Link:
http://money.cnn.com/2009/04/03/news/economy/jobs_march/index.htm?postversion=2009040318
Summary:
Recession or depression? As we look at the U.S and the world's economy, what are we currently in? Unemployment is now at a 25 year high, employers have trimmed 663,000 jobs from their payrolls last month, 5.1 million jobs have been lost since the start of 2008, and the economy shows little signs of improvement. Of the 663,000 jobs lost last month, many of the layoffs have yet been implemented, which means even more jobs are lost than it is said to be. The unemployment rate has climbed from 8.1% to 8.5% in February. Ever since 2008, when the recession began, more than half of the jobs lost have been in the past five months. The manufacturing industry has lost 161,000 jobs, the construction industry has lost 126,000 jobs, and the professional & business services industry has lost 133,000 jobs in March alone. The only areas of increase have been in education and health care, and they have only added a modest 8000 jobs in the month. In conclusion, the typical length of time people are out of work now stands at an average of 20 weeks, and the average hourly work week has now dropped to 33 hours, which means we have a lot of work to do before we are out of this recession.
Connections:
Many connections were made between the article and accounting in general. To start things off, the main goal of all companies are to get the maximum amount of profit. All the industries and companies laid off their employees because they had to. They were not making enough profit to sustain their company and still prosper. If the companies did not cut down on their expenses (ie. wages) they would go bankrupt eventually. Linking the lay off of employees to the accounting I've learned in the textbook, the process is not that simple. It includes procedures regarding the 'registered retirement savings plan', of which some people might consider as a backup plan if they start running low on money because they do not have a job, the Canada pension plan, and unemployment insurance, for when they are unemployed. The next connection I made was about wages - payments to workers for their work, on an hourly basis. The average hourly work week is now 33 hours and that is not a good sign for the economy. That means the gross pay for employees drop because the average or normal was about 40 hours a week before. Another connection I made that doesn't directly relate to the article but still can, is regarding the issue of interest and loan rates. If the banks just reduced their rates, companies would be able to pay off their debts and loans, therefore making the company more successful. In doing this, companies would have a higher current ratio and a higher quick ratio (a lot more assets than liabilities), and this would mean companies would not have to lay off as many employees. During this recession, there are many steps to be taken before we can finally get ourselves out of it (which lies in the hands of Obama really...), and just like accounting, we must follow those steps and procedures to get the job done!
Reflection:
University and college graduates. The article has a side link regarding those graduates, and how it will affect them more than the people currently working. How are they going to get a steady job that will support themselves, let alone maybe their own families? Some say that the recession or depression will end by 2013, but there are books that predict that we will have another recession starting in 2013 because of the retiring work force. As of the current problem we have now, I believe that we should freeze the work hours and wages, and hope to ride out the recession. I would love to say, "The government should help out by stimulating the economy", but it would be unrealistic as they themselves are in debt as well. It seems as though there are no solutions to the problem that we have gotten, or the U.S has gotten us into. Of all countries, Canada is not as affected because of their banking system, which is great, but the news of the recession just shows us how bad the economy really is. So I would like to ask the potential readers of this blog, what do you think it will take for us to get out of this problem we have? And how soon do you think we can resolve this problem?
Sunday, April 5, 2009
Monday, March 23, 2009
Accounting 12 - Chapter 16
Link: http://www.cbc.ca/money/story/2009/03/22/chrysler-union.html
Summary:
The economy is now in recession and companies and workers are suffering. Here is another case. As you might have heard, Chrysler's minivan assembly plant in Windsor, Ontario, has laid off many employees and has plans to close down the plant as well. Closing down the plant would include the layoff of more than 5000 workers! This is why Chrysler and the Canadian Auto Workers (CAW) will begin talk aiming at reaching an agreement on worker concessions in advance of a looming deadline for the troubled automaker to receive billions in emergency loans from the Canadian and U.S government. The two sides both have different ideas on what the plan should be in order to get them out of the trouble they are in. The CAW believe that the union should stick to pattern bargaining, meaning it will ask Chrysler to accept a deal similar to the one that General Motors accepted upon earlier in this month. Chrysler described the plan as "unacceptable" to Chrysler, and threatened a complete pullout from Canada if the company did not get what it needs from workers and the government. The CAW hope an agreement can be made by the end of the week.
Connection:
Wages and Unemployment Insurance Deductions were the connections i made between the article and chapter 16. The CAW believes that Chrysler should stick with pattern bargaining, which includes the freezing of wages until 2012 and adjustments made to both wages and pensions for workers. Under the agreement, CAW members would also contribute $30 a month to their health benefits. Decreasing wages to employees would not only decrease the gross amount of money employees are making, but would also help Chrysler increase their profit because of less wage expenses. So what happens to the thousands of employees if Chrysler's minivan assembly plant closes down? More than half will not be able to have a source of income for at least a month. So what should they do? They should just continue looking for a job because they still have "unemployment insurance". The unemployment insurance fund was created from deductions made from previous portions of their cheques for if they were to ever become unemployed. When the become unemployed while willing and able to accept employment, the worker is entitled to receive payments out of the fund.
Reflection:
I think Chrysler should just stick with the Canadian Auto Worker's ideas of following the plan of pattern bargaining, like the one that General Motors accepted earlier in this month. It seems like a great idea that will benefit the thousands of workers, Chrysler customers, and the corporation of Chrysler itself. If Chrysler so happens to not come to an agreement and decides to pull out from Canada, i see a deepened recession that will be eventually lead towards a depression that will be even harder for the world's economy to get out of. So, cross your fingers, and if you have not started saving money, i suggest that you start now. When will our economy recover?
