president of Pizza Hut say how ‘We really care about you and the food we’re making for you,’ I just don’t think it rings quite as true,” said Kurt Kane, VP-marketing at Pizza Hut, which recently introduced a campaign themed “Your Favorites. Your Pizza Hut” that features eight actual restaurant employees. “Right now, with consumers’ financial challenges, if they’re spending money they want something they know they will get value out of. We’re showing them that what they’re spending their money on, someone really cared about making.” The Pizza Hut ads also serve an internal purpose, generating buzz inside the company and among franchisees. At a recent franchisee conference, Mr. Kane introduced the eight “stars” of the ads to a standing ovation. Morale is up as well, he said, and the ads help set the recruiting and customer-service bar for potential Pizza Hut employees.

Take, for example, Kraft, which has begun using an app dubbed “Foodii” (pronounced “foodie”), an internal online community of about 2,000 employees it uses to gather information before doing formal market research. The goal is not only to get to market faster and improve a product’s chance of success, but also to get employees engaged and give them an insider look at initiatives and products, a Kraft spokeswoman said.

Foodii was used recently to help choose a name for a new Jell-O Mousse Temptations flavor. Within 24 hours, Kraft got more than 100 ideas from employees, and the best were sent to external market research. The winner, “Chocolate Mint Sensation,” was suggested by an employee.

Kraft also used Foodii to test the preparation method, to find out if it should recommend one pot or two in advance of the introduction of its Homestyle Macaroni and Cheese Dinner. The spokeswoman said Kraft is looking to expand Foodii to get further diversity of employee opinions.

“Employees are the actual heart of the brand,” said Mr. Bhargava. “Yes, the products are important, but especially for service-based businesses, it’s all about the people. This is letting people connect with the people behind the brand, not just what you put in your mission statement.”

In other words, the employees have to understand and deliver what the brand is all about. “It’s one thing to make a promise in an advertisement, but if you haven’t let your employees know what that promise is, it’s going to backfire,” said Jennifer Schade, president of marketing consultancy JRS Consulting.”Employees want to feel like insiders, they want to know the scoop,” said Mary Gilly, marketing professor at the Paul Merage School of Business, University of California, Irvine.

To get that scoop, several weeks before the launch of Fidelity’s “Turn Here” campaign, the campaign was rolled out inside the company. An internal website explained the creative, detailed the positioning, offered FAQs and explained employees’ role in the message and ongoing process. More than 28,000 employees spent an average of eight minutes exploring the site, Mr. Speros said.

The plan was to make sure employees understand why “Turn here” is a solid strategy and serve up visible examples of it in emails, video posts and public forums. Fidelty hosted a breakfast club with 300 to 400 employees to talk about the campaign as part of the effort and worked with employee training to sync ad messaging with what was being taught on the front lines.

And it’s important to continue the effort beyond the ad campaign. Fidelity’s Mr. Speros advises creating and maintaining an internal marketing effort vs. “rocket flare” internal marketing or one-time only blasts to employees right before campaign launches.

“Build an internal communications campaign that is continual, so you’re always getting feedback and staying connected,” he said. The result will be “more highly engaged employees, better morale and pride, and ultimately better business results.”

UAW Local 31 President George Ruiz said 90 percent of members who voted were in favor of authorizing a strike while 10 percent were opposed in voting that took place Thursday.

A strike authorization vote is often taken to give the union more leverage in its negotiations with an automaker.

Last week the 3,400 hourly workers at GM’s FairfaxAssembly Plant, which produces the Chevrolet Malibu and the Buick LaCrosse, rejected a proposed local contract.

Ruiz said contract talks between the UAW and GM to revise that proposal are scheduled to resume Monday.

Workers at the Fairfax plant are concerned about proposed changes to seniority rights.

A summary of the proposed agreement that workers rejected says the UAW began contract talks at the plant with a set of 250 demands submitted by the members.

“Along with the UAW demands, management presented over 50 initiatives that launched attacks on our seniority rights, transfer provisions, wages and numerous hard-fought issues that we had successfully negotiated over the years,” John Melton, chairman of UAW Local 31, says in a letter to members included in the proposed contract.

The Fairfax plant is a crucial plant for GM, especially this year.

The first 2013 Chevrolet Malibu Eco, with the company’s fuel-saving start-stop technology, was shipped from the plant last Thursday. The 2013 Malibu is one of GM’s most important new cars this year.

The Malibu was GM’s second-best selling car in 2011, and LaCrosse was the top-selling vehicle for the Buick brand. The Malibu also is produced at GM’s Detroit-Hamtramck assembly plant.

http://www.chicagotribune.com/business/breaking/chi-uaw-at-kansas-plant-authorizes-strike-against-gm-20120127,0,4997311.story

For example, while 83 per cent of survey respondents reported overall satisfaction with their current jobs, only 68 per cent felt passion and excitement about their work, and only 52 per cent felt completely plugged in at work.

Those focused on driving organizational performance may be tempted to throw up their hands and ask how this can be the case.

