Swings in Hiring/Firing 7

[controlnovice]

About three years ago, I read in the industry papers that a few of the larger PetroChemical companies (Shell, Exxon, etc) were looking to hire in N.A. In particular, inviting engineers who had previously worked for them to interview.

Sure enough, 6 months later, I get an invite to interview.

In the '90s, they laid off so many people, that they now realized they had no-one with the 20-35 years experience.

Now, I just heard that they laid off 5000 and are looking for another 2000. (although I think that is worldwide, not just N.A.)

I know Engineering firms can go through big swings, depending on project load, but it seemed like the PetroChems learned their mistake in the '90s layoffs, but are doing it all over again.

Is this a typical process?

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[oldfieldguy]

You're assuming that they actually learn from their mistakes. I tend to believe that is an incorrect assumption.

old field guy

 

[controlnovice]

Ah...yes. Incorrect assumption.

I suppose the guys that were trying to re-hire knowledge, were themselves, let go. And the new bean counters are trying to make themselves look good by 'saving money'

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[MikeHalloran]

It appears to be a perpetual cycle, sort of like the cycles in predator/ prey ratio of isolated ecosystems.

When business school graduates reach upper management, they hire and retain more business school graduates, and discard engineers with every possible excuse.

Gradually, the company loses all of its institutional knowledge, typically stored in engineers' brains and lost with their departure, until the company is subsumed by competition from within or from without.

On the way down, occasional attempts at quick restoration appear and then fade, comprising recruitment of engineers and their knowledge from direct competitors. Unfortunately, due to the competitive nature of business school graduates, all competitors within an industry become similarly infected with business school graduates at about the same time, so all of the engineers with the experience they need are landscaping the estates or washing the cars of the business school graduates.

Eventually the engineers either get together and start up a new competitor that quickly dominates, or individually decide to stay in jobs that don't come home in their bellies.


I may have oversimplified it some...



Mike Halloran
Pembroke Pines, FL, USA

 

[cranky108]

There are other industries that do simular things, like not training junor engineers. And not so soon, they wonder why there is a shortage of experenced engineers.

Just to save money, and make a name as a cost savor.

 

[GregLocock]

The reason is of course that managers on an upward career path are able to demonstrate the cost saving resulting from retiring an experienced engineer now, and will be posted elsewhere before the long term negative side of that decision becomes apparent. I would guess that very few execs are held accountable for their screwups earlier in their careers, possibly on the basis that it is all a learning experience.

To be fair I certainly made some engineering screwups earlier in my career, and no-one else has really called me to account in any effective fashion.

Cheers

Greg Locock


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[moltenmetal]

Cyclic industries hire and fire cyclically.

Some people find a way to survive and even thrive in those industries. But most just take the lure of a big salary, assume it'll be forever, buy a house in the boomtown, live large for a few years, then get down-sized and lose money on the sale of their boomtown house.

Think the major oil companies are bad for this cyclic hiring/firing? Try the EPCs that serve them! The real employment fluctuations happen there, as that's where most of the engineering for these companies is done these days.

 

[HDS]

Same for defense depending on which party is in power or any publicly traded company depending on if the stock is up or down.

Your assumption is that the people that learned from the first situation are still there now.

 

[cranky108]

Just goes to show, there is no sure thing.

And the older guys know this game, and where the good places to stand are.

 

[RossABQ]

In my experience, ALL industries are cyclic; some just have longer frequencies and some have very high amplitudes. At a local level, it's even worse.

 

[RoyTyrell]

I wonder if BP regrets firing all of their engineers?

I hoped they saved lots of money outsourcing to Halliburton and Transocean.

I'll find work with the lawyers who are about to liquidate all of BP's north american assets. They'll need lots of expert witnesses.

 

[GregLocock]

Oh, like Exxon was liquidated after Valdez?

Cheers

Greg Locock


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[btrueblood]

Didn't BP buy up a big chunk of Exxon?

 

[moltenmetal]

Exxon bought Mobil AFTER the Exxon Valdez spill, and now plans to buy XTO for around $34 billion- what's that, one quarter's worth of Exxon profits in 2007?

Yeah this oil spill will cost BP serious money, but they make VERY serious money. Cost of doing business. They sell a finite product the world is addicted to. But the price ebbs and flows, as does their willingness to hire.

Yeah, all industries are cyclic to some degree because the economy itself is cyclic. Technology and globalization can make entire industries disappear from a particular locale in the blink of an eye. But some are boom-bust cyclic and the oil/gas industry is one of them in spades.

 

[RoyTyrell]

we'll see...

 

[weab]

Most industries are cyclic except for agriculture, medicine, and a few others, and even those to a small extent- less steak, more vegetables.

Oil's cycle has higher highs and lower lows. The companies are responsible to the stockholders so money talks. The jobs go along with the money. However, if you get in with an oil company, it can be a good ride while it lasts.

 

[RoyTyrell]

Greg and Molten....

you guys still confident of BP coming out of this alive????

 

[MechEng2005]

I heard one guy say (meaning don't bet your favorite nickel on it) that the actual cost to BP won't be much in terms of their annual profits. BP has insurance that will pay a lot of the costs.

I know I've heard the new conferences with BP promising each state so much for helping and trying to avoid a bad image as much as possible, and I'm sure that BP will need to cover the promises THEY make.

However, I wouldn't be surprised to find that BP is more concerned about the long-term image of the company more than the immediate cleanup costs (which may be mostly covered by insurance anyways). If that is the case, I haven't noticed any dust collecting around the BP stations around me, and I think BP will be fine.

-- MechEng2005

 

[KENAT]

Heard a report on the radio today that for Deep Drilling the companies have to be 'self insured' as most insurance firms wont cover them.

So it sounds like the cost will directly against BP barring the inevitable accounting tricks.

However, the same report said that the high end estimate of costs related to the leak are only slightly more than recent annual profits of BP.

So unless none of the efforts they have planned work, or a Hurricane of something intervenes and makes it worse, then I'd expect they'll come through it more or less OK.

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[RoyTyrell]

wow...

we really need to find a way where we can all put money on this.... daddy needs a new boat...