Summary:
The economy is now in recession and companies and workers are suffering. Here is another case. As you might have heard, Chrysler's minivan assembly plant in Windsor, Ontario, has laid off many employees and has plans to close down the plant as well. Closing down the plant would include the layoff of more than 5000 workers! This is why Chrysler and the Canadian Auto Workers (CAW) will begin talk aiming at reaching an agreement on worker concessions in advance of a looming deadline for the troubled automaker to receive billions in emergency loans from the Canadian and U.S government. The two sides both have different ideas on what the plan should be in order to get them out of the trouble they are in. The CAW believe that the union should stick to pattern bargaining, meaning it will ask Chrysler to accept a deal similar to the one that General Motors accepted upon earlier in this month. Chrysler described the plan as "unacceptable" to Chrysler, and threatened a complete pullout from Canada if the company did not get what it needs from workers and the government. The CAW hope an agreement can be made by the end of the week.
Connection:
Wages and Unemployment Insurance Deductions were the connections i made between the article and chapter 16. The CAW believes that Chrysler should stick with pattern bargaining, which includes the freezing of wages until 2012 and adjustments made to both wages and pensions for workers. Under the agreement, CAW members would also contribute $30 a month to their health benefits. Decreasing wages to employees would not only decrease the gross amount of money employees are making, but would also help Chrysler increase their profit because of less wage expenses. So what happens to the thousands of employees if Chrysler's minivan assembly plant closes down? More than half will not be able to have a source of income for at least a month. So what should they do? They should just continue looking for a job because they still have "unemployment insurance". The unemployment insurance fund was created from deductions made from previous portions of their cheques for if they were to ever become unemployed. When the become unemployed while willing and able to accept employment, the worker is entitled to receive payments out of the fund.
Reflection:
I think Chrysler should just stick with the Canadian Auto Worker's ideas of following the plan of pattern bargaining, like the one that General Motors accepted earlier in this month. It seems like a great idea that will benefit the thousands of workers, Chrysler customers, and the corporation of Chrysler itself. If Chrysler so happens to not come to an agreement and decides to pull out from Canada, i see a deepened recession that will be eventually lead towards a depression that will be even harder for the world's economy to get out of. So, cross your fingers, and if you have not started saving money, i suggest that you start now. When will our economy recover?
Tuesday, March 3, 2009
Accounting 12 - Chapter 15
Link :
http://money.cnn.com/2009/03/03/news/companies/chrysler_viper.reut/index.htm?postversion=2009030317
Summary:
The Dodge Viper. It is a V10-powered sports car manufactured by the Dodge division of Chrysler LLC. Chrysler LLC is recently in discussions with two to three companies for the possible sale of the Dodge Viper sports car line, but the economic recession has slowed the process. But why sell this unique car to another company? The answer is simple, “Chrysler is exploring the sale of the Viper business in efforts to generate cash and ride out the deepening U.S. auto industry downturn.” Chrysler has had a 169% increase of sales of the Viper from the previous years, but recently, they have been struggling along with other automakers through the downturn in U.S. auto sales. Chrysler tries to seem calm by saying that they “are not in a big hurry to [sell the] Viper.” U.S. auto sales have declined 44% in February.
Connections:
1) Auto sales are declining and will continue to decline.
2) Gas prices are rising, and the demand for V10-powered, fuel-eating sports cars are declining.
As for now, if Chrysler sells their Viper, they will benefit for the next couple of years. But if the economy turns around in a couple of years, the company that purchased the Viper, assuming they do not go bankrupt, will benefit.
http://money.cnn.com/2009/03/03/news/companies/chrysler_viper.reut/index.htm?postversion=2009030317
Summary:
The Dodge Viper. It is a V10-powered sports car manufactured by the Dodge division of Chrysler LLC. Chrysler LLC is recently in discussions with two to three companies for the possible sale of the Dodge Viper sports car line, but the economic recession has slowed the process. But why sell this unique car to another company? The answer is simple, “Chrysler is exploring the sale of the Viper business in efforts to generate cash and ride out the deepening U.S. auto industry downturn.” Chrysler has had a 169% increase of sales of the Viper from the previous years, but recently, they have been struggling along with other automakers through the downturn in U.S. auto sales. Chrysler tries to seem calm by saying that they “are not in a big hurry to [sell the] Viper.” U.S. auto sales have declined 44% in February.
Connections:
The insiders and the outsiders of a company, and trend analyses were the connections I made between the article and chapter 15. The insiders, Chrysler, had to study their financial statements thoroughly and look at how the economy was doing in order to make key decisions about their company. In this article's case, Chrysler came to the decision that they wanted and probably needed to sell the Viper in order to survive the U.S. automobile industry downturn. The two to three companies interested in buying the Viper, the outsiders, had to analyze Chrysler's financial statements, and look at how the sales industry was doing in order to see if the Viper was worth purchasing or not. The outsiders are always looking for something that will grow in the future and something that will become very profitable. The last connection I made was the use of trend analyses. Chrysler uses presents their financial data as very well (ie. 169% sales increase from previous years), but it does not also show that U.S. auto sales have also declined 44% in February alone.
Reflection:
SELL SELL SELL! If Chrysler sells their Viper to another company, they will most likely ride out the deepening U.S. auto industry downturn. In general terms, Chrysler will actually benefit from the sale of their Viper for now. As for the company that purchases the Viper, I believe they will be in even harder times as the sales of automobiles have declined 44% in February alone. I think Chrysler is selling the Viper only because of the following reasons:1) Auto sales are declining and will continue to decline.
2) Gas prices are rising, and the demand for V10-powered, fuel-eating sports cars are declining.
As for now, if Chrysler sells their Viper, they will benefit for the next couple of years. But if the economy turns around in a couple of years, the company that purchased the Viper, assuming they do not go bankrupt, will benefit.
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