But the survey results offer valuable insights that can help organizations identify gaps in their employment proposition. The results show that, overall, employees are fairly satisfied with key attributes of their jobs, including:

• Relationships with co-workers (76 per cent).
• The work itself (76 per cent).
• Opportunities to use skills and abilities (74 per cent).
• Relationship with immediate supervisor (73 per cent).

But other aspects of the work experience were seen as falling short, and had considerably fewer respondents reporting satisfaction. These included:

• Career advancement opportunities (42 per cent).
• Career development opportunities (48 per cent).
• Communication between employees and senior management (54 per cent).
• Job-specific training (55 per cent).
• Management recognition of employee job performance (57 per cent).

SHRM cautions, however, that the areas of discontent could pose a challenge for employers, especially as the economy improves. “As we come out of the recession, the war for talent will be back on. When that happens, there is the potential for turnover, given the dissatisfaction that employees seem to have with the real or perceived lack of advancement opportunities.”

In essence, the survey results suggest many employees are comfortable, but not inspired. They are content with their jobs and immediate work environments, but don’t feel especially connected to their organizations and corporate objectives.

To achieve high levels of organizational performance, however, you need employees who think and act like owners, who are proactive, and who consistently deliver their very best.

But to inspire such commitment, organizations need to deliver more than a steady pay cheque. High levels of engagement require clear objectives, open communication, visible leadership and effective rewards and recognition. Employees are also more willing to support company growth when they themselves have opportunities to grow and develop.

Original article

The CEO of one of the country’s largest investment banks has some choice words for any employees upset about the prospect of a smaller paycheck this year.

James Gorman, the head of Morgan Stanley, said that if his workers are so angry about their latest, trimmed-down paycheck, it’s probably time for them to go. Gorman stands in contrast with many of his executive counterparts, who have largely stayed silent on the issue of declining compensation, despite an industry-wide restructuring.

“I say [to disgruntled Morgan Stanley employees], listen, you’re naive, read the newspaper, number one,” Gorman said in an interview with Bloomberg Television. “Number two, if you put your compensation in a one year context to define your overall level of happiness, you’ve got a problem that is bigger than the job. And number three, if you’re really unhappy, just leave. Life’s too short.”

Morgan Stanley announced earlier this month that it would cap cash bonuses for 2011 at $125,000 and that its executives — including Gorman — wouldn’t be getting any cash bonuses, according to The New York Times.

Gorman and his employees at Morgan Stanley aren’t the only ones on Wall Street contending with smaller paychecks. Anxiety over the state of the global economy, slow dealmaking and a boost in public anger over the financial industry’s high pay have likely pushed firms to slash their compensation pools to the lowest level since the 2008 financial crisis, the Wall Street Journal reports.

And that’s for those that’ve kept their jobs. All told, Wall Street laid off more than 200,000 employees in 2011 alone.

“The world has changed and the banking industry has gone through a fundamental change and we have to readjust,” Gorman said in the interview.

Many workers have had trouble coming to terms with the new reality. Bonus day at Goldman Sachs last week was a “bloodbath,” one mid-level employee told CNBC, as some workers learned they would be taking home smaller bonuses this year — and some none at all. In addition, the firm cut the pay of some if its senior workers in half.

Investment bankers at Bank of America also found out earlier this week that their compensation would be slashed by 25 percent. That’s part of a larger push to cut total costs at America’s second-largest bank by as much as $8 billion per year.

It seems that City Hall was rather justified in its decision, which could ultimately  save a significant amount of money in terms of medical costs and compensation of its employees. However, I’m curious as to how they went about addressing this plan that would make someone so distraught.

Original Article: Room to Change

Apparently at least one Fort Worth city employee was upset enough about a plan to spend $50,000 to install five showers at City Hall for workers who bike to the office or exercise during lunch that he or she tipped off the Star-Telegram’s Watchdog.

The tip wasn’t necessary; two local TV stations covered the story after the item appeared on a City Council agenda for approval.

The shower and locker rooms will provide two stalls for women, two for men and one that is accessible by people with disabilities. The money will come from the deferred replacement of an air-conditioning system at the Animal Care and Control Center that was scheduled for this year.

The shower project sounds reasonable and wise considering the city is self-insured and is promoting programs and activities to improve workforce wellness.

With a city staff the size of Fort Worth’s (6,200 full-time workers), if just 5 percent of inactive employees begin exercising it could produce savings of $500,000 a year in increased productivity and reduction of workers’ compensation and medical costs, according to a study by the Wellness Council of America and the National Coalition for Promoting Physical Activity.

Opponents of the expenditure, which turned out to be less than $40,000 according to the city facilities manager, argue that the showers will rarely be used since most employees live outside city limits and don’t bike to work.

Actually, more than 60 percent of the general employees live within city boundaries; about 2,500 work in or near City Hall.

It’s the majority of civil service police and fire employees who live beyond the city limits. And guess what? They already have access to city-provided locker rooms with showers.

In recent months, the city has created more than 10 miles of bicycle lanes as part of its Bike Fort Worth plan to help change the commuting culture. It makes sense to provide employee conveniences that might encourage others to use bicycles as a safe alternative to the automobile to get to work.

To bring about this change, bike commuters need a place to change.