One of the key features of a runaway bubble economy is deferring capex and slashing company work forces aka human capital, then taking on low interest mispriced debt to buy back inflated stock. The payback is instant gratification as the Wall Street Casino bids up the stock price.
But now it seems the worm has turned. Taking the railroad industry as a prime example that is widespread throughout the economy, the empty suits in management have come to realize that properly trained employees don’t just grow on trees and appear by osmosis. The companies need to develop them. Whodathunk?
Additionally, the lizard brains in the anarcho-tyranny sistema have elected to stimulate “the economy” by borrowing more debt to pay plebs liberally not to work. Although this number is now in the process of falling off a cliff, 12.6 million people are still claiming some form of unemployment compensation. The question begs: After being out of the labor market for well over a year or longer, how many of these folks are even employable? And colleges? They pump out debt enslaved social justice warriors.
And while they’re at it, more fuel is thrown on the fire of the fentayl and meth drug epidemics, taking even more workers out of circulation. How much more evidence is needed to reach the conclusion that fifth-column subversives are piloting the nation.
- ‘Stunning Numbers’ — Record Number of Americans Died from Drug Overdoses During Pandemic, Driven by Fentanyl
- Fentanyl Seizures at Southern US Border Spike 4,000%
- Horseman of the Apocalypse: Fentanyl
- People Used The Pandemic As An Excuse To Do More Meth
James Foote, the chief executive of CSX, one of the largest railroads in the U.S., put it this way during this week’s earnings call (transcript by Seeking Alpha):
“I’ve never seen any kind of a thing like this in the transportation environment in my entire career where everything seems to be going sideways at the same time,” he said.
“In January when I got on this [earnings] call, I said we were hiring because we anticipated growth. I fully expected that by now we would have about 500 new T&E [train and engine] employees on the property,” he said. “No way did I or anybody else in the last six months realize how difficult it was going to be to try and get people to come to work these days.
“It’s an enormous challenge for us to go out and find people that want to be conductors on the railroad, just like it’s hard to find people that want to be baristas or anything else, it’s very, very difficult,” he said.
“Nor did we anticipate that a lot of the people were going to decide they didn’t want to work anymore. So attrition was much higher in the first half of the year than what we had expected,” he said. “So even though we brought on 200 new employees, we fell short of where we thought we would be by now.”
This circle jerk all comes after railroads had spent six years shedding employees in order to please Wall Street analysts and pump up stock prices. The resulting deterioration in service triggered numerous complaints from shippers.
According to the Surface Transportation Board (STB), an independent federal agency that oversees freight railroads, the Class 1 railroads slashed their headcount from 174,000 workers in April 2015 to 116,000 workers in June 2021.
Dishonest management and narrative-pushing apparatchiks want you to believe the scamdemic is the root of this. However, by February 2020, just before the pandemic, their headcount had already been cut by 46,000 workers, or by 26%, to 128,000. Only 12,000 workers were cut during the scamdemic. The biggest work force reduction of about 32,000 took place in 2018-2019 — well before the scamdemic.
The American Chemistry Council — which represents companies in the chemical industry, such as BASF, Chemours, Chevron Phillips Chemical, DuPont, ExxonMobil Chemical, etc. — complained in a letter to the STB, published in the Wall Street Journal, that railcars were waiting at railyards for over a week, and travel times for some routes more than doubled.
Union Pacific temporarily suspended traffic from Los Angeles into Chicago. Factories were running out of materials because shipments had gotten hung up and were approaching the point where they’d have to close or cut production.
After a half decade of egregious short-termer business practices, “the regulator” opines after the fences were left open and the dogs were tipping over every garbage can in the hood.
“The railroads cannot strip down to bare-bones operations,” STB chairman Martin Oberman told the Wall Street Journal. “It’d be like a professional football team only having one quarterback.”
Jeff Sloan, senior director of regulatory and technical affairs at the council, pointed to the real culprit.
“The deteriorating service shows that the railroads cut too deep before the pandemic and were unable to catch up.”
Hyperinflation- the recent little consolidation correction didn’t last long.