Tuesday, July 31, 2007

Outsourcing

This is what concerns me about outsourcing and what one possible casualty that could result when such an ideal is hatched out of greed and not necessity. I can see such a move eventually result in closing small airport locations in cities with stagnated or dying economies and then selling these locations as franchises. Corporate wouldn't have the fleet expense, or airport counters and/or building lease expenses. Which anyone in management knows is outrageously high. These two things will kill a business plan quicker than 9/11 did in 2001. And no union shop which we all know is an ultimate check and balance monster when up against a company who's goal is to make money by any means necessary. Could you imagine Hertz employees without an union, no more guarantee 40 hrs, and part-timers without insurance. What type of staff will you create in 5 years? In a nutshell, the franchise owner would be responsible for all major expenses. Imagine the profit Hertz would occur not having to deal with fleet cost and building leasing in cities where "padded" business plans are hardly ever met. And Hertz still get a piece of the action from every franchise location who carries the Hertz name. I never thought I would never see the day that someone would be able to essentially committ RICO acts legally. If you are a corporate own location in a small market, a city where the economy is weak or dying and your location does between 800 to 1200 rentals a week , such a move could happen within the next two years. And remember the airline industry, which fuel airport rentals, will be the primary indicator, along with economy, which airports will be transform into franchises. Cities who airport airlines is struggling or cannot compete with the current price wars, will be the first to get hit. This is scary for every Hertz employee who works in a small city. A franchise owner has the option of cutting wages , layoff of veteran high paid station and area managers. And of course voiding union contracts. Hertz will be a wealthy company with a third world employee staff and customer service reputation. These owners will do to Hertz what Chicago and New York mob did to Vegas in the 40's and 50's. And it's all legal. Same mentality as the mob commission, except what they will do to Hertz employees is legal.

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